Beijing Energy International : MAJOR TRANSACTION IN RELATION TO THE ACQUISITION OF THE ENTIRE EQUITY INTEREST IN A COMPANY IN THE PRC; RE-ELECTION OF RETIRING DIRECTOR AND NOTICE OF SPECIAL GENERAL MEETING

March 11, 2021 at 05:14 am

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action you should take, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Beijing Energy International Holding Co., Ltd., you should at once hand this circular, together with the enclosed form of proxy, to the purchaser or transferee or to the bank, licensed securities dealer, registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser or 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.

(Incorporated in Bermuda with limited liability)

(Stock code: 686)

MAJOR TRANSACTION

IN RELATION TO THE ACQUISITION OF THE ENTIRE EQUITY

INTEREST IN A COMPANY IN THE PRC; RE-ELECTION OF RETIRING DIRECTOR

AND

NOTICE OF SPECIAL GENERAL MEETING

A letter from the Board is set out on pages 5 to 18 of this circular.

A notice convening the SGM to be held at Room 1811, 18/F., Building 5, No. 9 Courtyard, Guang'an Road, Fengtai District, Beijing, PRC on Wednesday, 31 March 2021 at 11:00 a.m. is set out on pages SGM-1 to SGM-3 of this circular. A form of proxy for the SGM is enclosed. Whether or not you are able to attend the SGM, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the Company's branch share registrar and transfer office in Hong Kong, Union Registrars Limited at Suites 3301-04, 33/F., Two Chinachem Exchange Square, 338 King's Road, North Point, Hong Kong as soon as practicable but in any event not less than 48 hours before the time appointed for holding of the SGM or any adjournment thereof (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting in person at the SGM or any adjournment thereof (as the case may be) should you so wish.

To facilitate Shareholders attending the SGM, electronic facilities will be set up at the principal place of business of the Company in Hong Kong at Unit 1012, 10/F., West Tower, Shun Tak Centre, 168-200 Connaught Road Central, Hong Kong (the ''Hong Kong Venue'') where Shareholders or his/her/its proxies may participate in the SGM via video conference and cast their votes in person.

PRECAUTIONARY MEASURES FOR THE SPECIAL GENERAL MEETING

In view of the ongoing novel coronavirus disease (''COVID-19'') pandemic, the Company will implement the following precautionary measures at the SGM venue and the Hong Kong Venue for the sake of health and safety of our Shareholders, Directors, staff, stakeholders and other participants, including without limitation:

(1) Compulsory temperature checks
(2) Filling and submission of health declaration form
(3) Wearing of surgical face mask
(4) No refreshments or drinks will be provided

Any person who does not comply with the precautionary measures referred to items no.(1) to (3) above, with body temperature above 37.2 degree Celsius, has any of the symptoms stated in the health declaration form or is subject to any Hong Kong Government prescribed quarantine (in the case of attending Hong Kong Venue), may be denied entry into the SGM venue or the Hong Kong Venue. The Company encourages Shareholders to appoint the chairman of the meeting as their proxy to vote according to their indicated voting instructions on the relevant resolutions at the SGM as an alternative to attending the SGM in person to exercise their voting rights at the SGM. The Company will continue to review the COVID-19 pandemic situation and may implement further precautionary measures and may make relevant adjustments and arrangements for the SGM accordingly. Further announcement will be issued as and when appropriate.

12 March 2021

CONTENTS
Page
Definitions ...................................................................	1
Letter from the Board ........................................................	5

Appendix I	-	Financial Information of the Group .........................	I-1
Appendix II	-	Financial Information of the Target Company ...............	II-1
Appendix III	-	Unaudited Pro Forma Financial Information of
the Enlarged Group .....................................	III-1
Appendix IV	-	Management Discussion and Analysis on the Target Company .	IV-1
Appendix V	-	Valuation Report ..........................................	V-1
Appendix VI	-	Letter from Reporting Accountants in relation to
the Valuation Report and the Letter from the Board
in relation to the Profit Forecast .........................	VI-1
Appendix VII	-	General Information .......................................	VII-1
Appendix VIII	-	Biographical Details of Director Standing for Re-election .....	VIII-1

Notice of Special General Meeting ............................................. SGM-1

DEFINITIONS

In this circular, unless the context specifies otherwise, the following expressions shall have the meanings stated below:

''Acquisition''	the proposed acquisition of the entire equity interest in the
Target Company by the Purchaser from the Vendor, as
contemplated under the Sale and Purchase Agreement
''Announcement''	the announcement of the Company dated 4 December 2020
in relation to the Sale and Purchase Agreement
''associate(s)''	has the meaning ascribed to it under the Listing Rules
''BEH''	Beijing Energy Holding Co., Ltd.*（北京能源集團有限責
任公司）, a company established in the PRC with limited
liability and a controlling shareholder of the Company
holding 7,176,943,498 Shares, representing approximately
32% of the issued capital of the Company
''Board''	the board of Directors of the Company
''Business Day(s)''	a day excluding Saturdays, Sundays and statutory holidays
in the PRC
''Bye-Laws''	the bye-laws of the Company
''CDB Finance Lease Agreement''	the finance lease agreement dated 25 December 2018
entered into between the Target Company and CDB
Leasing
''CDB Leasing''	China Development Bank Financial Leasing Co., Ltd.*（國
銀金融租賃股份有限公司）, a company established in the
PRC with limited liability, the H shares of which are listed
on the Stock Exchange (stock code: 1606)
''Closing''	completion of the Acquisition
''Company''	Beijing Energy International Holding Co., Ltd., a company
incorporated in Bermuda with limited liability, the Shares
of which are listed on the main board of the Stock
Exchange (stock code: 686)
''Conditions Precedent''	the conditions precedent to the completion of the
Acquisition as set out in the Sale and Purchase Agreement

DEFINITIONS
''connected person(s)''	has the meaning ascribed to it under the Listing Rules
''Consideration''	the consideration in the amount of approximately
RMB1,177,829,000 for the Acquisition
''controlling shareholder''	has the meaning ascribed to it under the Listing Rules
''Director(s)''	the directors of the Company
''Enlarged Group''	the Group and the Target Company
''Escrow Account''	the bank account jointly established and operated by the
Vendor and the Purchaser for holding the Second
Instalment of the Consideration pursuant to the terms of
the Sale and Purchase Agreement
''Group''	the Company and its subsidiaries
''HK$''	Hong Kong dollars, the lawful currency of Hong Kong
''Hong Kong''	the Hong Kong Special Administrative Region of the PRC
''independent third party(ies)''	persons who themselves (and in the case of any corporate
entities, their ultimate beneficial owners) are, to the best of
the Directors' knowledge, information and belief having
made all reasonable enquiries, third parties independent of,
and not connected with, the Company and its connected
persons
"Kong Sun Holdings"	Kong Sun Holdings Limited, a company incorporated in
Hong Kong with limited liability, the shares of which are
listed on the main board of the Stock Exchange (stock
code: 295), is the holding company of the Vendor and the
Target Company
''Latest Practicable Date''	8 March 2021, being the latest practicable date prior to the
printing of this circular for the purpose of ascertaining
certain information contained in this circular
''Listing Rules''	the Rules Governing the Listing of Securities on the Stock
Exchange, as amended, supplemented or otherwise
modified from time to time

DEFINITIONS

''Long Stop Date''

30 April 2021

''Nomination Committee''

the nomination committee of the Company

''PRC''

the People's Republic of China excluding Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan for the purpose of this circular

''Previous Acquisitions''

the Group's acquisitions of equity interests in project companies which hold four (4) solar power projects as disclosed in the Voluntary Announcement

''Purchaser''

Beijing United Rongbang New Energy Technology Co., Ltd.*（北京聯合榮邦新能源科技有限公司）, a company established in the PRC with limited liability, and an indirect wholly-owned subsidiary of the Company

''RMB''

Renminbi, the lawful currency of the PRC

''Sale and Purchase Agreement''

the conditional sale and purchase agreement dated 4 December 2020 entered into by the Purchaser, the Vendor and the Target Company in relation to the Acquisition, on the terms and conditions set out therein

''SFO''

Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), as amended, supplemented or otherwise modified from time to time

''SGM'' or ''Special General Meeting''

the special general meeting of the Company to be convened at Room 1811, 18/F., Building 5, No. 9 Courtyard, Guang'an Road, Fengtai District, Beijing, PRC and via video conference set up at the principal place of business of the Company in Hong Kong at Unit 1012, 10/F., West Tower, Shun Tak Centre, 168-200 Connaught Road Central, Hong Kong on Wednesday, 31 March 2021 at 11:00 a.m. or any adjournment thereof, and the notice of which is attached to this circular

''Share(s)''

ordinary share(s) of HK$0.1 each in the share capital of the Company

''Shareholder(s)''

holder(s) of the issued Share(s)

DEFINITIONS

''Stock Exchange''

The Stock Exchange of Hong Kong Limited

''substantial shareholder(s)''

''subsidiary(ies)''

has the meaning ascribed to it under the Companies Ordinance (Chapter 622 of the Laws of Hong Kong), as amended, supplemented and replaced from time to time has the meaning ascribed to it under the Listing Rules

''Target Company''

Yulin City Jiangshan Yongchen New Energy Limited*（榆林市江山永宸新能源有限公司）, a company established in the PRC with limited liability and owned by the Vendor as at the Latest Practicable Date

''Transit Period''

the period from 30 April 2020 (but excluding) to the date of Closing (but excluding)

''Valuation Report''

the valuation report dated 14 August 2020 prepared by the Valuer in relation to the value of the entire equity interest in the Target Company

''Valuer''

ZhongHe Appraisal Co., Ltd., a company established in the PRC with limited liability

''Vendor''

Jiangshan Fengrong Investment Company Limited*（江山豐融投資有限公司）, a company established in the PRC with limited liability, and an indirect wholly-owned subsidiary of Kong Sun Holdings

''Voluntary Announcement''

the voluntary announcement of the Company dated 22 October 2020 in relation to the Previous Acquisitions by the Group of the entire equity interests in four project companies which hold four (4) solar power projects

''%''

per cent

In this circular, the English names of the PRC entities are translations of their Chinese names and included herein for identification purpose only. In the event of any inconsistency, the Chinese names shall prevail.

Executive Directors:

(Incorporated in Bermuda with limited liability)

(Stock code: 686)

Mr. Zhang Ping (Chairman) Mr. Lu Zhenwei

Mr. Xu Jianjun

Non-executive Directors:

Mr. Sui Xiaofeng

Mr. Zhao Bing

Mr. Li Hao Ms. Xie YiIndependent Non-executive Directors: Mr. Kwan Kai Cheong

Mr. Yen Yuen Ho, Tony Mr. Chen Hongsheng Ms. Jin Xinbin

To the Shareholders

Dear Sir or Madam,Registered Office: Clarendon House 2 Church Street Hamilton HM11 Bermuda

Head Office and Principal Place of Business in Hong Kong: Unit 1012, 10/F.

West Tower, Shun Tak Centre 168-200 Connaught Road Central Hong Kong

12 March 2021

MAJOR TRANSACTION

IN RELATION TO THE ACQUISITION OF THE ENTIRE EQUITY

INTEREST IN A COMPANY IN THE PRC; RE-ELECTION OF RETIRING DIRECTOR

AND

NOTICE OF SPECIAL GENERAL MEETING

INTRODUCTION

References are made to the Voluntary Announcement and the Announcement of theCompany dated 22 October 2020 and 4 December 2020 respectively in relation to, among other things, the Previous Acquisitions and the Sale and Purchase Agreement.

Reference is also made to the announcement of the Company dated 29 January 2021 in relation to the appointment of Mr. Zhao Bing as a non-executive Director by the Board.

The purpose of this circular is to provide you with, among other things, (i) details of the Sale and Purchase Agreement; (ii) financial information of the Group and the Target Company; (iii) unaudited pro forma financial information of the Enlarged Group; (iv) the Valuation Report; (v) other information as required under the Listing Rules; (vi) information on re-election of the retiring Director; and (vii) the notice of SGM, to enable you to make an informed decision on whether to vote for or against those resolutions proposed at the SGM.

2. MAJOR TRANSACTION IN RELATION TO THE ACQUISITION OF THE ENTIRE EQUITY INTEREST OF THE TARGET COMPANY

On 4 December 2020 (after trading hours), the Purchaser (an indirect wholly-owned subsidiary of the Company), the Vendor and the Target Company entered into the Sale and Purchase Agreement, pursuant to which the Purchaser conditionally agreed to purchase, and the Vendor conditionally agreed to sell, the entire equity interest in the Target Company. After Closing of the Sale and Purchase Agreement, the Target Company will become an indirect wholly-owned subsidiary of the Company.

The Acquisition

The principal terms of the Sale and Purchase Agreement are set out below：

Date

4 December 2020 (after trading hours)

Parties	(1)	The Purchaser
(2)	The Vendor
(3)	The Target Company

To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, the Vendor and the Target Company and their respective ultimate beneficial owners (if applicable) are independent third parties of the Company and its connected persons.

Equity interest to be acquired

Pursuant to the Sale and Purchase Agreement, the Purchaser conditionally agreed to purchase, and the Vendor conditionally agreed to sell, the entire equity interest in the Target Company.

The Consideration and payment terms

The Consideration for the Acquisition is approximately RMB1,177,829,000, which will be satisfied in the following manner:

(i) an amount of RMB36,500,000 (the ''First Instalment of the Consideration''),

which represents approximately 3.1% of the Consideration, will be paid within ten (10) Business Days upon the execution of the Sale and Purchase Agreement;

(ii) an amount of approximately RMB670,197,000 (the ''Second Instalment of the Consideration''), which represents approximately 56.9% of the Consideration, will be paid into the Escrow Account before the Closing and will be released to the Vendor within ten (10) Business Days after the Closing;
(iii) an amount of approximately RMB301,495,000, which represents approximately 25.6% of the Consideration, will be paid within ten (10) Business Days after completion of the audit with respect to the Target Company for the period from 30 April 2020 to the date of Closing (the ''Transition Period Audit'') and completion of the handover procedures;
(iv) an amount of up to RMB95,800,000, which represents approximately 8.1% of the Consideration, will be paid within ten (10) Business Days upon completion of each of certain rectification works items in respect of the assets of the Target Company by the Vendor required by the Purchaser, which, in any event, shall be completed within one (1) year after the Closing; and
(v) an amount of up to approximately RMB73,837,000, which represents approximately 6.3% of the Consideration, will be paid within ten (10) Business Days upon the receipt of the additional state subsidies for renewable energy electricity price by the Target Company. The information in relation to each receipt of such state renewable energy subsidies will be shown on public website and the Vendor is able to know when the Target Company will receive each batch of the subsidies.

The Group currently expects to finance the Consideration by the internal resources of the Group.

Consideration Adjustment

As at 30 April 2020, the Target Company had the outstanding debts in the net-off amount of approximately RMB94,980,000. Such debts, subject to adjustment for any net increase or decrease thereof during the Transit Period as determined under the Transition Period Audit, shall be settled by the Target Company within ten (10) Business Days after completion of the Transition Period Audit.

The report of the Transition Period Audit will be issued within ten (10) Business Days upon the completion of the Acquisition. In the event of any change of net assets value of the Target Company as a result of matters occurred in non-ordinary course of business during the Transit Period, such change will be considered as a downward consideration adjustment. The Purchaser has the right to request for compensation from the Vendor.

Basis of the Consideration

The Consideration was determined after arm's length negotiation between the Company and the Vendor after considering various factors, including (i) the unaudited net asset of the Target Company as at 31 October 2020 of approximately RMB1,276,547,000, adjusted by applying a discount of approximately 7.7%; (ii) the gearing position of the Target Company; and (iii) the Valuation Report pursuant to which the appraised value of the entire equity interest of the Target Company as at 30 April 2020 was RMB1,455,370,000.

The SFC's ''Guidance note on directors' duties in the context of valuations in corporate transactions'' (the ''Guidance Note'') requires the Directors to carry out independent and sufficient investigation and due diligence in making a decision to invest. In particular, the Directors need to understand the nature of assets or businesses of the Target Company, carefully consider all information and take all reasonable steps to verify the accuracy and reasonableness of material information that is likely to affect the valuation of the Target Company. To assist the Directors' in making the investment decision in the Target Company, ZhongHe Appraisal Co., Ltd., a professional valuer, has been engaged by the Purchaser, an indirect wholly-owned subsidiary of the Company, in relation to the valuation of the Target Company. Upon receipt of the Valuation Report, the Directors have devoted sufficient time to discuss and consider the Valuation Report and the valuation of the Target Company, including but not limited to the basis of computation, scope of review, assumptions, limitations and qualifications and valuation methodologies on which a valuation is based.

After thorough consideration of all the factors that may have an impact on the Valuation, the Directors have considered the followings in adopting a valuation of the Target Company based on the income approach instead of the asset approach:

(1) As set out in Appendix II to this Circular, the net assets of the Target Company as of the end of 2019 and the end of October 2020 were approximately RMB1,398 million and RMB1,281 million, respectively.
(2) The Target Company started to operate in 2017 with an approved feed-in tariff of about RMB0.8/kWh, which is significantly higher when compared with photovoltaic power plants which were built and started to operate in 2020. Considering that this is a transaction to acquire the entire equity interests of the Target Company and the influence of feed-in tariffs on the valuation of the Target Company is substantial, the Directors were of the view that valuation based on the income approach provides a more accurate reflection of the value of the Target Company.
(3) The asset approach used in the Valuation Report is about assessing the market value of the photovoltaic power projects from the perspective of asset replacement, which however has not taken into account the impact of possible incoming cash flow differences in the future in the relevant assets. In short, using the asset approach means only estimating the cost to rebuild a photovoltaic power project of the same size using the current market quotations of the components and equipment, without considering the revenue to be generated by such assets.
(4) Regarding the photovoltaic power project owned by the Target Company (the ''Project''), the Project was completed and started to operate in 2017. The construction cost of a photovoltaic power plant has been decreased significantly in the past years. For example, the average market price of photovoltaic modules, being one of the most important components/equipment for photovoltaic power projects, dropped significantly from around RMB2.92/Wp to RMB3.43/Wp during the construction of the Project, to around RMB1.30/Wp to RMB1.40/Wp currently due to the rapid development of the domestic photovoltaic power industry. With such a drop of more than 50% in the average price of photovoltaic modules, the valuation of the Target Company based on the asset approach therefore has been significantly reduced which reflects the current cost to build up a photovoltaic power plant in the photovoltaic industry.

(5) Despite of the significantly reduced valuation of the Target Company by asset approach, the valuation using the asset replacement cost is regarded as an important reference to the Directors' decision in investing in the Target Company. As aforesaid, the differences in the approved feed-in tariffs for photovoltaic power with different grid-connection times have a significant impact on the valuation of photovoltaic projects. The approved feed-in tariff of the Target Company in 2017 was RMB0.8/kWh, and by 2021, photovoltaic power projects have basically achieved grid parity price, which means if a new photovoltaic power plant is now built in the same area, its feed-in tariff would be only about RMB0.3345/kWh, which drops by about 58%. As a result, the future cash inflow from a replaced photovoltaic power project will be much lower than that currently owned by the Target Company.

In view of the replacement cost and the drop in feed-in tariffs as mentioned above, the feed-in tariffs of the Target Company is much higher than that would have achieved by a replaced photovoltaic power project, and therefore, the valuation using the income approach can better reflect the value of the Target Company. In addition, the valuation using the income approach is relatively closer to the audited net asset value of the Target Company as mentioned above, and the range of added value is reasonably limited. Furthermore, the Directors have discharged their duties of carrying out independent and sufficient investigation and due diligence by understanding the nature of the asset and the business of the Target Company, and having reasonable reliance on the valuation report as required under the Guidance Note.

Based on the above, the Directors (including the independent non-executive Directors) are of the view that the Consideration is fair and reasonable and in the interests of the Company and the Shareholders as a whole.

Summary of the Valuation Report

The appraised value of the entire equity interest of the Target Company under the Valuation Report was prepared using the income approach, through the use of the discounted cash flow method. As a result, such valuation constitutes a profit forecast under Rule 14.61 of the Listing Rules.

Basis assumptions

Details of the key assumptions used in determining the value of the entire equity interest in the Target Company upon which the Valuation Report was issued are set out below:

(i) General Assumptions
- 1. There will be no material change in the state and local laws, regulations, rules and social, political and economic policies currently in force and applicable to the Target Company;
- 2. The Target Company will maintain continuous operation during the lifetime of the power plant;
- 3. There will be no material change in the PRC's existing tax basis and rates, preferential tax policies, bank lending rates and other policy-based charges; and
- 4. There will be no other material adverse impact caused by force majeure or unforeseeable circumstances.
(ii) Specific Assumptions
- 1. Assuming the technical personnel and senior management of the Target Company would remain relatively stable and there would be no significant outflow of the core professional personnel in years;
- 2. The present and future management of the Target Company are responsible and its management would be able to steadily proceed with the development plan of the Target Company to maintain a good operating position;
- 3. The future management of the Target Company would comply with the relevant PRC laws and regulations, and there would be no major non-compliance that might affect the development and earnings of the Target Company;
- 4. Since the electricity generated by the Target Company in prior years has been connected to the grid for settlement according to actual installed capacity, this appraisal assumes that the Target Company will generate electricity according to actual installed capacity and connect to the grid for settlement in the future;

5. In accordance with the ''Report of the State Grid Corporation on Announcing the List of the Second Batch of Renewable Energy Power Generation Subsidy Projects in 2020'' issued on 31 July 2020, the Yulin Yuyang 300MWp Fengrong Photovoltaic Power Station Project of the Target Company is included in the list of the second batch of renewable energy power generation subsidy projects in 2020. Based on the interviews with relevant personnel of the Target Company, the subsidy income of electricity tariff before being included in the subsidy catalogue is expected to be recovered within three (3) years from the valuation base date, and the subsidy income of electricity tariff for 2021 and afterwards is expected to be received within one (1) year; and
6. The accounting policies adopted by the Target Company are basically consistent with the accounting policies and the accounting methods used in revenue forecast in material aspects.

Confirmations

Grant Thornton Hong Kong Limited (''Grant Thornton''), acting as the reporting accountants of the Company, has reviewed and reported to the Directors in respect of the compilation of the discounted future cash flows in connection with the valuation of the Target Company prepared by the Valuer used in the Valuation Report, which do not involve the adoption of accounting policies.

The Directors confirm that the valuation of the entire equity interest of the Target Company in the Valuation Report, which constitutes a profit forecast under Rule 14.61 of the Listing Rules, has been made after due and careful enquiry.

A report from Grant Thornton in compliance with Rule 14.62(2) of the Listing Rules and a letter from the Directors in compliance with Rule 14.62(3) of the Listing Rules are included in Appendix VI to this circular.

The Guarantee

Kong Sun Holdings agreed to guarantee the obligations of the Vendor in favour of the Purchaser under the Sale and Purchase Agreement.

Conditions Precedent

The Closing is conditional on, among other things, Conditions Precedent as set out below:

(i) each party having obtained all necessary internal approvals regarding the transaction contemplated under the Sale and Purchase Agreement, including: (a) with respect to the Target Company, the approval from its sole shareholder, the Vendor; (b) with respect to the Vendor, the approval from its shareholders and the approval from the shareholders of Kong Sun Holdings in accordance with the Listing Rules; and (c) with respect to the Purchaser, the approval from its shareholders and the approval from the shareholders of the Company in accordance with the Listing Rules;
(ii) the written consent from CDB Leasing regarding the approval of the Acquisition in respect of the CDB Finance Lease Agreement;
(iii) the Vendor having procured the restructuring of the Target Company's credits and debts; and

(iv) the Purchaser having paid the Vendor the First Instalment of the Consideration and deposited the Second Instalment of the Consideration into the Escrow Account in accordance with the Sale and Purchase Agreement.

Long Stop Date

If the Conditions Precedent are not fulfilled due to any reason caused by the Vendor or the Target Company by the Long Stop Date, the Purchaser is entitled to terminate the Sale and Purchase Agreement and the Vendor shall refund all payments already made by the Purchaser to the Vendor with an interest of 8% per annum and pay for reasonable fees and expenses to third parties incurred by the Purchaser arising out of, related to or in connection with the Sale and Purchase Agreement; if the Conditions Precedent are not fulfilled due to any reason caused by the Purchaser by the Long Stop Date, the Vendor is entitled to terminate the Sale and Purchase Agreement and the Vendor shall refund all payments already made by the Purchaser to the Vendor and the Purchaser shall pay for reasonable fees and expenses to third parties incurred by the Vendor arising out of, related to or in connection with the Sale and Purchase Agreement.

Closing

As at the Latest Practicable Date, the Purchaser has paid the Vendor the First Instalment of the Consideration. Closing shall take place when the Conditions Precedent have been fulfilled and the registration of the transfer of the entire equity interest in the Target Company to the Purchaser has been completed with the relevant administration for industry and commerce and a new business license has been issued to the Target Company.

Upon Closing, the Target Company will become an indirect wholly-owned subsidiary of the Company and the results and assets and liabilities of the Target Company will be consolidated into the consolidated financial statements of the Company.

Arrangements during the Transit Period

Any profits generated and any losses incurred and any changes to the net assets of the Target Company during the Transit Period, subject to the Transition Period Audit, shall be borne by the Target Company.

During the Transit Period, the Vendor shall ensure that, among other things, the Target Company will continue its normal business operations in accordance with its past practices and, save for the equity pledge over the entire equity interest in the Target Company in favour of CDB Leasing to secure the CDB Finance Lease Agreement as permitted under the Sale and Purchase Agreement, no encumbrances or other third party rights will be created with respect to the equity interest in the Target Company without the prior written consent of the Purchaser.

Special Arrangement

Under the CDB Finance Lease Agreement, the Vendor and its related companies which are subsidiaries of Kong Sun Holdings provided guarantee for securing the existing borrowings of the Target Company. Pursuant to the Sale and Purchase Agreement, by no later than 90 (ninety) days after the Closing, the Purchaser shall provide necessary financing facilities to the Target Company for its repayment of the outstanding amount under the CDB Finance Lease Agreement and procure the release of the guarantee. In the event that the Purchaser does not procure completion of the release of the guarantee within ninety (90) days after the Closing, the Vendor shall have the right to seek for damages from the Purchaser and default penalty incurred thereunder calculated at an annual percentage rate of 0.2% based on the principal of guarantee amount. If the Purchaser fails to procure completion of the release of the guarantee within the agreed time, the Vendor shall have the right to rescind the Sale and Purchase Agreement, and seek for damages from the Purchaser in the maximum amount of RMB30,000,000 and the Purchaser shall bear all the costs and expenses in connection with the transactions contemplated thereunder. The Company will then make assessment on the possible implications under the Listing Rules and make further disclosure as and when appropriate to comply with it.

3. INFORMATION ABOUT THE PARTIES TO THE SALE AND PURCHASE AGREEMENT

Information of the Group and the Purchaser

The Company is a company incorporated in Bermuda with limited liability and is an investment holding company operating its business through its subsidiaries. The Group is principally engaged in the development, investment, operation and management of solar power plants and other renewable energy projects. The Purchaser is a company established in the PRC with limited liability and an indirect wholly-owned subsidiary of the Company. It is principally engaged in the development and operation of clean energy such as solar energy.

Information of the Target Company

The Target Company is a company established in the PRC with limited liability. The Target Company is principally engaged in the operation, maintenance and management of solar power plants in the PRC and located in Shaanxi, the PRC.

The table below sets out certain financial information of the Target Company for the years ended 31 December 2018 and 2019:

For the year ended

31 December

2018	2019
(audited)	(audited)
RMB'000	RMB'000
Profit before taxation	146,489	47,089
Profit after taxation	146,489	47,089

The net asset value of the Target Company as at 31 October 2020 was approximately RMB1,281,032,000.

Information of the Vendor

The Vendor is an indirect wholly-owned subsidiary of Kong Sun Holdings. The Vendor is principally engaged in the investment in and operation of solar power plants. As at the Latest Practicable Date, the Target Company is a direct wholly-owned subsidiary of the Vendor.

Kong Sun Holdings is a company incorporated in Hong Kong with limited liability, the shares of which are listed on the main board of the Stock Exchange (stock code: 295). It is principally engaged in the investment in and operation of solar power plants, provision of solar power plant operation and maintenance services, provision of financial services, trading of liquefied natural gas and asset management.

To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, each of the Vendor and its ultimate beneficial owner is an independent third party of the Company and connected persons of the Company.

4. REASONS FOR AND BENEFITS OF THE ACQUISITION

The Group, being principally engaged in the development, investment, operation and management of solar power plants and other renewable energy projects, has been identifying suitable investment opportunities to acquire renewable energy projects with good prospects and potential for stable returns.

The Board is of the view that the Acquisition will be complementary to the Group's existing renewable power plant portfolio and enables the Group to further expand its scale of business in the renewable energy sector to enhance return to the Shareholders. The Acquisition is therefore considered by the Board to be a good opportunity to expand the Group's existing renewable energy business.

The Directors (including the independent non-executive Directors) consider that the terms and conditions of the Acquisition are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

5. IMPLICATIONS OF THE LISTING RULES

Pursuant to Rule 14.22 of the Listing Rules, the Previous Acquisitions and the Acquisition are required to be aggregated for the purpose of classification of transaction under Chapter 14 of the Listing Rules. As the highest applicable percentage ratio in respect of the aggregation of the Previous Acquisitions and the Acquisition is more than 25% but is less than 100%, the Previous Acquisitions and the Acquisition together constitute a major transaction of the Company under Chapter 14 of the Listing Rules and are therefore subject to the reporting, announcement, circular and Shareholders' approval requirements under Chapter 14 of the Listing Rules.

6. RE-ELECTION OF RETIRING DIRECTOR

Reference is made to the announcement of the Company dated 29 January 2021 in relation to the appointment of Mr. Zhao Bing as a non-executive Director by the Board.

In accordance with Bye-Law 83(2) of the Bye-Laws, any Director appointed by the Board to fill a casual vacancy shall hold office until the first general meeting of Shareholders after his/her appointment and be subject to re-election at such meeting. Accordingly, Mr. Zhao Bing shall retire and, being eligible, offer himself for re-election and the Board has recommended Mr. Zhao Bing for re-election at the SGM. The biographical details of Mr. Zhao Bing are set out in Appendix VIII to this circular.

The Nomination Committee, having considered the nomination policy of the Company and reviewed the background, skills, knowledge and experience of the proposed Director, is of the view that Mr. Zhao Bing's education background and vast experience in finance and management aspects allow him to provide valuable insights and contribute to the diversity of the Board. In view of the above, the Nomination Committee has nominated Mr. Zhao Bing to the Board for consideration.

Having considered and reviewed the biographical details of Mr. Zhao Bing, the Board accepted the Nomination Committee's nomination and recommended Mr. Zhao Bing for re-election by the Shareholders at the SGM. In view of the above, the Board considers that the re-election of Mr. Zhao Bing is in the interests of the Company and the Shareholders as a whole.

7. SPECIAL GENERAL MEETING

A notice convening the SGM is set out on pages SGM-1 to SGM-3 of this circular, at which ordinary resolutions will be proposed for the Shareholders to consider, and if thought fit, to approve the Sale and Purchase Agreement and the transactions contemplated thereunder and the re-election of the retiring Director.

For the purpose of determining the entitlement for attending and voting at the SGM, the register of members of the Company will be closed from Friday, 26 March 2021 to Wednesday, 31 March 2021 (both days inclusive), during which period no transfer of Shares will be registered. In order to be qualified for attending and voting at the SGM, all transfers of Shares accompanied by the relevant share certificates must be lodged at the Company's branch share registrar and transfer office in Hong Kong, Union Registrars Limited, Suites 3301-04, 33/F., Two Chinachem Exchange Square, 338 King's Road, North Point, Hong Kong for registration not later than 4:00 p.m. on Thursday, 25 March 2021.

A form of proxy for use at the SGM is enclosed to this circular and such form of proxy is also published on websites of the Stock Exchange (http://www.hkexnews.hk) and the Company (http://www.bjei.com). In order to be valid, the form of proxy must be completed and signed in accordance with the instructions printed thereon and deposited at the Company's branch share registrar and transfer office in Hong Kong, Union Registrars Limited at Suites 3301-04, 33/F., Two Chinachem Exchange Square, 338 King's Road, North Point, Hong Kong together with a power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power of attorney or authority, not less than 48 hours before the time for holding the SGM or any adjournment thereof (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting in person at the SGM or any adjournment thereof (as the case may be) should you so wish.

To the best knowledge, information and belief of the Directors having made all reasonable enquiries, none of the Shareholders has any material interest in the Sale and Purchase Agreement and the Acquisition. Therefore, no Shareholder is required to abstain from voting at the SGM in respect of the ordinary resolutions approving (i) the Sale and Purchase Agreement and the transactions contemplated thereunder and (ii) re-election of the retiring Director.

8. VOTING BY WAY OF POLL

According to Rule 13.39(4) of the Listing Rules, all votes of shareholders at a general meeting must be taken by poll, except where the chairman, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands. Therefore, all the resolutions put to the vote at the SGM will be taken by way of poll and the Company will announce the results of the poll in the manner prescribed under Rule 13.39(5) of the Listing Rules.

9. RECOMMENDATION

The Board considers that the terms of the Sale and Purchase Agreement and the transactions contemplated thereunder are on normal commercial terms and are fair and reasonable and in the interests of the Company and the Shareholders as a whole. The Board also considers that the re-election of Mr. Zhao Bing is in the interests of the Company and the Shareholders as a whole.

Accordingly, the Board recommends the Shareholders to vote in favour of the ordinary resolutions to be proposed in respect of approving (i) the Sale and Purchase Agreement and the transactions contemplated thereunder and (ii) the re-election of the retiring Director at the SGM.

For and on behalf of

Beijing Energy International Holding Co., Ltd.

Zhang Ping

Chairman of the Board

1. FINANCIAL INFORMATION OF THE GROUP

The published audited consolidated financial statements of the Group for each of the three years ended 31 December 2017, 2018 and 2019 and the unaudited consolidated financial statements for the six months ended 30 June 2020 are disclosed in the following documents, which can be accessed on both the websites of the Stock Exchange (http://www.hkexnews.hk) and the Company (http://www.bjei.com).

(i) Annual report of the Company for the year ended 31 December 2017 (pages 96-182),

which can be accessed via the link at:https://www1.hkexnews.hk/listedco/listconews/sehk/2018/0413/ltn20180413365.pdf

(ii) Annual report of the Company for the year ended 31 December 2018 (pages 82-174),

which can be accessed via the link at:https://www1.hkexnews.hk/listedco/listconews/sehk/2019/0429/ltn201904291010.pdf

(iii) Annual report of the Company for the year ended 31 December 2019 (pages 84-190), which can be accessed via the link at:https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0830/2020083000035.pdf
(iv) Interim report of the Company for the six months ended 30 June 2020 (pages 20-51), which can be accessed via the link at:https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0929/2020092900849.pdf

2. STATEMENT OF INDEBTEDNESS OF THE ENLARGED GROUP

Indebtedness

As at the close of business on 28 February 2021, being the latest practicable date for the purpose of this indebtedness statement prior to the printing of this circular, the Group and the Target Company had the following indebtedness:

The Target

The Group	Company	Total
RMB'million	RMB'million	RMB'million
Bank borrowings
Secured and with guarantee	6,371	-	6,371
Secured and without guarantee	709	-	709
Unsecured and with guarantee	4,369	-	4,369
Unsecured and without guarantee	500	-	500

APPENDIX I

Finance lease liabilities

The Target

FINANCIAL INFORMATION OF THE GROUP

The Group	Company	Total
RMB'million	RMB'million	RMB'million
Secured and with guarantee	5,948	1,489	7,437
Secured and without guarantee	286	-	286
Unsecured and with guarantee	252	-	252
Medium-term notes
Unsecured and with guarantee	300	-	300
Senior notes
Unsecured and with guarantee	796	-	796
19,531	1,489	21,020

Save as aforesaid and apart from intra-group liabilities, the Group did not have any debt securities issued and outstanding, and authorized or otherwise created but unissued, or any material outstanding loan capital, bank overdrafts, loans, mortgages, charges or other similar indebtedness, liabilities under acceptances (other than normal trade bills) or acceptance credits, hire purchase commitments, guarantees or any other actual or material contingent liabilities outstanding at the close of business on 28 February 2021, being the latest practicable date for the purpose of this indebtedness statement prior to the printing of this circular.

The Directors confirm that there has been no material change to the indebtedness and contingent liabilities of the Group since 28 February 2021 up to and including the Latest Practicable Date.

3. SUFFICIENCY OF WORKING CAPITAL

Taking into account the financial resources of the Group (including the Group's internal resources, available banking and other borrowing facilities and credit enhancement guarantee from BEH), in the absence of any unforeseen circumstances, the Directors are of the opinion that the Group will have sufficient working capital for the Group's requirements for the next 12 months from the date of the circular.

4. MATERIAL CHANGES

As at the Latest Practicable Date, save as disclosed in the announcements of the Company dated 15 January 2020, 17 January 2020, 24 January 2020, 10 February 2020, 19 March 2020, 30 March 2020, 9 April 2020, 15 April 2020, 12 May 2020, 13 May 2020, 10 July 2020, 19 July 2020, 31 July 2020 and 25 August 2020, there has not been any material change in the financial or operation position or outlook of the Group since 31 December 2019, being the date to which the latest published audited consolidated financial statements of the Group were made up, up to and including the Latest Practicable Date.

5. FINANCIAL AND OPERATION PROSPECTS OF THE GROUP

The Group is primarily engaged in the development, investment, operation and management of solar power plants and other renewable projects.

In February 2020, the Company completed the allotment and issuance of Shares to BEH and BEH became the single largest and controlling Shareholder. Upon completion of the subscription, BEH issued a letter to the Group and agreed to provide credit enhancement guarantee in the amount of RMB8 to 10 billion for a period of 3 years, depending on the actual operating funding needs of the Group.

As at 31 December 2020, the Group had 61 grid-connected power plants with an aggregate installed capacity of approximately 2,070 MW in the PRC. According to the Group's preliminary operational statistics, the 61 power plants generated electricity in an aggregate volume of approximately 644,070 megawatt hours (''MWh'' ）in the fourth quarter of 2020, and the aggregate electricity generation volume for the twelve months ended 31 December 2020 has amounted to approximately 2,756,702 MWh.

Looking forward, with the strong support of BEH, the Group will further focus on its main business. It will fully leverage on the opportunity of the transition of energy structure to a clean and low-carbon model and its rapid development and determine the main line of business development. Meanwhile, the Group will coordinate domestic and overseas market resources to optimize assets allocation, and realise scale expansion and intensive development of photovoltaic power and wind power and other new energy businesses. In addition to the rapid development of existing new energy businesses, the Group will keep up with the industry's high-tech and new technology development trends, and actively promote the combination of energy and data by capturing new opportunities arising from the clean energy industry ecosystem. Furthermore, it will mainly focus on integrated energy business with the focus placed on big data, and integrate various types of resources including distributed energy, energy storage and hydrogen energy and user loads. It will research and promote the multi-energy complementary integrated services and terminal energy solutions based on renewable energy. By realizing the business optimization transformation and sustainable healthy development of the Group through value creation, it will be in the best interest of the Group and its Shareholders.

The following is the text of accountants' report, prepared for the sole purpose of inclusion in this circular, received from the independent reporting accountants, Grant Thornton Hong Kong Limited, Certified Public Accountants, Hong Kong.

ACCOUNTANTS' REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE DIRECTORS OF BEIJING ENERGY INTERNATIONAL HOLDING CO., LTD.

Introduction

We report on the historical financial information of Yulin City Jiangshan Yongchen New Energy Limited (the ''Target Company'') set out on pages II-5 to II-56, which comprises the statements of financial position of the Target Company as at 31 December 2017, 2018, 2019 and 31 October 2020, and the statements of profit or loss and other comprehensive income, the statements of changes in equity and the statements of cash flows for each of the years ended 31 December 2017, 2018, 2019 and the ten months ended 31 October 2020 (the ''Relevant Periods'') and a summary of significant accounting policies and other explanatory information (together, the ''Historical Financial Information''). The Historical Financial Information set out on pages II-5 to II-56 forms an integral part of this report, which has been prepared for inclusion in the circular of Beijing Energy International Holding Co., Ltd. (the ''Company'') dated 12 March 2021 in connection with the proposed acquisition of 100% equity interests in the Target Company by the Company (the ''Acquisition'').

Directors' Responsibility for the Historical Financial Information

The directors of the Company are responsible for the preparation of the Historical Financial Information that gives a true and fair view in accordance with the basis of preparation and presentation set out in Note 2.1 to the Historical Financial Information and for such internal control as the directors of the Target Company determine is necessary to enable the preparation of the Historical Financial Information that is free from material misstatement, whether due to fraud or error.

Reporting Accountants' Responsibility

Our responsibility is to express an opinion on the Historical Financial Information and to report our opinion to you. We conducted our work in accordance with Hong Kong Standard on Investment Circular Reporting Engagements 200 ''Accountants' Reports on Historical Financial Information in Investment Circulars'' issued by the Hong Kong Institute of Certified PublicAccountants (''HKICPA''). This standard requires that we comply with ethical standards and plan and perform our work to obtain reasonable assurance about whether the Historical Financial Information is free from material misstatement.

Our work involved performing procedures to obtain evidence about the amounts and disclosures in the Historical Financial Information. The procedures selected depend on the reporting accountants' judgement, including the assessment of risks of material misstatement of the Historical Financial Information, whether due to fraud or error. In making those risk assessments, the reporting accountants consider internal control relevant to the entity's preparation of Historical Financial Information that gives a true and fair view in accordance with the basis of preparation and presentation set out in Note 2.1 to the Historical Financial Information in order to design procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Our work also included evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the Historical Financial Information.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

In our opinion, the Historical Financial Information gives, for the purposes of the accountants' report, a true and fair view of the Target Company's financial position as at 31 December 2017, 2018, 2019 and 31 October 2020, and of it's financial performance and cash flows for the Relevant Periods in accordance with the basis of preparation and presentation set out in Note 2.1 to the Historical Financial Information.

Material uncertainty related to going concern

We draw attention to Note 2.1 to the Historical Financial Information which indicates that at 31 October 2020, the Target Company had cash and cash equivalents amounted to RMB555,000. This indicates a condition which may cast significant doubt about the Target Company's ability to continue as a going concern. The directors of the Company had made an assessment and concluded the Target Company is able to continue as a going concern and will have sufficient financial resources to support its current operations to meet its financial obligations as and when they fall due for at least the next twelve months from the end of the reporting period, having regard to (i) the Target Company's current and forecasted cash positions; and (ii) the financial support from the existing ultimate holding company before the Acquisition and from the new ultimate holding company after the Acquisition. Our opinion is not modified in respect of this matter.

Review of stub period comparative financial information

We have reviewed the stub period comparative financial information of the Target Company which comprises the statement of profit or loss and other comprehensive income, the statement of changes in equity and the statement of cash flows for the ten months ended 31 October 2019 and other explanatory information (the ''Stub Period Comparative Financial Information'').

The directors of the Company are responsible for the preparation of the Stub Period Comparative Financial Information in accordance with the basis of preparation and presentation set out in Note 2.1 to the Historical Financial Information.

Our responsibility is to express a conclusion on the Stub Period Comparative Financial Information based on our review. We conducted our review in accordance with Hong Kong Standard on Review Engagements 2410 ''Review of Interim Financial Information Performed by the Independent Auditor of the Entity'' issued by the HKICPA. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Hong Kong Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Based on our review, nothing has come to our attention that causes us to believe that the Stub Period Comparative Financial Information, for the purposes of the accountants' report, is not prepared, in all material respects, in accordance with the basis of preparation and presentation set out in Note 2.1 to the Historical Financial Information.

REPORT ON MATTERS UNDER THE RULES GOVERNING THE LISTING OF SECURITIES ON THE STOCK EXCHANGE OF HONG KONG LIMITED AND THE COMPANIES (WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE

Adjustments

In preparing the Historical Financial Information, no adjustments to the Underlying Financial Statements as defined on page II-5 have been made.

Dividends

We refer to Note 12 to the Historical Financial Information which contains information about the dividends declared by the Target Company in respect of the Relevant Periods.

Grant Thornton Hong Kong Limited

Certified Public Accountants

Level 12

28 Hennessy Road Wanchai

Hong Kong

12 March 2021

Chiu Wing Ning

Practising Certificate No.: P04920

I. HISTORICAL FINANCIAL INFORMATION

Preparation of Historical Financial Information

Set out below is the Historical Financial Information which forms an integral part of this accountants' report.

The financial statements of the Target Company for the Relevant Periods, on which the Historical Financial Information is based, were audited by Grant Thornton Hong Kong Limited in accordance with Hong Kong Standards on Auditing issued by the Hong Kong Institute of Certified Public Accountants (''HKICPA'' )( ''Underlying Financial Statements'').

The Historical Financial Information is presented in Renminbi (''RMB'') and all values are rounded to the nearest thousand (RMB'000) except when otherwise indicated.

(A) Statements of Profit or Loss and Other Comprehensive Income

Ten months ended

Notes	2017	2018	2019	2020
RMB'000	RMB'000	RMB'000	RMB'000	RMB'000
(Unaudited)
Revenue	4	97,131	245,129	277,202	251,513	281,188
Other income	5	-	5,230	100	-	100
Employee benefits expenses	(737)	(1,493)	(1,627)	(1,401)	-
Guarantee fees	-	-	(17,123)	(14,269)	(15,125)
Maintenance costs	(10,995)	(11,588)	(10,418)	(5,226)	(14,544)
Other expenses	(1,739)	(4,736)	(8,925)	(7,628)	(10,115)
EBITDA#	83,660	232,542	239,209	222,989	241,504
Depreciation of property,
plant and equipment	(34,283)	(82,406)	(82,805)	(69,004)	(68,985)
Depreciation of right-of-use assets	-	-	(3,787)	(3,139)	(3,245)
Amortisation of land use rights	(1,860)	(3,680)	-	-	-
(Loss)/Gain on disposal of property, plant and
equipment	-	(27)	-	-	14
Finance income	6	-	60	219	166	170
Finance costs	7	-	-	(105,747)	(87,451)	(91,463)
Profit before income tax	8	47,517	146,489	47,089	63,561	77,995
Income tax expense	11	-	-	-	-	(5,528)
Profit and total comprehensive income for the
year/period	47,517	146,489	47,089	63,561	72,467

31 October 2019

Year ended 31 December

EBITDA represents earnings before depreciation, finance income, finance costs, income tax expense and non-cash items. EBITDA is not a measure of performance under Hong Kong Financial Reporting Standards, but is widely used by management for monitoring business performance of a company from operational perspective. It may not be comparable to similar measures presented by the other companies.

APPENDIX IIFINANCIAL INFORMATION OF THE TARGET COMPANY

(B)Statements of Financial Position

As at
As at 31 December	31 October
Notes	2017	2018	2019	2020
RMB'000	RMB'000	RMB'000	RMB'000
Non-current assets
Property, plant and equipment	13	2,129,159	2,060,608	1,978,803	1,909,697
Land use rights	14	97,533	93,853	-	-
Right-of-use assets	15	-	-	95,401	92,156
Deposit for acquisition of land use rights	-	2,500	-	-
Pledged deposit	18	-	143,741	143,741	143,741
2,226,692	2,300,702	2,217,945	2,145,594
Current assets
Trade and tariff adjustment receivables	16	120,965	228,413	428,954	524,102
Prepayments and other receivables	17	87,858	244,766	208,214	149,335
Amount due from an intermediate holding
company	23	150,071	198,495	171,446	172,859
Restricted cash	18	-	-	58,512	52,792
Cash and cash equivalents	18	7	81,246	6,659	555
358,901	752,920	873,785	899,643
Current liabilities
Other payables	19	1,295,982	65,341	66,337	75,874
Amount due to immediate holding company	23	5,000	47,764	47,764	237,530
Amounts due to fellow subsidiaries	23	37,094	34,784	24,848	39,809
Other borrowings	20	-	41	41	41
Income tax payable	-	-	-	909
1,338,076	147,930	138,990	354,163
Net current (liabilities)/assets	(979,175)	604,990	734,795	545,480
Total assets less current liabilities	1,247,517	2,905,692	2,952,740	2,691,074
Non-current liability
Other borrowings	20	-	1,554,450	1,554,409	1,410,042
Net assets	1,247,517	1,351,242	1,398,331	1,281,032
EQUITY
Share capital	21	1,200,000	1,200,000	1,200,000	1,200,000
Reserves	47,517	151,242	198,331	81,032
Total equity	1,247,517	1,351,242	1,398,331	1,281,032
II - 6

APPENDIX IIFINANCIAL INFORMATION OF THE TARGET COMPANY

(c)Statements of Changes in Equity

At 1 January 2017

Total comprehensive income: Profit for the year

Transaction with equity holders: - Transfer to statutory reserveAt 31 December 2017 and

1 January 2018

Total comprehensive income: Profit for the year

Transactions with equity holders: - Dividend declared (Note 12) - Transfer to statutory reserveTotal transactions with owners

At 31 December 2018 and

1 January 2019

Total comprehensive income: Profit for the year

Transaction with equity holders: - Transfer to statutory reserveAt 31 December 2019 and

1 January 2020

Total comprehensive income: Profit for the period

Transaction with equity holders: - Dividend declared (Note 12)Share capital

RMB'000

Statutory

reserve* RMB'000

Retained earnings* RMB'000

Total RMB'000

1,200,000

47,517

4,752

(4,752)

1,200,000

4,752

42,765

1,247,517

146,489

- - -

- 14,649 14,649

(42,764) (14,649)

(42,764)

(57,413)

(42,764)

1,200,000

19,401

131,841

1,351,242

47,089

4,709

(4,709)

1,200,000

24,110

174,221

1,398,331

72,467

(189,766)

At 31 October 2020

For the ten months ended

31 October 2019 (unaudited) At 1 January 2019

Total comprehensive income: Profit for the period

1,200,000

24,110

56,922 1,281,032

1,200,000

19,401

131,841 1,351,242

63,561

At 31 October 2019

1,200,000

19,401

195,402

1,414,803

*These reserve accounts comprise the Target Company's reserves in the statements of financial position.

APPENDIX IIFINANCIAL INFORMATION OF THE TARGET COMPANY

(D)Statements of Cash Flows

2017	2019
RMB'000	RMB'000	RMB'000

Cash flows from operating activities
Profit before income tax	47,517	146,489	47,089
Adjustments for:
Government grant	-	-	(100)
Depreciation of property, plant and
equipment	34,283	82,406	82,805
Depreciation of right-of-use assets	-	-	3,787
Amortisation of land use rights	1,860	3,680	-
Loss/(Gain) on disposal of property,
plant and equipment	-	27	-
Finance income	-	(60)	(219)
Finance costs	-	-	105,747
Operating profit before working capital
changes	83,660	232,542	239,109
Increase in trade and tariff adjustment
receivables	(120,965)	(107,448)	(200,541)
(Increase)/Decrease in prepayments and
other receivables	(80,038)	(156,908)	36,552
Increase/(Decrease) in other payables	27,198	(1,230,641)	996
Cash generated (used in)/from operations	(90,145)	(1,262,455)	76,116
Income tax paid	-	-	-
Net cash (used in)/from
operating activities	(90,145)	(1,262,455)	76,116
II - 8

Year ended 31 December
2018	2019	2020
RMB'000	RMB'000
(Unaudited)
63,561	77,995
-	(100)
69,004	68,985
3,139	3,245
-	-
-	(14)
(166)	(170)
87,451	91,463
222,989	241,404
(189,912)	(95,148)
30,054	58,879
(18,906)	1,439
44,225	206,574
-	(4,619)
44,225	201,955

Ten months ended 31 October

APPENDIX IIFINANCIAL INFORMATION OF THE TARGET COMPANY

2017	2019
RMB'000	RMB'000	RMB'000

Cash flows from investing activities
Purchase of property, plant and equipment	(99)	(100)	-
Deposit paid for acquisition of land use
rights	-	(2,500)	-
Payment for construction in progress	(390,941)	(13,838)	(1,000)
Purchase of land use rights	(72,394)	-	(2,835)
Proceeds from disposal of property, plant
and equipment	-	56	-
Decrease/(Increase) in amount due from an
intermediate holding company	497,446	(48,424)	27,049
Interest received	-	60	219
Receipts of government grant	-	-	100
Net cash from/(used in) investing activities	34,012	(64,746)	23,533
Cash flows from financing activities
Proceeds from other borrowings	-	1,554,491	-
Repayment of other borrowings	-	-	(8,000)
Increase in pledged deposits	-	(143,741)	-
(Increase)/Decrease in restricted cash	-	-	(58,512)
Interests paid on other borrowings	-	-	(97,788)
Proceeds from fellow subsidiaries	-	260,051	29,353
Repayment to fellow subsidiaries	-	(262,361)	(39,289)
Net cash from/(used in) financing
activities	-	1,408,440	(174,236)
Net (decrease)/increase in cash and
cash equivalents	(56,133)	81,239	(74,587)
Cash and cash equivalent at beginning
of the year/period	56,140	7	81,246
Cash and cash equivalent at end of
year/period	7	81,246	6,659
II - 9

Year ended 31 December
2018	2019	2020
RMB'000	RMB'000
(Unaudited)
-	-
-	-
-	-
(2,835)	-
-	135
42,248	(1,413)
166	170
-	100
39,579	(1,008)
-	-
(6,000)	(151,000)
-	-
(47,621)	5,720
(72,335)	(76,732)
26,810	15,082
(39,289)	(121)
(138,435)	(207,051)
(54,631)	(6,104)
81,246	6,659
26,615	555

Ten months ended 31 October

II. NOTES TO THE HISTORICAL FINANCIAL INFORMATION OF THE TARGET COMPANY

1. General Information

Yulin City Jiangshan Yongchen New Energy Limited (the ''Target Company'') was established in the People's Republic of China (the ''PRC'') on 27 March 2013. The address of its registered office is Zaoliutai Village, Xiaohaotu Township, Yuyang District, Yulin City, Shaanxi Province, PRC. The Target Company is principally engaged in the development, operation and management of solar power plants.

The Target Company's immediate holding company is Jiangshan Fengrong Investment Company Limited（江山豐融投資有限公司，''江山豐融''）, a company incorporated in the PRC with limited liability. In the opinion of the directors of the Target Company, the ultimate holding company of the Target Company is Kong Sun Holdings Limited（江山控股有限公司）, a company incorporated in Hong Kong and its shares are listed on The Stock Exchange of Hong Kong Limited (the ''Stock Exchange'').

2. Summary of Significant Accounting Policies 2.1 Basis of preparation and presentation

The Historical Financial Information set out in this report has been prepared in accordance with Hong Kong Financial Reporting Standards (''HKFRSs'') which includes all applicable individual Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards, amendments and interpretations issued by the Hong Kong Institute of Certified Public Accountants (''HKICPA'') and the accounting principles generally accepted in Hong Kong and the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

For the purpose of preparing and presenting the Historical Financial Information for the Relevant Periods, the Target Company has applied all HKFRSs which are effective for the financial period beginning on or after 1 January 2020 consistently throughout the Relevant Periods to the extent required or allowed by transitional provisions in the HKFRSs, except that the Target Company adopted (i) HKFRS 9 ''Financial Instruments'' and related amendments and HKFRS 15 ''Revenue from

Contracts with Customers'' and related amendments on 1 January 2018 based on the specific transitional provision and applied HKAS 39 ''Financial Instruments:

Recognition and Measurement'' and HKAS 18 ''Revenue'' prior to 1 January 2018; and (ii) HKFRS 16 ''Leases'' on 1 January 2019 based on the specific transitional provision and applied HKAS 17 ''Leases'' prior to 1 January 2019. The adoption of new or amended HKFRSs that are issued but not yet effective and their impact on Historical Financial Information, if any, are disclosed in Note 2.1(a).

The Historical Financial Information has been prepared on the historical cost basis. The measurement bases are fully described in the accounting policies below.

In preparing the Historical Financial Information, the directors of Beijing Energy International Holding Co., Ltd. (the ''Company''), an exempted limited liability company incorporated in Bermuda and its shares are listed on the Stock Exchange, have given consideration to the future liquidity of the Target Company in light of its cash and cash equivalents as at 31 October 2020 amounted to RMB555,000. This indicates a condition which may cast significant doubt about the Target Company's ability to continue as a going concern. The directors of the Company had made an assessment and concluded the Target Company is able to continue as a going concern and will have sufficient financial resources to support its current operations and to meet its financial obligations as and when they fall due for at least the next twelve months from the end of the reporting period, having regard to (i) the Target Company's current and forecasted cash positions; and (ii) the financial support from the existing ultimate holding company before the proposed acquisition of 100% equity interests in the Target Company by the Company (the ''Acquisition'') and from the new ultimate holding company after the Acquisition. Consequently, the Historical Financial Information have been prepared on a going concern basis.

The preparation of the Historical Financial Information in conformity with

HKFRSs requires the use of certain critical accounting estimates. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Historical Financial Information are disclosed in Note 3 below.

The Historical Financial Information is presented in Renminbi (''RMB''), rounded to the nearest thousand (RMB'000), which is also the functional currency of the Target Company.

(a) Issued but not yet effective HKFRSs

The Target Company has not early adopted the following new and amended HKFRSs which have been issued but are not yet effective for the Relevant Periods.

HKFRS 17	Insurance Contracts and related
amendments4
Amendments to HKFRS 3	Reference to the Conceptual Framework6
Amendments to HKFRS 9,	Interest Rate Benchmark Reform - Phase 22
HKAS 39, HKFRS 7,
HKFRS 4 and HKFRS 16
Amendments to HKFRS 10	Sale or Contribution of Assets between an
and HKAS 28	Investor and its Associate or Joint
Venture5
Amendments to HKFRS 16	Covid-19-Related Rent Concessions1
Amendments to HKAS 1	Classification of Liabilities as Current or
Non-current4
Amendments to HKAS 16	Property, Plant and Equipment -Proceeds
before Intended Use3
Amendments to HKAS 37	Onerous Contracts - Cost of Fulfilling a
Contract3
Amendments to HKFRSs	Annual Improvements to HKFRS Standards
2018-20203
Amendments to Accounting	Merger Accounting for Common Control
Guideline 5	Combinations7

1	Effective for annual periods beginning on or after 1 June 2020
2	Effective for annual periods beginning on or after 1 January 2021
3	Effective for annual periods beginning on or after 1 January 2022
4	Effective for annual periods beginning on or after 1 January 2023
5	Effective date not yet determined
6	Effective for business combinations for which the acquisition date is on or after the
beginning of the first annual period beginning on or after 1 January 2022
7	Effective for common control combinations that occur on or after the beginning of the
first annual reporting period beginning on or after 1 January 2022

The directors of the Target Company anticipate that all of the pronouncements will be adopted in the Target Company's accounting policy for the first period beginning after the effective date of the pronouncement, and these are not expected to have a material impact on the Target Company's Historical Financial Information.

(b) Impacts and changes in accounting policies of application on HKFRS 16 ''Leases''

This note explains the impact of the adoption of HKFRS 16 ''Leases'' since 1 January 2019 on the Target Company's Historical Financial Information.

HKFRS 16 ''Leases'' replaces HKAS 17 ''Leases'' along with three

Interpretations (HK(IFRIC)-Int 4 ''Determining whether an Arrangement contains a Lease'', HK(SIC)-Int 15 ''Operating Leases-Incentives'' and HK(SIC)-Int 27 ''Evaluating the Substance of Transactions Involving the Legal Form of a Lease'').

For contracts in place at the date of initial application, the Target Company has elected to apply the definition of a lease from HKAS 17 and HK(IFRIC)-Int 4 and has not applied HKFRS 16 to arrangements that were previously not identified as lease under HKAS 17 and HK(IFRIC)-Int 4. The Target Company has already recognised the land use rights where the Target Company is a lessee.

The application of HKFRS 16 does not have impact on these assets except for the whole balance is now presented as ''Right-of-use assets'' under non-current assets.

Instead of performing an impairment review on the right-of-use assets at the date of initial application, the Target Company has relied on its historic assessment as to whether leases were onerous immediately before the date of initial application of HKFRS 16.

The Target Company has initially applied HKFRS 16 at 1 January 2019 using the modified retrospective approach. On transition, for leases previously accounted for as operating leases with a remaining lease term of less than 12 months and for leases of low-value assets, the Target Company has applied the optional exemptions to not recognise right-of-use assets but to account for the lease expense on a straight-line basis over the remaining lease term.

The Target Company has benefited from the use of hindsight for determining lease term when considering options to extend and terminate leases.

Adjustments recognised in the statements of financial position on 1 January 2019

The change in accounting policy affected the following items in the statements of financial position on 1 January 2019:

• Land use rights - decreased by RMB93,853,000

• Right-of-use assets - increased by RMB93,853,000
• There was no impact on retained earnings as at 1 January 2019

''Financial Instruments'' and HKFRS 15 ''Revenue from Contracts with Customers''

This note explains the impact of the adoption of HKFRS 9 and HKFRS 15 since 1 January 2018 on the Target Company's Historical Financial Information.

The Target Company elects to adopt HKFRS 9 and HKFRS 15 without restating comparative information. However, there is neither reclassification nor adjustment arising from the adoption of HKFRS 9 and HKFRS 15. Details by standards are explained below.

(i) HKFRS 9 ''Financial Instruments''

HKFRS 9 replaces the provisions of HKAS 39 that relate to the recognition, classification and measurement of financial assets and financial liabilities, derecognition of financial instruments, impairment of financial assets and hedge accounting.

The adoption of HKFRS 9 ''Financial Instruments'' from 1 January 2018 resulted in changes in accounting policies to the Historical Financial

Information. The new accounting policies are set out in Note 2.6. In accordance with the transitional provisions in HKFRS 9(7.2.15) and

(7.2.26), comparative figures have not been restated.

(a) Classification and measurement of financial instruments on

adoption of HKFRS 9

The financial assets held by the Target Company include financial instruments previously classified as loans and receivables which continue to be measured at amortised cost under HKFRS 9. Accordingly, there is no impact on the classification and measurement of its financial assets. There will be no impact on the Target

Company's accounting for financial liabilities, as HKFRS 9 only affect the accounting for non-derivative financial liabilities that are designated at fair value through profit or loss (''FVPL'') and the Target Company does not have any of such liabilities. The derecognition rules have been transferred from HKAS 39 and have not been changed.

(b) Impairment of financial assets

The Target Company has three types of financial assets that are subject to HKFRS 9's new expected credit loss (''ECL'') model:

• Trade and tariff adjustment receivables
• Other receivables and amount due from an intermediate holding company
• Cash deposits (including cash at banks, restricted cash and pledged deposits)

The Target Company was required to revise its impairment methodology under HKFRS 9 for each of these classes of assets. There is no impact of the change in impairment methodology on the Target Company's retained earnings and equity.

While cash deposits are also subject to the impairment requirements of HKFRS 9, the identified impairment loss was immaterial.

Trade and tariff adjustment receivables

The Target Company applies the HKFRS 9 simplified approach to measuring ECL which uses a lifetime expected loss allowance for all trade and tariff adjustment receivables. There is no increase in loss allowance for trade and tariff adjustment receivables on 1 January 2018.

Other receivables and amount due from an intermediate holding company

Loss allowance on other receivables and amount due from an intermediate holding company are measured as either 12-months ECL or lifetime ECL, depending on whether there has been a significant increase in credit risk since initial recognition. If a significant increase in credit risk of a receivable has occurred since initial recognition, then loss allowance is measured as lifetime ECL. There is no increase of loss allowance for other receivables and amount due from an intermediate holding company on 1 January 2018.

(ii) HKFRS 15 ''Revenue from Contacts with Customers''

The Target Company has adopted HKFRS 15 from 1 January 2018 which resulted in changes in accounting policies to the Historical Financial Information as set out in Note 2.11.

2.2 Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (''CODM''). The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the directors of the Target Company that makes strategic decisions.

2.3 Property, plant and equipment

Property, plant and equipment (other than construction in progress as described below) is stated at historical cost less accumulated depreciation and accumulated impairment losses, if any. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Target Company and the cost of the item can be measured reliably. All other repairs and maintenance costs are charged to the statements of profit or loss and other comprehensive income during the financial period in which they are incurred.

Depreciation on property, plant and equipment is calculated using the straight-line method to allocate their cost, net of their residual values, over their estimated useful lives, as follows:

Power generating modules and equipment	25 years
Furniture, fixtures and office equipment	5 years
Motor vehicles	5 years

Construction in progress represents property, plant and equipment under construction and pending installation and is stated at cost less accumulated impairment losses, if any. Cost includes the costs of construction of power generating modules and equipment. No provision for depreciation is made on construction in progress until such time as the relevant assets are completed and are available for the intended use. When the assets concerned are brought into use, the costs are transferred to other property, plant and equipment and depreciated in accordance with the policy as stated above.

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.

Gains or losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the statements of profit or loss and other comprehensive income.

2.4 Land use rights

Land use rights (which meet the definition of right-of-use assets upon initial application of HKFRS 16) represent the upfront payment for long-term land lease in which the payment can be reliably measured. Land use rights are recognised as prepayments for operating leases and amortised (before the application of HKFRS 16)/ depreciated (upon the application of HKFRS 16) on a straight-line basis to profit or loss over the lease terms.

2.5 Impairment of non-financial assets

Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events on changes in circumstances indicate that they might be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised as an expense immediately for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs of disposal and value in use. Impairment loss is charged pro rata to the assets in cash-generating unit, except that the carrying amount of an asset will not be reduced below its individual fair value less cost of disposal, or value-in-use, if determinable. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or group assets (cash-generating units). As a result,some assets are tested individually for impairment and some are tested at cash-generating unit level. Non-financial assets that suffered an impairment are reviewed for possible reversal of the impairment at each reporting period.

2.6 Financial assets

Accounting policies from 1 January 2018

(a) Classification

From 1 January 2018, the Target Company classifies its financial assets into financial assets at amortised cost.

The classification depends on the entity's business model for managing the financial assets and the contractual terms of the cash flows.

All income and expenses relating to financial assets that are recognised in profit or loss are presented within finance costs or finance income.

The Target Company reclassifies debt investments when and only when its business model for managing those assets changes.

(b) Recognition and derecognition

Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the Target Company commits to purchase or sell the asset. Financial assets are derecognised when the contractual rights to receive cash flows from the financial assets have expired or have been transferred and the Target Company has transferred substantially all the risks and rewards of ownership.

At initial recognition, the Target Company measures a financial asset at its fair value, in the case of a financial asset not at FVPL, plus transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in the statements of profit or loss and other comprehensive income.

Debt instruments

Subsequent measurement of debt instruments depends on the business

model for managing the financial asset and the cash flow characteristics of

the asset.

Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in the statements of profit or loss and other comprehensive income and presented in other expenses. The Target Company's trade and tariff adjustment receivables (see Note 2.8), other receivables, amount due from an intermediate holding company, pledged deposit, restricted cash, cash and cash equivalents are fall within the category of financial assets at amortised costs.

(d) Impairment

From 1 January 2018, the Target Company assesses on a forward-looking basis the ECL associated with its debt instruments carried at amortised cost.

For trade and tariff adjustment receivables, the Target Company applies the simplified approach permitted by HKFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables, see Note 16 for further details.

Loss allowance on other financial assets are measured as either 12-months ECL or lifetime ECL, depending on whether there has been a significant increase in credit risk since initial recognition. If a significant increase in credit risk of a receivable has occurred since initial recognition, then loss allowance is measured as lifetime ECL.

In assessing whether the credit risk has increased significantly since initial recognition, the Target Company compares the risk of a default occurring on the financial assets at the reporting date with the risk of default occurring on the financial assets at the date of initial recognition. In making this assessment, the Target Company considers both quantitative and qualitative information that is reasonable and supportable, including historical experience and forward-looking information that is available without undue cost or effort.

In particular, the following assessment criteria is taken into account when assessing whether credit risk has increased significantly:

- an actual or expected significant deterioration in the financial instrument's external (if available) or internal credit rating;
- significant deterioration in external market indicators of credit risk, e.g. a significant increase in the credit spread, the credit default swap prices for the debtor;
- existing or forecast adverse changes in business, financial or economic conditions that are expected to cause a significant decrease in the debtor's ability to meet its debt obligations;
- an actual or expected significant deterioration in the operating results of the debtor; and
- an actual or expected significant adverse change in the regulatory, economic, or technological environment of the debtor that results in a significant decrease in the debtor's ability to meet its debt obligations.

Despite the aforegoing, the Target Company assumes that the credit risk on a debt instrument has not increased significantly since initial recognition if the debt instrument is determined to have low credit risk at the end of each reporting period. A debt instrument is determined to have low credit risk if it has a low risk of default, the borrower has strong capacity to meet its contractual cash flow obligations in the near term and adverse changes in economic and business conditions in the longer term may, but will not necessarily, reduce the ability of the borrower to fulfill its contractual cash flow obligations.

For internal credit risk management, the Target Company considers an event of default occurs when information developed internally or obtained from external sources indicates that the debtor is unlikely to pay its creditors, including the Target Company, in full (without taking into account any collaterals held by the Target Company).

Detailed analysis of the ECL assessment of trade and tariff adjustment receivables and other financial assets measured at amortised cost are set out in Note 25.3.

Accounting policies applied until 31 December 2017

The Target Company has applied HKFRS 9 retrospectively, but has elected not to restate comparative information. As a result, the comparative information provided continues to be accounted for in accordance with the Target Company's previous accounting policy (i.e. HKAS 39) as set out below.

Until 31 December 2017, the Target Company classified its financial assets into loans and receivables.

(i) Subsequent measurement

Subsequent to the initial recognition, loans and receivables were subsequently carried at amortised cost using the effective interest method.

(ii) Impairment

The Target Company assessed at the end of each reporting period whether there was objective evidence that a financial asset or group of financial assets was impaired. A financial asset or a group of financial assets was impaired and impairment losses were incurred only if there was objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a 'loss event') and that loss event (or events) had an impact on the estimated future cash flows of the financial asset or group of financial assets that could be reliably estimated.

Assets carried at amortised cost

For loans and receivables, the amount of the loss was measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future credit losses that had not been incurred) discounted at the financial asset's original effective interest rate. The carrying amount of the asset was reduced and the amount of the loss was recognised in statements of profit or loss and other comprehensive income.

If, in a subsequent period, the amount of the impairment loss decreased and the decrease could be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor's credit rating), the reversal of the previously recognised impairment loss was recognised in profit or loss.

2.7 Financial liabilities

(a) Recognition and measurement

The Target Company's financial liabilities include other payables, amounts due to related parties (including amount due to immediate holding company and amounts due to fellow subsidiaries), other borrowings and dividends payable.

Financial liabilities are recognised initially at fair value net of transaction costs incurred and subsequently stated at amortised cost, using effective interest method. Any difference between proceeds net of transaction costs and the redemption value is recognised in the profit or loss over the period of the financial liabilities using the effective interest method.

Financial liabilities are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Borrowings are classified as current liabilities unless the Target Company has an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period.

(b) Derecognition

A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expired. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such exchange or modification is treated as a derecognition of the original liability and a recognition of a new liability, and the difference between the respective carrying amounts is recognised in the profit or loss.

The terms are substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective interest rate, is at least 10 percent different from the discounted present value of the remaining cash flows of the original financial liability.

2.8 Trade and tariff adjustment receivables

Trade and tariff adjustment receivables are amounts due from the sole customer for electricity sold or services performed in the ordinary course of business. If collection is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets.

Trade and tariff adjustment receivables are recognised initially at the amount of consideration that is unconditional unless they contain significant financing components, when they are recognised at fair value. The Target Company holds the trade and tariff adjustment receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method.

2.9 Cash and cash equivalents

In the statements of cash flows, cash and cash equivalents includes cash at bank and on hand and demand deposits with banks.

2.10 Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds.

2.11 Revenue recognition

Accounting policies from 1 January 2018

Revenue is recognised when a performance obligation is satisfied by

transferring control of the promised products or services to a customer in an

amount that reflects the consideration expected to be collected in exchange for

those products or services. The revenue recognition of the Target Company is

determined through the following five steps:

(i) Identification of the contract, or contracts, with a customer;
(ii) Identification of the performance obligations in the contract;
(iii) Determination of the transaction price;

(iv) Allocation of the transaction price to the performance obligation in the contract;

(v) Recognising of revenue when, or as, a performance obligation is satisfied.

At contract inception, an assessment is required to identify a performance obligation for each promise to transfer to the customer a product or a service (or bundle of products or services) that is distinct. To identify the performance obligations, the Target Company considers all the products and services promised in the contract with the customer based on the Target Company's customary business practices, published policies, or specific statements.

Depending on the terms of the contract and the laws that apply to the contract, control of the goods or service may be transferred over time or at a point in time. Control of the goods or service is transferred over time if the Target Company's performance:

• provides all of the benefits received and consumed simultaneously by the customer;
• creates or enhances an asset that the customer controls as the Target Company performs; or
• does not create an asset with an alternative use to the Target Company and the Target Company has an enforceable right to payment for performance completed to date.

If control of the goods or services transfers over time, revenue is recognised over the period of the contract by reference to the progress towards complete satisfaction of that performance obligation. Otherwise, revenue is recognised at a point in time when the customer obtains control of the goods or service.

The Target Company recognises revenue when the specific criteria have been met for each of the Target Company's activities, as described below:

(a) Sales of electricity and tariff adjustment

Revenue from sales of electricity is recognised over time when the electricity generated and transmitted is simultaneously received and consumed by the power grid companies. The Target Company has elected the practical expedient to recognise revenue in the amount to which the Target Company has a right to invoice as the amount represents and corresponds directly with the value of performance completed and transferred to the power grid companies. The

Target Company has no unsatisfied performance obligations at each reporting date.

Tariff adjustment represents subsidy received and receivable from the government authorities in respect of the Target Company's renewable energy projects. Tariff adjustment is recognised overtime at its fair value where there is a reasonable assurance that the additional tariff will be received and the Target Company will comply with all attached conditions, if any. The revenue from tariff adjustment is based on the difference between the feed-in-tariff regime implemented by the PRC government for the provision of subsidy to the solar power plants operators in the PRC and the revenue from sales of electricity.

Variable consideration

For contracts that contain variable consideration, the amount of consideration is estimated to be that which the Target Company will be entitled in exchange for transferring the goods or services to the customer.

The estimated amount of variable consideration is included in the transaction price only to the extent that it is highly probable that such an inclusion will not result in a significant revenue reversal in the future when the uncertainty with the variable consideration is subsequently resolved.

At the end of each reporting period, the Target Company updates the estimated transaction price (including updating its assessment of whether an estimate of variable consideration is constrained) to represent faithfully the circumstances present at the end of each reporting period and the changes in circumstance during each reporting period.

(b) Interest income

Interest income is recognised on a time proportion basis using the effective interest method. For financial assets measured at amortised cost that are not credit-impaired, the effective interest rate is applied to the gross carrying amount of the asset.

Accounting policies applied until 31 December 2017

Revenue is measured at the fair value of the consideration received or receivable, and represents amounts receivable for goods supplied, stated net of value added taxes. The Target Company recognises revenue when the amount of revenue can be reliably measured; when it is probable that future economic benefits will flow to the entity; and when specific criteria have been met for each of the Target Company's activities, as described below.

(a) Sales of electricity

Revenue arising from the sale of electricity is recognised in the accounting period when electricity is generated and transmitted.

(b) Tariff adjustment

Interest income is recognised on a time-proportion basis using the effective interest method.

2.12 Borrowing costs

General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time (generally over 6 months for renewable power projects) to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. All other borrowing costs are recognised in the profit or loss in the period in which they are incurred.

2.13 Current and deferred income tax

The income tax expense or credit for the period is the tax payable on the current period's taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

(a) Current income tax

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the Target Company operates and generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

(b) Deferred income tax

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the Historical Financial Information. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred income tax assets are recognised only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in foreign operations where the Target Company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

2.14 Employee benefits

(a) Short-term obligations

Liabilities for wages and salaries, including non-monetary benefits and accumulating sick leave that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees' services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the statements of financial position.

(b) Post-employment obligations

Employees are required to participate in defined contribution retirement schemes administered and operated by municipal government. The Target Company contribute funds to the retirement scheme to fund the retirement benefits of the employees which are calculated on certain percentage of the average employee salary as agreed by the municipal government. Such retirement schemes are responsible for the entire post-retirement benefit obligations payable to the retired employees. The Target Company has no further obligations for the actual payment of post-retirement benefits beyond the contributions.

Termination benefits are payable when employment is terminated by the Target Company before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. The Target Company recognises termination benefits when the Target Company can no longer withdraw the offer of those benefits. In the case of an offer made to encourage voluntary redundancy, the termination benefits are measured based on the number of employees expected to accept the offer. Benefits falling due more than 12 months after the end of the reporting period are discounted to present value.

2.15 Provisions

Provisions are recognised when the Target Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated. Provisions are not recognised for future operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

2.16 Leases

As explained in Note 2.1(b), the Target Company has changed its accounting policy for leases where the Target Company is the leasee. The new policy is described below and the impact of the change in accounting policy as at 1 January 2019 is set out in Note 2.1(b).

Until 31 December 2018, leases in which a significant portion of the risks and rewards of ownership were not transferred to the Target Company as lessee were classified as operating leases. Payments made under operating leases were charged to profit or loss on a straight-line basis over the period of the lease.

For any new contracts entered into on or after 1 January 2019, the Target Company considers whether a contract is, or contains a lease. A lease is defined as 'a contract, or part of a contract, that conveys the right to use an identified asset (the underlying asset) for a period of time in exchange for consideration'. To apply this definition, the Target Company assesses whether the contract meets three key evaluations which are whether:

• the contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being identified at the time the asset is made available to the Target Company;
• the Target Company has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use, considering its rights within the defined scope of the contract; and
• the Target Company has the right to direct the use of the identified asset throughout the period of use. The Target Company assess whether it has the right to direct 'how and for what purpose' the asset is used throughout the period of use.
The Target Company depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use assets or the end of the lease term unless the Target Company is reasonably certain to obtain ownership at the end of the lease term. The Target Company also assesses the right-of-use assets for impairment when such indicator exists.
From 1 January 2019, the Target Company has elected to account for short-term leases using the practical expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these leases are recognised as an expense in profit or loss on a straight-line basis over the lease term. Short-term leases are leases with a lease term of 12 month or less.

In the Historical Financial Information, right-of-use assets represented the

prepaid lease payments for leasehold land and are presented as ''Land use rights''

under non-current assets.

2.17 Government grants

Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Target Company will comply with all attached conditions.

Government grants relating to costs are deferred and recognised in the statements of profit or loss and other comprehensive income over the period necessary to match them with the costs that they are intended to compensate.

Government grants relating to property, plant and equipment are included in non-current liabilities as deferred government grants and are credited to the statements of profit or loss and other comprehensive income on a straight- line basis over the expected lives of the related assets.

2.18 Related parties

For the purposes of the Historical Financial Information, a party is considered to be related to the Target Company if:

(a) the party, is a person or a close member of that person's family and if that person,
(i) has control or joint control over the Target Company;
- (ii) has significant influence over the Target Company; or
(iii) is a member of the key management personnel of the Target Company or of a parent of the Target Company.
(b) the party is an entity where any of the following conditions applies:
- (i) the entity and the Target Company are members of the same group.
- (ii) one entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member).
- (iii) the entity and the Target Company are joint ventures of the same third party.

(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity.

(v) the entity is a post-employment benefit plan for the benefit of employees of either the Target Company or an entity related to the Target Company.
(vi) the entity is controlled or jointly controlled by a person identified in (a).
(vii) a person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).
(viii) the entity, or any member of a group of which it is a part, provides key management personnel services to the Target Company or to the parent of the Target Company.

Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings with the entity.

3. Critical Accounting Estimates and Judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Target Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

(a) Impairment of trade and tariff adjustment receivables

Until 31 December 2017, the policy for the provision for impairment of trade and tariff adjustment receivables of the Target Company is based on the evaluation of collectability and aging analysis of accounts and on management's judgement. A considerable amount of judgement is required in assessing the ultimate realisation of these receivables, including the current creditworthiness and the past collection history of the debtor. If the financial conditions of the debtor of the Target Company were to deteriorate, resulting in an impairment of their ability to make payments, additional provision for impairment may be required. From 1 January 2018, the Target Company makes provision for impairment of trade and tariff adjustment receivables based onassumptions about risk of default and ECL rate. The Target Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Target Company's past history, existing market conditions as well as forward-looking estimates at the end of each reporting period. Note 25.3 provides the basis of the calculation of the loss allowance. As at 31 December 2017, 2018, 2019 and 31 October 2020, the aggregate carrying amounts of trade and tariff adjustment receivables amounted to RMB120,965,000, RMB228,413,000, RMB428,954,000 and RMB524,102,000, respectively.

(b) Useful lives of property, plant and equipment

The Target Company determines the estimated useful lives and related depreciation charges for its property, plant and equipment. This estimate is based on the historical experience of the actual useful lives of property, plant and equipment of similar nature and functions. It could change significantly as a result of technical innovations and competitor actions in response to severe industry cycles. Management will increase the depreciation charge where useful lives are less than previously estimated lives, or it will write-off or write-down technically obsolete or non-strategic assets that have been abandoned or sold. As at 31 December 2017, 2018, 2019 and 31 October 2020, the carrying amount of property, plant and equipment were RMB2,129,159,000, RMB2,060,608,000, RMB1,978,803,000 and RMB1,909,697,000, respectively.

The Target Company assesses whether there are any indicators of impairment for property, plant and equipment at each reporting date. Property, plant and equipment are tested for impairment when there are indicators that the carrying amounts may not be recoverable. When value-in-use calculations are undertaken, management must estimate the expected future cash flows from the asset or cash generating unit and choose a suitable discount rate in order to calculate the present value of those cash flows. As at 31 December 2017, 2018, 2019 and 31 October 2020, the carrying amount of property, plant and equipment were RMB2,129,159,000, RMB2,060,608,000, RMB1,978,803,000 and RMB1,909,697,000, respectively.

4. Revenue and Segment Information

Revenue represents revenue arising on sales of electricity which is recognised over time. Substantially, all of the revenue is derived from electricity sales to local grid companies in the PRC for the years ended 31 December 2017, 2018, 2019 and ten months ended 31 October 2019 and 2020. Tariff adjustment is recognised as revenue in accordance with the power purchase agreement.

2017	2019
RMB'000	RMB'000	RMB'000

Sales of electricity	43,041	97,333	115,395
Tariff adjustment	54,090	147,796	161,807
97,131	245,129	277,202

Year ended 31 December
2018	2019	2020
RMB'000	RMB'000
(Unaudited)
105,144	115,229
146,369	165,959
251,513	281,188

Ten months ended 31 October

The CODM has been identified as the directors of the Target Company. CODM reviews the Target Company's internal reports in order to assess performance, allocate resources and determine the operating segments.

For the Relevant Periods, CODM considers that the Target Company has one reportable segment which is solar energy segment. No separate segment information was presented for the Relevant Periods.

The Target Company is domiciled in the PRC. All of the Target Company's non-current assets and revenue are located and derived in the PRC during the Relevant Periods respectively.

5. Other Income

Year ended 31 December Ten months ended 31 October

2017

2018

2019

2020

RMB'000

RMB'000 (Unaudited)

RMB'000

Government grant (Note) Compensation income

- -

- 5,230

100 -

- -

100 -

5,230

100

Note: Government grants are provided by the government in respect of the Target Company's effort to facilitate the city development and such grants are unconditional.

APPENDIX IIFINANCIAL INFORMATION OF THE TARGET COMPANY

6. Finance Income
Interest income on bank balances
7. Finance Costs
In relation to other borrowings: - Interest expenses - Loan facilities fee
Total finance costs
8. Profit Before Income Tax

Depreciation: - Owned assets - Right-of-use assetsTotal depreciation Amortisation of land use rights Auditor's remuneration - Audit services - Non-audit services Lease charges:

- Operating lease charges on leased premises
- Short term leases and lease term shorter than 12 months as at initial application of HKFRS 16

Employee benefit expenses (Note 9) Subcontracting charges

RMB'000

2017

Year ended 31 December

2018

Ten months ended 31 October

2019	2019	2020
RMB'000	RMB'000	RMB'000	RMB'000
(Unaudited)
60	219	166	170

RMB'000

2017

- -

Year ended 31 December

2018

Ten months ended 31 October

2019	2019	2020
RMB'000	RMB'000	RMB'000	RMB'000
(Unaudited)
-	97,788	80,818	84,830
-	7,959	6,633	6,633
-	105,747	87,451	91,463

RMB'000

34,283 -

34,283 1,860

- 737 5,660

2017

- -

Year ended 31 December
2018	2019	2020
RMB'000	RMB'000
(Unaudited)
69,004	68,985
3,139	3,245
72,143	72,230
-	-
-	200
-	80
-	-
32	34
1,401	-
-	9,434

2019

RMB'000

82,406 82,805

- 3,787

82,406 86,592

Ten months ended 31 October

3,680

- -

50 -

- 1,493 7,547

32 1,627 943

9. Employees Benefit Expenses (Including Directors' Emoluments)

RMB'000

Salaries, wages and bonuses

Retirement benefit scheme contributions

2017 2019

Year ended 31 December
2018	2019	2020
RMB'000	RMB'000
(Unaudited)
1,152	-
249	-
1,401	-

Ten months ended 31 October

RMB'000

662 75

1,247 1,279

246 348

737 1,493 1,627

10. Directors' Emoluments and Five Highest Paid Individuals
10.1 Directors' emoluments

No emolument was paid or payable to the directors of the Target Company during the Relevant Periods.

During the Relevant Periods, there was no amount paid or payable by the Target Company to the directors as an inducement to join or upon joining the Target Company and as compensation for the loss of office. There was no arrangement under which any director or five highest paid individuals waived or agreed to waive any remuneration during the Relevant Periods.

10.2 Five highest paid individuals

The five highest paid individuals in the Target Company during the Relevant Periods did not include any director. The emoluments of these five highest individuals for the Relevant Periods are set out below:

Year ended 31 December Ten months ended 31 October

2017

2018

2019

2020

RMB'000

RMB'000 (Unaudited)

RMB'000

Salaries and bonuses Retirement benefit scheme contributions

390 90

380 103

345 121

313 111

- -

480

483

466

424

Their emoluments were within the band of HK$Nil to HK$1,000,000.

11. Income Tax Expense

The Target Company's operations in the PRC are subject to the corporate income tax law of the PRC (the ''PRC Corporate Income Tax''). The standard PRC Corporate Income Tax rate is 25% under the law of the PRC on Enterprise Income Tax (the ''EIT Law''). Pursuant to CaiShui 2008 No. 46 Notice on the Execution of the Catalogue of Public Infrastructure Projects Entitled for Preferential Tax Treatment*（財政部、國家稅務總局關於執行公共基礎設施項目企業所得稅優惠目錄有關問題的通知）, the Target Company has been approved to entitle to a tax holiday of a 3-year full exemption followed by a 3-year 50% exemption commencing from their respective years in which their first operating income is derived.

2017 2019

RMB'000

Current tax - PRC enterprise income tax

Year ended 31 December
2018	2019	2020
RMB'000	RMB'000
(Unaudited)
-	5,528

Ten months ended 31 October

RMB'000

Reconciliation between tax expense and accounting profit at applicable tax rate are as follows:

2017 2019

RMB'000

Profit before income tax

47,517

Tax on profit before income tax, calculated at the rate of 25% Tax effect of PRC tax concession Tax effect of non-taxable income

11,879 (11,879)

Income tax expense

Year ended 31 December
2018	2019	2020
RMB'000	RMB'000
(Unaudited)
63,561	77,995
15,890	19,499
(15,452)	(13,415)
(438)	(556)
-	5,528

Ten months ended 31 October

RMB'000

146,489 47,089

36,622 11,772

(36,622)

(11,248)

(524)

12. Dividends

Final dividend of RMB3.56 cents per ordinary share

Interim dividend of RMB15.81 cents per ordinary share

2017	2019
RMB'000	RMB'000	RMB'000

-	42,764	-
-	-	-
-	42,764	-
II - 36

Year ended 31 December
2018	2019	2020
RMB'000	RMB'000
(Unaudited)
-	-
-	189,766
-	189,766

Ten months ended 31 October

APPENDIX IIFINANCIAL INFORMATION OF THE TARGET COMPANY

No dividends were paid, declared or proposed during the years ended 31 December 2017, 2019 and ten months ended 31 October 2019, nor has any dividend been proposed subsequent to 31 October 2020.

13.

Property, Plant and Equipment

Power	Furniture,
generating	fixtures and
modules and	Motor	office	Construction
equipment	vehicles	equipment	in progress	Total
RMB'000	RMB'000	RMB'000	RMB'000	RMB'000
At 1 January 2017
Cost	-	181	83	1,772,203	1,772,467
Accumulated depreciation	-	(47)	(18)	-	(65)
Net book amount	-	134	65	1,772,203	1,772,402
Year ended 31 December 2017
Opening net book amount	-	134	65	1,772,203	1,772,402
Additions	-	99	-	390,941	391,040
Depreciation charge	(34,233)	(34)	(16)	-	(34,283)
Transfer	2,163,144	-	-	(2,163,144)	-
Closing net book amount	2,128,911	199	49	-	2,129,159
At 31 December 2017 and 1 January 2018
Cost	2,163,144	280	83	-	2,163,507
Accumulated depreciation	(34,233)	(81)	(34)	-	(34,348)
Net book amount	2,128,911	199	49	-	2,129,159
Year ended 31 December 2018
Opening net book amount	2,128,911	199	49	-	2,129,159
Additions	-	100	-	13,838	13,938
Disposals	-	(83)	-	-	(83)
Depreciation charge	(82,348)	(42)	(16)	-	(82,406)
Transfer	13,838	-	-	(13,838)	-
Closing net book amount	2,060,401	174	33	-	2,060,608
At 31 December 2018 and 1 January 2019
Cost	2,176,982	199	83	-	2,177,264
Accumulated depreciation	(116,581)	(25)	(50)	-	(116,656)
Net book amount	2,060,401	174	33	-	2,060,608
II - 37
Power	Furniture,
generating	fixtures and
modules and	Motor	office	Construction
equipment	vehicles	equipment	in progress	Total
RMB'000	RMB'000	RMB'000	RMB'000	RMB'000
Year ended 31 December 2019
Opening net book amount	2,060,401	174	33	-	2,060,608
Additions	-	-	-	1,000	1,000
Depreciation charge	(82,751)	(38)	(16)	-	(82,805)
Transfer	1,000	-	-	(1,000)	-
Closing net book amount	1,978,650	136	17	-	1,978,803
At 31 December 2019 and 1 January 2020
Cost	2,177,982	199	83	-	2,178,264
Accumulated depreciation	(199,332)	(63)	(66)	-	(199,461)
Net book amount	1,978,650	136	17	-	1,978,803
Ten months ended 31 October 2020
Opening net book amount	1,978,650	136	17	-	1,978,803
Disposals	-	(121)	-	-	(121)
Depreciation charge	(68,960)	(15)	(10)	-	(68,985)
Closing net book amount	1,909,690	-	7	-	1,909,697
At 31 October 2020
Cost	2,177,982	-	83	-	2,178,065
Accumulated depreciation	(268,292)	-	(76)	-	(268,368)
Net book amount	1,909,690	-	7	-	1,909,697

As at 31 December 2018, 2019 and 31 October 2020, property, plant and equipment of approximately RMB2,060,401,000, RMB1,978,650,000 and RMB1,909,690,000, respectively, were pledged as security for the Target Company's other borrowings of approximately RMB1,554,491,000, RMB1,554,450,000 and RMB1,410,083,000, respectively.

APPENDIX IIFINANCIAL INFORMATION OF THE TARGET COMPANY

14.

Land Use Rights
RMB'000
At 1 January 2017
Cost	29,925
Accumulated amortisation	(2,926)
Net book amount	26,999
Year ended 31 December 2017
Opening net book amount	26,999
Additions	72,394
Amortisation	(1,860)
Closing net book amount	97,533
At 31 December 2017 and 1 January 2018
Cost	102,319
Accumulated amortisation	(4,786)
Net book amount	97,533
Year ended 31 December 2018
Opening net book amount	97,533
Amortisation	(3,680)
Closing net book amount	93,853
At 31 December 2018
Cost	102,319
Accumulated amortisation	(8,466)
Net book amount	93,853
Transfer to right-of-use assets upon initial application of
HKFRS 16 (Notes 2.1(a) & 15)	(93,853)
At 31 December 2019, 1 January 2020 and 31 October 2020	-

15. Right-of-use Assets

The Target Company's right-of-use assets mainly arise from lease of land use rights for solar power plant projects with typically lease term of 30 to 49 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants.

The movements of right-of-use assets are analysed as follows:

Ten months

Year ended	ended
31 December	31 October
2019	2020
RMB'000	RMB'000
Transfer from land use rights upon initial
application of HKFRS16/At the beginning of
the period	93,853	95,401
Additions	5,335	-
Depreciation	(3,787)	(3,245)
At the end of the year/period	95,401	92,156

During the year ended 31 December 2019, ten months ended 31 October 2019 and 2020, the total cash outflows for the leases are RMB2,867,000, RMB2,867,000 (unaudited) and RMB34,000, respectively.

16. Trade and Tariff Adjustment Receivables

As at
As at 31 December	31 October
2017	2018	2019	2020
RMB'000	RMB'000	RMB'000	RMB'000
Trade receivables	53,421	8,330	6,068	15,076
Tariff adjustment receivables	67,544	220,083	422,886	509,026
120,965	228,413	428,954	524,102

As at 31 December 2017, 2018, 2019 and 31 October 2020, trade receivables of approximately RMB53,421,000, RMB8,330,000, RMB6,068,000 and RMB15,076,000, respectively, represented receivables from sales of electricity and are usually settled within three months.

Tariff adjustment receivables mainly represented the central government subsidies on renewable energy projects to be received from the State Grid Shaanxi Electric Power Company based on the respective electricity sale and purchase agreements of the Target Company's solar power plants and prevailing nationwide government policies.

The directors of the Target Company consider that the loss allowance/ECL for trade and tariff adjustment receivables is insignificant as at 31 December 2017, 2018, 2019 and 31 October 2020. Note 25.3 provides details about the allowances.

The ageing analysis by invoice date, which approximates revenue recognition date, of trade and tariff adjustment receivables was as follows:

As at
As at 31 December	31 October
2017	2018	2019	2020
RMB'000	RMB'000	RMB'000	RMB'000
Unbilled (Note)	67,544	220,083	422,886	509,026
1-30 days	6,065	6,111	5,622	14,094
31-60 days	5,513	2,219	446	982
61-90 days	3,687	-	-	-
91-180 days	35,217	-	-	-
181-365 days	2,939	-	-	-
120,965	228,413	428,954	524,102

Note: As at 31 December 2017, 2018, 2019 and 31 October 2020, the amount represents unbilled tariff adjustment receivables. The aged analysis of the unbilled trade receivables, which is based on revenue recognition date, are as follows:

As at
As at 31 December	31 October
2017	2018	2019	2020
RMB'000	RMB'000	RMB'000	RMB'000
1-30 days	7,622	8,536	8,137	21,388
31-60 days	6,927	7,169	9,307	19,596
61-90 days	4,634	14,894	17,171	17,017
91-180 days	44,257	39,331	47,544	60,161
181-365 days	4,104	82,609	120,644	86,816
1-2 years	-	67,544	152,539	201,064
2-5 years	-	-	67,544	102,984
67,544	220,083	422,886	509,026

The maximum exposure to credit risk at the reporting date was the carrying value of trade and tariff adjustment receivables. Trade and tariff adjustment receivables are denominated in RMB.

As at 31 December 2018, 2019 and 31 October 2020, trade and tariff adjustment receivables of approximately RMB228,413,000, RMB428,954,000 and RMB524,102,000, respectively, were pledged as security for the Target Company's other borrowings of approximately RMB1,554,491,000, RMB1,554,450,000 and RMB1,410,083,000, respectively.

Pursuant to Caijian 2012 No. 102 Notice on the Interim Measures for Administration of Subsidy Funds for Tariff Premium of Renewable Energy（可再生能源電價附加補助資金管理暫行辦法）jointly issued by the Ministry of Finance, the National Development and Reform Commission and the National Energy Administration in March 2012, tariff adjustment receivables will be settled upon successful registration in the Renewable Energy Tariff Subsidy Catalogue (''Catalogue''). Caijian 2013 No.390 Notice issued in July 2013 further simplified the procedures of settlement of the tariff adjustment.

Pursuant to Guo Neng Xin Neng 2015 No. 73 Notice on the Implementation plan for photovoltaic power generation construction（光伏發電建設實施方案）issued by the National

Energy Administration in March 2015, the approval process for solar power plant projects was delegated to the local government level from the Central Government. Such projects require only regional filings with regional power authorities authorised to administer the application process. Once the application has been submitted and approved, the local grid companies will install grid-connections and such projects will be eligible for tariff adjustment. The Target Company's grid-connections were installed in July 2017 and therefore eligible for tariff adjustment.

In January 2020, Ministry of Finance, the National Development and Reform Commission and the National Energy Administration jointly issued Caijian 2020 No.5

Notice on the Measures for Administration of Funds for Tariff Premium of Renewable

Energy（可再生能源電價附加補助資金管理辦法）. Pursuant to Caijian 2020 No.5 Notice, the Central Government will no longer approve and publish the Catalogue. On the other hand, the procedures for settlement of tariff adjustment is intended to be further simplified whereby it is indicated in Caibanjian 2020 No.6 Office of Ministry of Finance's Procedures in relation to Commencement of Approval Procedures of Renewable Energy Tariff Subsidy Project Lis（t 財政部辦公廳關於開展可再生能源發電補貼項目清單審核有關工作的通知） that all qualified renewable energy power plants（存量項目）(the ''Qualified Power Plants'')

which fulfil certain requirements are eligible to be enlisted to the Tariff Subsidy Project List (the ''List'') （補貼項目清單）. The Qualified Power Plants include all 1st to 7th batch

Catalogue power plants, which will be automatically enlisted in the List. The Target Company's solar power plants are successfully enlisted on the second batch of the List.

The directors of the Target Company are of the opinion that the tariff adjustment receivables will be settled in accordance with prevailing government policies and prevalent payment trends of Ministry of Finance. The tariff adjustment receivables are recoverable by considering the background of the sole customer is a state-owned enterprise and such tariff adjustment is only subject to timing of allocation of funds by the PRC government.

The Ministry of Finance does not set out a rigid timetable for the settlement of tariff adjustment receivables. However, given the collection of tariff adjustment receivables is well supported by the government policy, all tariff adjustment receivables were expected to be recoverable. As the collection of tariff adjustment receivables is expected in the normal operating cycle of the business, they are classified as current assets.

Consequently, no loss allowance/ECL of trade receivables was recognised as at 31

December 2017, 2018, 2019 and 31 October 2020.

As of 31 December 2017, 2018, 2019 and 31 October 2020, all trade receivables were expected to be recoverable. The carrying amounts of trade receivables approximate their fair values.

17. Prepayments and Other Receivables

As at
As at 31 December	31 October
2017	2018	2019	2020
RMB'000	RMB'000	RMB'000	RMB'000
Prepayments	15	2,167	20,396	2,854
Value-added tax recoverable	81,541	236,305	181,575	145,964
Other receivables	565	602	562	517
Staff advances	5,737	5,692	5,681	-
87,858	244,766	208,214	149,335

The directors of the Target Company consider that the fair values of prepayments and other receivables which are expected to be recovered within one year are not materially different from their carrying amounts because these balances have short maturity periods on their inception.

APPENDIX IIFINANCIAL INFORMATION OF THE TARGET COMPANY

18. Cash Deposits
Non-current
Pledged deposit (note (b))
Current
Restricted cash (note (c)) Cash and cash equivalents
2017
RMB'000
As at 31 December 2018
As at
2019
31 October 2020
RMB'000
RMB'000
RMB'000
-
143,741
143,741 143,741
- 7 7
- 81,246 81,246
58,512 52,792
6,659 555
65,171 53,347
Notes:
- (a) The Target Company's bank balances were deposited with banks or a financial institution in the PRC.
  The remittance of these funds out of the PRC is subject to the rules and regulations of foreign exchange control promulgated by the PRC government.
- (b) Pledged deposit represented deposit pledged to a financial institution to secure financing facility granted to the Target Company (Note 20). Deposit was pledged to secure long-term borrowings granted to the Target Company which are due after one year, and therefore classified as non-current assets.
- (c) Restricted cash represented bank balance restricted for financing facility of the Target Company. The deposit will be released upon fulfillment of such requirement.
19. Other Payables

As at

2017

RMB'000

As at 31 December 2018

2019

31 October 2020

RMB'000

Other payables Construction costs payable Other payables and accruals Interest payable

1,295,283 699 -

64,569 772 -

65,821 67,026

516 750

- 8,098

1,295,982

65,341

66,337 75,874

APPENDIX IIFINANCIAL INFORMATION OF THE TARGET COMPANY

20.

Other Borrowings

As at
As at 31 December	31 October
2017	2018	2019	2020
RMB'000	RMB'000	RMB'000	RMB'000
Loan from a financial institution, secured	-	1,650,000	1,642,000	1,491,000
Less: Unamortised loan facilities fees	-	(95,509)	(87,550)	(80,917)
-	1,554,491	1,554,450	1,410,083
Classified as:
Current portion	-	41	41	41
Non-current portion	-	1,554,450	1,554,409	1,410,042
-	1,554,491	1,554,450	1,410,083

As at 31 December 2017, 2018, 2019 and 31 October 2020, the Target Company's borrowings were repayable as follows:

As at
As at 31 December	31 October
2017	2018	2019	2020
RMB'000	RMB'000	RMB'000	RMB'000
Within 1 year	-	8,000	8,000	8,000
Between 1 and 2 years	-	8,000	8,000	8,750
Between 2 and 5 years	-	346,000	522,000	508,250
Over 5 years	-	1,288,000	1,104,000	966,000
-	1,650,000	1,642,000	1,491,000

The borrowing carries an effective interest rate of 8.17%, 8.17% and 8.22% per annum during the years ended 31 December 2018 and 2019 and ten months ended 31 October 2020, respectively, and repayable by quarterly instalments till 2030. As at 31 December 2018, 2019 and 31 October 2020, the borrowings were secured by (i) certain of the Target Company's property, plant and equipment; (ii) the trade and tariff adjustment receivables; and (iii) the pledged deposit, as set out in Note 22 to the Historical Financial Information, and guaranteed by a connected company of the Target Company's ultimate holding company. The guarantee fees for the year ended 31 December 2019 and ten months ended

31 October 2020 were RMB17,123,000 and RMB15,125,000, respectively.
21. Share Capital
As at
2017
As at 31 December 2018
2019
31 October 2020
RMB'000
RMB'000
RMB'000
RMB'000
Registered and paid up capital
1,200,000
1,200,000
1,200,000
1,200,000
22. Pledge of Assets
The Target Company's other borrowings had been secured by the pledge of its assets and the carrying amounts of the respective assets are as follows:

As at

2017

As at 31 December 2018

2019

31 October 2020

RMB'000

Property, plant and equipment

Trade and tariff adjustment receivables Pledged deposit

- - -

2,060,401 228,413 143,741

1,978,650

1,909,690

428,954 524,102

143,741 143,741

2,432,555

2,551,345

2,577,533

23. Related Party Transactions (a) Names and relationships with related parties

Related parties are those parties that have the ability to control, jointly control or exert significant influence over the other party in holding power over the investee; exposure, or rights, to variable returns from its involvement with the investee; and the ability to use its power over the investee to affect the amount of the investor's returns. Parties are also considered to be related if they are subject to common control or joint control.

The following companies are related parties of the Target Company that had balances and/or transactions with the Target Company during the Relevant Periods.

Name of related parties	Relationship with the Target Company
江山豐融	Immediate holding company
江山永泰投資控股有限公司	Intermediate holding company
(''江山永泰'')
北京鑫泰綠能科技有限公司	Controlled and beneficially owned by the
(''北京鑫泰'')	ultimate holding company
陝西億潤新能源科技有限	Controlled and beneficially owned by the
公司 (''陝西億潤'')	ultimate holding company
江山新能源投資(揚州)有限	Controlled and beneficially owned by the
公司 (''江山新能源投資'')	ultimate holding company
江山新能源貿易(揚州)有限	Controlled and beneficially owned by the
公司(''江山新能源貿易'')	ultimate holding company

(b) Significant related parties transactions

In addition to those disclosed elsewhere in the Historical Financial Information, the following is a summary of the significant transactions carried out between the Target Company and its related parties in the ordinary course of business during the Relevant Periods.

For the year ended 31 December 2017

RMB'000

江山永泰北京鑫泰

Procurement of maintenance services 3,774

Procurement of maintenance services 1,887

For the year ended 31 December 2018

RMB'000

江山永泰

Procurement of maintenance services

7,548

For the year ended 31 December 2019

RMB'000

江山永泰北京鑫泰

Service fee

Procurement of maintenance services

4,155 943

For the ten months ended 31 October 2020

RMB'000

江山永泰	Service fee	3,462
北京鑫泰	Procurement of maintenance services	9,434
陝西億潤	Procurement of maintenance services	1,698
RMB'000
3,462

For the ten months ended 31 October 2019 (unaudited)

江山永泰

Service fee

Amount due from an intermediate holding company

The amount due from 江山永泰 is unsecured, interest-free and repayable on demand.

Amount due to immediate holding company

The amount due to 江山豐融 is unsecured, interest-free and repayable on demand.

Amounts due to fellow subsidiaries

As at
As at 31 December	31 October
2017	2018	2019	2020
RMB'000	RMB'000	RMB'000	RMB'000
江山新能源投資	37,094	34,784	21,202	24,812
江山新能源貿易	-	-	2,703	2,703
北京鑫泰	-	-	943	10,717
陝西億潤	-	-	-	1,577
37,094	34,784	24,848	39,809

The amounts due are unsecured, interest-free and repayable on demand.

APPENDIX IIFINANCIAL INFORMATION OF THE TARGET COMPANY

24.

Reconciliation of Liabilities Arising from Financing Activities

The changes in the Target Company's liabilities arising from financing activities canbe classified as follows:

Amount due
to immediate	Amounts due
holding	to fellow	Other
company	subsidiaries	borrowings	Total
RMB'000	RMB'000	RMB'000	RMB'000
As at 1 January 2017, 31 December
2017 and 1 January 2018	5,000	37,094	-	42,094
Cash flows
- Proceeds	-	260,051	1,554,491	1,814,542
- Repayment	-	(262,361)	-	(262,361)
Non-cash change
- Dividend payable	42,764	-	-	42,764
As at 31 December 2018 and
1 January 2019	47,764	34,784	1,554,491	1,637,039
Cash flows
- Proceeds	-	29,353	-	29,353
- Repayment	-	(39,289)	(8,000)	(47,289)
- Interest paid	-	-	(97,788)	(97,788)
Non-cash change
- Finance costs	-	-	105,747	105,747
As at 31 December 2019 and
1 January 2020	47,764	24,848	1,554,450	1,627,062
Cash flows
- Proceeds	-	15,082	-	15,082
- Repayment	-	(121)	(151,000)	(151,121)
- Interest paid	-	-	(76,732)	(76,732)
Non-cash changes
- Finance costs	-	-	91,463	91,463
- Dividend payable	189,766	-	-	189,766
- Interest payable	-	-	(8,098)	(8,098)
As at 31 October 2020	237,530	39,809	1,410,083	1,687,422
II - 49

Amount due

to immediate	Amounts due
holding	to fellow	Other
company	subsidiaries	borrowings	Total
RMB'000	RMB'000	RMB'000	RMB'000
As at 31 December 2018 and
1 January 2019	47,764	34,784	1,554,491	1,637,039
Cash flows
- Proceeds	-	26,810	-	26,810
- Repayment	-	(39,289)	(6,000)	(45,289)
- Interest paid	-	-	(72,335)	(72,335)
Non-cash changes
- Finance costs	-	-	87,451	87,451
- Interest payable	-	-	(8,484)	(8,484)
As at 31 October 2019 (Unaudited)	47,764	22,305	1,555,123	1,625,192

25. Financial Risk Management and Fair Value Measurements

The Target Company's activities expose it to a variety of financial risks: market risk (including interest rate risk), credit risk and liquidity risk. The Target Company's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Target Company's financial performance. Risk management is carried out by the senior management of the Target Company under policies approved by the Board of Directors of the Target Company.

25.1 Categories of financial assets and liabilities

The carrying amounts presented in the statements of financial position relate to the following categories of financial assets and financial liabilities:

As at

2017

As at 31 December 2018

2019

31 October 2020

RMB'000

Financial assets Loans and receivables

- Trade and tariff adjustment receivables
- Other receivables
- Amount due from intermediate holding company
- Cash deposits

120,965 6,302 150,071 7

- - - -

Financial assets at amortised cost

- Trade and tariff adjustment receivables
- Other receivables
- -
- Amount due from an intermediate holding company
- Cash deposits

- -

277,345

228,413 6,294 198,495 224,987 658,189

428,954 6,243

524,102 517

171,446 172,859

208,912 197,088

815,555 894,566

Financial liabilities

Financial liabilities at amortised cost

- Other payables
- Other borrowings
1,295,840 -
64,906 1,554,491
66,120 75,423 1,554,450 1,410,083
- Amount due to immediate holding company
- Amounts due to fellow subsidiaries

5,000 37,094

47,764 34,784

47,764 237,530

24,848 39,809

1,337,934

1,701,945

1,693,182

1,762,845

25.2 Interest rate risk

The Target Company does not anticipate significant impact to cash and cash equivalents because the interest rates of cash deposits (including pledged deposit, restricted cash and cash and cash equivalents) are not expected to change significantly.

The Target Company is exposed to interest rate risk through the impact of rates changes on interest-bearing borrowings which bear floating interest rates.

The Target Company monitors closely its interest rate exposure by maintaining an appropriate mix of fixed and floating rate borrowings and considers hedging significant interest rate exposure should the need arise. The position is regularly monitored and evaluated by reference of anticipated changes in market interest rate.

Based on the balance of its interest-bearing borrowings as at 31 December 2017, 2018, 2019 and 31 October 2020, it is estimated that should there be a general increase/decrease of 50 basis points in lending rates of the People's Bank of China with all other variables being held constant, this would have the effect of decreasing/ increasing on profit before income tax for the years ended 31 December 2017, 2018, 2019 and ten months ended 31 October 2020 by approximately RMBNil, RMB7,772,000, RMB7,772,000 and RMB7,050,000 respectively.

The changes in interests rates do not affect the Target Company's other components of equity. The above sensitivity analysis is prepared based on the assumption that the borrowings as at 31 December 2017, 2018, 2019 and 31 October 2020 existed throughout the respective reporting periods.

25.3 Credit risk

Credit risk arises if a customer or other counterparty fails to meet its contractual obligations. The credit risk of the Target Company mainly arises from trade and tariff adjustment receivables, other receivables, amount due from an intermediate holding company and cash deposits.

As at 31 December 2017, 2018, 2019 and 31 October 2020, the Target Company has concentration of credit risk as 100% of its trade and tariff adjustment receivables were due from its sole customer, which was a state-owned enterprise. Considering the track record of regular settlement of trade receivables and based on the Target Company's experience with respect to the collection of trade and tariff adjustment receivables, which are well supported by the government policy, the directors of the Target Company are of the opinion that the risk of default by the sole customer is not significant.

The Target Company has policies that limit the amount of credit exposure to any financial institutions. Substantially all the deposits are held in reputable financial institutions located in the PRC, which management believes are of high credit quality and management does not expect any losses arising from non-performance by these counterparties.

Impairment of Financial Assets

Until 31 December 2017, management of the Target Company has a credit policy in place and the exposures to these credit risks are monitored on an ongoing basis. The Target Company performs an ongoing individual credit evaluation of its sole customer's financial condition.

From 1 January 2018, the Target Company has three types of assets that are subject to the ECL model:

• Trade and tariff adjustment receivables
• Other receivables and amount due from an intermediate holding company
• Cash deposits (including cash at banks, restricted cash and pledged deposits)

(i) Trade and tariff adjustment receivables

The trade and tariff adjustment receivables of the Target Company were arising from sales of electricity and were all due from a state-owned enterprise. As described in note 16, the Target Company's solar power plants are eligible for tariff adjustment since July 2017 and are successfully enlisted on the second batch of the List. The directors of the Target Company are of the opinion that the tariff adjustment receivables will be settled in accordance with prevailing government policies and prevalent payment trends of Ministry of Finance. There is no due date for settlement. Given the track record of regular settlement of receivables from sales of electricity and the collection of tariff adjustment receivables are well supported by the government policy, the directors of the Target Company are of the opinion that the risk of default by the sole customer is not significant and does not expect any losses from non-performance by the sole customer. Therefore, ECL rate of trade and tariff adjustment receivables are assessed to be close to zero and no provision was made as at the end of each reporting period.

(ii) Other receivables and amount due from an intermediate holding company

Impairment loss of other receivables and amount due from an intermediate holding company are measured as either 12-months ECL or lifetime ECL on individual basis, depending on whether there has been a significant increase in credit risk since initial recognition. If a significant increase in credit risk of a receivable has occurred since initial recognition, then impairment loss is measured as lifetime ECL.

The Target Company's management considers that its credit risk on these other receivables and amount due from an intermediate holding company has not increased significantly since initial recognition as the risk of default is low after considering (i) the assessment criteria as set out in note 2.6(d); and (ii) the strong financial background of the intermediate holding company and its historical default rate, adjusted by current and forward-looking information. Thus, the impairment provision is determined based on the 12-ECL which is close to zero.

(iii) Cash deposits (including cash at banks, restricted cash and pledged deposits)

The credit risks on cash at banks, restricted cash and pledged deposits are limited because the counterparties are reputable banks and financial institutions with high credit ratings assigned by international credit rating agencies in the PRC. Therefore, ECL rate of cash at banks, restricted cash and pledged deposits is assessed to be close to zero and no provision was made as at the end of each reporting period.

25.4 Liquidity risk

Cash flow forecasts are prepared by the Target Company's management. The Target Company's management monitors rolling forecasts on the liquidity requirements to ensure the Target Company maintains sufficient liquidity reserve to support sustainability and growth of the Target Company's business. Currently, the Target Company finances its working capital requirements through funds generated from operations and obtaining other borrowings.

The Target Company's management monitors rolling forecasts of the Target Company's liquidity reserve on the basis of expected cash flows. The Target Company's policy is to regularly monitor current and expected liquidity requirements and its compliance with lending covenants, to ensure that it maintains sufficient reserves of cash and adequate committed lines of funding from major financial institutions to meet its liquidity requirements in the short and long term.

The table below analyses the Target Company's financial liabilities into relevant maturity groupings based on the remaining period at the end of the reporting period to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

Effective interest rate %

Less than 1 year or repayable on Between 1 and Between 2 anddemand RMB'000

2 years RMB'000

5 years RMB'000

More than 5 years RMB'000

Total undiscounted cash flows RMB'000

Total carrying amount RMB'000

At 31 December 2017

Other payables

Amount due to immediate holding company Amounts due to fellow subsidiaries

- - -

1,295,840

5,000

37,094

- - -

1,295,840

5,000 5,000

37,094 37,094

1,337,934

At 31 December 2018

Other payables

Other borrowings

- 8.17%

Amount due to immediate holding company Amounts due to fellow subsidiaries

- -

64,906 100,253 47,764 34,784

- 104,285

- 615,605

- 1,561,872

64,906

2,382,015 1,554,491

- -

47,764 47,764

34,784 34,784

247,707

104,285

615,605

1,561,872

2,529,469

1,701,945

At 31 December 2019

Other payables

Other borrowings

- 8.17%

66,120 104,285

- 103,553

- 767,663

- 1,306,261

66,120

2,281,762 1,554,450

Amount due to immediate holding company Amounts due to fellow subsidiaries

- -

47,764

47,764 47,764

24,848 243,017

- 103,553

- 767,663

- 1,306,261

24,848 24,848

2,420,494

1,693,182

At 31 October 2020

Other payables Other borrowings

- 8.22%

Amount due to immediate holding company Amounts due to fellow subsidiaries

- -

75,423 91,750 237,530 39,809

- 98,913

- 730,956

- 1,121,746

75,423

2,043,365 1,410,083

- -

237,530 237,530

39,809 39,809

444,512

98,913

730,956

1,121,746

2,396,117

1,762,845

25.5 Fair values

All other current financial instruments are carried at amounts not materially different from their fair values as at 31 December 2017, 2018, 2019 and 31 October 2020.

26. Capital Management

The Target Company's capital management objectives are to ensure the Target Company's ability to continue as a going concern and to provide an adequate return to shareholders and benefits for other stakeholders and to maintain an optimal capital structure to enhance shareholders' value in the long term.

The Target Company actively and regularly reviews its capital structure and makes adjustments in light of changes in economic conditions. As part of this review, the directors of the Target Company consider cost of capital and the risks associated with the issued share capital. The Target Company may adjust the amount of dividends paid to shareholders, issue new shares, return capital to shareholders, raise new debt financing or sell assets to reduce debt.

27. Event After the Reporting Periods

There was no significant event after the reporting periods that had a material impact on this report.

III. SUBSEQUENT FINANCIAL STATEMENTS

No audited financial statements have been prepared by the Target Company in respect of any period subsequent to 31 October 2020 and up to the date of this report.

(A) UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

The following is the illustrative unaudited pro forma consolidated statement of assets and liabilities of the Enlarged Group (''Unaudited Pro Forma Financial Information''), being Beijing Energy International Holding Co., Ltd. (the ''Company'') and its subsidiaries (collectively referred to as the ''Group'') together with its interests in Yulin City Jiangshan Yongchen New Energy Limited (the ''Target Company''), which has been prepared by the directors of the Company to illustrate the financial impacts of the proposed acquisition of 100% equity interests in the Target Company (the ''Acquisition'') on the assets and liabilities of the Enlarged Group as if the Acquisition had been completed on 30 June 2020. Upon completion of the Acquisition, the Group will own as to 100% equity interests in the Target Company.

The Unaudited Pro Forma Financial Information has been prepared by the directors of the Company in accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the ''Listing Rules'') and with reference to Accounting Guideline 7 ''Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars'' (''AG7'') issued by the Hong Kong Institute of Certified Public Accountants, for the purpose of illustrating the effect of the Acquisition for inclusion in this circular (the ''Circular'').

The preparation of the Unaudited Pro Forma Financial Information of the Enlarged Group is based on (a) the unaudited consolidated statement of financial position of the Group as at 30 June 2020 which has been extracted from the published interim report of the Company for the six months ended 30 June 2020; (b) the audited statement of financial position of the Target Company as at 31 October 2020 extracted from the accountants' reports as set out in Appendix II to this Circular, after making pro forma adjustments relating to the Acquisition as explained in the notes below that are (i) directly attributable to the Acquisition and not relating to future events or decisions; and (ii) factually supportable, as if the Acquisition had been completed on 30 June 2020. The accounting policies of the Target Company are stated in the accountants' reports as set out in Appendix II of this Circular and such policies are consistent with the accounting policies of the Group.

The Unaudited Pro Forma Financial Information has been prepared for illustrative purposes only and, because of its hypothetical nature, it may not give a true picture of the financial position or results of the Enlarged Group had the Acquisition been completed as at 30 June 2020 or any future date.

The Unaudited Pro Forma Financial Information should be read in conjunction with the historical financial information of the Group as set out in the published interim report of the Company for the six months ended 30 June 2020 and other financial information included elsewhere in this Circular.

APPENDIX III

UNAUDITED PRO FORMA

(I)UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES OF THE ENLARGED GROUP

Unaudited consolidated statement of assets and liabilities of the Group as at 30

June 2020

Pro forma adjustmentsAudited statement of assets and liabilities of the Target Company as at 31 October 2020

Others RMB'million

Unaudited pro forma consolidated statement of assets and liabilities of the Enlarged Group

RMB'million

Note 1

Note 2

Note 3

Note 4

ASSETS Non-current assets

Property, plant and equipment Right-of-use assets

Intangible assets

Investments accounted for using equity method Other receivables, deposits and prepayments Pledged deposits

14,173 312

1,910

49 16,132

92 404

869 - 869

257 - 257

625 - 625

489 27

144 633

Deferred tax assets

- 27

Current assets

Financial assets at fair value through profit or loss

Trade, bills and tariff adjustment receivables Other receivables, contract assets, deposits and prepayments Pledged deposits

Restricted cash

Cash and cash equivalents

16,752

2,146

18,947

- 42

4,319 524 4,843

1,777 322 2,099

1,453 - 1,453

16 53 69

2,026

(1,008)

(4) 1,015

9,633 900 9,521

Total assets

26,385 3,046 28,468

LIABILITIES Non-current liabilities Bank and other borrowings Lease liabilities

Deferred government grant Deferred tax liabilities Other payables

12,678 1,410 14,088

121 - 121

1 - 1

256

10 266

8 - 8

13,064

1,410 14,484

Current liabilities

Other payables and accruals Lease liabilities

Bank and other borrowings

2,642

355

170 3,167

10 - 10

5,404 - 5,404

8,056 355 8,581

Total liabilities

21,120 1,765 23,065

Net assets

5,265 1,281 5,403

(II) NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES OF THE ENLARGED GROUP

Note 1 The unaudited consolidated statement of assets and liabilities of the Group as at 30 June 2020 is extracted from the published interim report of the Company as at 30 June 2020.

Note 2 The audited statement of assets and liabilities of the Target Company as at 31 October 2020 is extracted from the audited statement of financial position of the Target Company as set out in Appendix II to this Circular.

Note 3 On 4 December 2020, Beijing United Rongbang New Energy Technology Co., Ltd (the ''Purchaser''), an indirect wholly-owned subsidiary of the Company, entered into the Sale and Purchase Agreement with Jiangshan Fengrong Investment Co., Limited (the ''Vendor'') to acquire 100% of the equity interest in the Target Company.

Pursuant to the Sale and Purchase Agreement, the cash consideration for the acquisition of 100% of the equity interest of the Target Company is approximately RMB1,177,829,000, of which RMB169,637,000 will be paid within twelve months upon the completion of the Acquisition. Details of the consideration and payment terms are set out in the ''Letter from the Board'' section to this Circular.

Upon completion of the Acquisition, the Target Company will become an indirect wholly-owned subsidiary of the Company. The identifiable assets and liabilities of the Target Company will be accounted for in the Unaudited Pro Forma Financial Information of the Enlarged Group at fair value under the acquisition method of accounting in accordance with HKFRS 3 (Revised) ''Business Combinations''.

(i) The provisional purchase price allocation arising from the Acquisition is calculated as follows:

RMB'million

Consideration
Cash consideration	1,178
Less: Total identifiable assets acquired and liabilities assumed
Carrying amount of net assets of the Target Company acquired (Appendix II)	(1,281)
Pro forma fair value surplus of property, plant and equipment (see Note 3(ii)
below)	(49)
Effect on deferred tax liabilities arising from pro forma fair value surplus of
property, plant and equipment (see Note 3(iii) below)	10
(1,320)
Bargain purchase gain recognised in the profit or loss of the Enlarged Group	(142)

(ii) Pro forma fair value adjustment to property, plant and equipment
For the purpose of the Unaudited Pro Forma Financial Information, the fair values of the solar power plant owned by the Target Company with an aggregate installed capacity of approximately 300MW as at 31 October 2020 (the ''Solar Power Plant'') was based on an individual valuation report dated 25
December 2020 prepared by the independent qualified professional valuer, Zhonghe Appraisal Co.,
Ltd. The valuation of the Solar Power Plant owned by the Target Company was prepared using the income approach, through the use of the discounted cash flow method.
(iii) Deferred tax liabilities
Related deferred tax liabilities of approximately RMB10,086,000 arising from the pro forma fair value surplus on the property, plant and equipment of approximately RMB49,439,000 was estimated based on PRC Corporate Income Tax rate of 25% and preferential tax concession with a tax rate of 7.5% for the years up to 31 December 2022 and followed by a tax rate of 15% for seven years up to 31
December 2030.
Since the fair value of the identifiable assets and liabilities of the Target Company at the completion date may be substantially different from the fair value used in the preparation of the Unaudited Pro Forma Financial Information of the Enlarged Group, the final amounts of the identified net assets, goodwill or bargain purchase gain to be recognised in connection with the Acquisition may be different from the amounts presented above.

Note 4 The adjustment represents the estimated transaction costs of approximately RMB3,654,000 paid by the

Company in connection with the Acquisition.

Note 5 Apart from the Acquisition, no other adjustment has been made to the Unaudited Pro Forma Financial

Information to reflect any trading results or other transactions entered into by the Enlarged Group subsequent to 30 June 2020.

(B) INDEPENDENT REPORTING ACCOUNTANTS' ASSURANCE REPORT ON THE COMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION

TO THE DIRECTORS OF BEIJING ENERGY INTERNATIONAL HOLDING CO., LTD.

We have completed our assurance engagement to report on the compilation of unaudited pro forma financial information of Beijing Energy International Holding Co., Ltd. (the ''Company'') and its subsidiaries (collectively the ''Group'') and Yulin City Jiangshan Yongchen New Energy Limited (the ''Target Company'') (collectively the ''Enlarged Group'') by the directors of the Company (the ''Directors'') for illustrative purposes only. The unaudited pro forma financial information consists of the unaudited pro forma statement of assets and liabilities as at 30 June 2020 and related notes as set out in Part A of Appendix III to the circular dated 12 March 2021 (the ''Circular'') issued by the Company (the ''Unaudited Pro Forma Financial Information''). The applicable criteria on the basis of which the Directors have compiled the Unaudited Pro Forma Financial Information are described in Part A of Appendix III to the Circular.

The Unaudited Pro Forma Financial Information has been compiled by the Directors to illustrate the financial impact of the proposed acquisition of 100% equity interests in the Target Company (the ''Acquisition'') on the Group's assets and liabilities as at 30 June 2020 as if the Acquisition had taken place at 30 June 2020. As part of this process, information about the Group's assets and liabilities as at 30 June 2020 has been extracted by the Directors from the Group's interim condensed consolidated financial statements for the six months ended 30 June 2020, on which no audit or review report has been published.

DIRECTORS' RESPONSIBILITIES FOR THE UNAUDITED PRO FORMA FINANCIAL INFORMATION

The Directors are responsible for compiling the Unaudited Pro Forma Financial Information in accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the ''Listing Rules'') and with reference to Accounting Guideline 7 ''Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars'' ('' AG 7 '') issued by the Hong Kong Institute of Certified Public Accountants (''HKICPA'').

OUR INDEPENDENCE AND QUALITY CONTROL

We have complied with the independence and other ethical requirements of the Code of Ethics for Professional Accountants issued by the HKICPA, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour.

Our firm applies Hong Kong Standard on Quality Control 1 ''Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements'' issued by the HKICPA and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

REPORTING ACCOUNTANT'S RESPONSIBILITIES

Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the Listing Rules, on the Unaudited Pro Forma Financial Information and to report our opinion to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the Unaudited Pro Forma Financial Information beyond that owed to those to whom those reports were addressed by us at the dates of their issue.

We conducted our engagement in accordance with Hong Kong Standard on Assurance Engagements (''HKSAE'') 3420 ''Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus'' issued by the HKICPA. This standard requires that the reporting accountants plan and perform procedures to obtain reasonable assurance about whether the Directors have compiled the Unaudited Pro Forma Financial Information in accordance with paragraph 4.29 of the Listing Rules and with reference to AG 7 issued by the HKICPA.

For purpose of this engagement, we are not responsible for updating or reissuing any reports or opinions on any historical financial information used in compiling the Unaudited Pro Forma Financial Information, nor have we, in the course of this engagement, performed an audit or review of the financial information used in compiling the Unaudited Pro Forma Financial Information.

The purpose of Unaudited Pro Forma Financial Information included in the Circular is solely to illustrate the impact of a significant event or transaction on the unadjusted financial information of the Group as if the event had occurred or the transaction had been undertaken at an earlier date selected for purposes of the illustration. Accordingly, we do not provide any assurance that the actual outcome of the event or transaction at 30 June 2020 would have been as presented.

A reasonable assurance engagement to report on whether the Unaudited Pro Forma Financial Information has been properly compiled, in all material respects, on the basis of the applicable criteria involves performing procedures to assess whether the applicable criteria used by the Directors in the compilation of the Unaudited Pro Forma Financial Information provide a reasonable basis for presenting the significant effects directly attributable to the event or transaction, and to obtain sufficient appropriate evidence about whether:

• the related pro forma adjustments give appropriate effect to those criteria; and
• the Unaudited Pro Forma Financial Information reflects the proper application of those adjustments to the unadjusted financial information.

The procedures selected depend on the reporting accountant's judgement, having regard to the reporting accountant's understanding of the nature of the Group, the event or transaction in respect of which the Unaudited Pro Forma Financial Information has been compiled, and other relevant engagement circumstances.

The engagement also involves evaluating the overall presentation of the Unaudited Pro Forma Financial Information.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

OPINION

In our opinion:

(a) the Unaudited Pro Forma Financial Information has been properly compiled on the basis stated;
(b) such basis is consistent with the accounting policies of the Group; and
(c) the adjustments are appropriate for the purposes of the Unaudited Pro Forma Financial Information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.

Grant Thornton Hong Kong Limited

Certified Public Accountants

Level 12

28 Hennessy Road Wanchai

Hong Kong

12 March 2021

Chiu Wing Ning

Practising certificate number: P04920

Outlook of the Solar Energy Industry

According to the white paper entitled Energy in China's New Era published by the State Council Information Office in December 2020, China will adopt more vigorous policies and measures, striving to have carbon dioxide emissions peak before 2030 and to achieve carbon neutrality before 2060. Under the plan, by 2030, the consumption of non-fossil energy will account for about 25% of the primary energy consumption, and the total installed capacity of wind power and solar power will reach over 1.2 billion kW. It is expected that by 2060, the shares of electrical energy consumption, non-fossil energy consumption and clean energy generation will exceed 70%, 80% and 90%, respectively in China. Given the strong policy support for the solar energy industry, China's solar energy industry grew rapidly in 2020 and is expected to continue to see a rapid growth during the period of 14th Five-Year Plan.

Review of Business

The Target Company is principally engaged in the construction, operation, maintenance and management of solar photovoltaic power plants; technical consultation on solar photovoltaic power projects; and sales of solar photovoltaic power generation products. Currently, the Target Company owns a ground-mounted solar power plant in Shaanxi Province, the PRC, with a total installed capacity of 300 MW. The Target Company was enlisted to the 2nd batch of Renewable Energy Tariff Subsidy Project List of State Grid Corporation in 2020 on 31 July 2020, with a feed-in tariff of RMB0.80/kWh.

For 2018, 2019 and the ten-month period ended 31 October 2020, the Target Company recognized revenue from solar power of RMB245 million, RMB277 million and RMB281 million, respectively.

Income from Solar Power

In the first 10 months of

2017	2018	2019	2019	2020
RMB'000	RMB'000	RMB'000	RMB'000	RMB'000
(unaudited)
Sales of electricity	43,041	97,333	115,395	105,144	115,229
National subsidies	54,090	147,796	161,807	146,369	165,959
97,131	245,129	277,202	251,513	281,188
IV - 1

Segmental information

During the reporting period, the Target Company operated one reportable and operating segment, being the operation of ground-mounted solar power plant in Shaanxi Province, the PRC.

As such, there was no segmental information available for the reporting period.

Property, Plant and Equipment

As at 31 October 2020, the net carrying amount of the Target Company's property, plant and equipment amounted to approximately RMB1,910 million.

Current Assets, Non-Current Assets, Liabilities and Capital

As at 31 October 2020, the net current assets of the Target Company amounted to approximately RMB545 million. Current assets were mainly comprised of trade and tariff adjustment receivables of approximately RMB524 million, prepayments and other receivables of approximately RMB149 million, amount due from intermediate holding company of approximately RMB173 million, and deposits and restricted deposits of approximately RMB54 million. In addition, the Target Company had current liabilities of approximately RMB355 million, non-current assets of approximately RMB2,146 million and non-current liabilities of approximately RMB1,410 million.

Liquidity and financial resources

The Target Company's principal source of funding has been cash generated from its operations and proceeds from issue of share. The primary liquidity requirements have been for financing working capital and the repayment of the Target Company's loans.

Ten months

ended

31 October

2017

2018

2019

2020

RMB'000

Net cash (used in)/from operating activities

(90,145)

(1,262,455)

76,116 201,955

Net cash from/(used in) investing activities

34,012

(64,746)

23,533 (1,008)

Net cash from/(used in) financing activities

1,408,440 (174,236) (207,051)

Net (decrease)/increase in cash and cash equivalents

(56,133)

81,239

(74,587) (6,104)Net cash (used in)/from operating activities mainly comprised (i) operating cashflows before working capital changes; (ii) net cash inflow/outflow arising from changes in working capital; and (iii) cash outflow arising from income tax paid. The significant increase in the net cash from operating activities for the ten months ended 31 October 2020 is mainly because the Target Company was enlisted to the 2nd batch of Renewable Energy Tariff Subsidy Project List of State Grid Corporation in 2020 on 31 July 2020. The Target Company will receive more tariff adjustment from then on.

Net cash from/(used in) investing activities mainly comprised (i) payment for construction in progress; (ii) purchase of land use rights; and (iii) decrease/increase in amount due from an intermediate holding company.

Net cash from/(used in) financing activities mainly comprised (i) cash inflow arising from the proceed from other borrowings; and (ii) cash outflow arising from the repayment of obligations under other borrowings including interest payments.

The Target Company had not maintained any committed borrowing facilities or made any bank drawdown. The Target Company did not have any funding requirements for capital expenditure contracted for and authorized but not contracted for.

Capital structure and cash management

The registered and paid up capital of the Target Company was RMB1,200 million as at each year of 31 December 2017, 2018, 2019 and as at 31 October 2020.

The cash and bank balances were held in the form of bank deposits in RMB. The Target Company's management monitors rolling forecasts on the liquidity requirements to ensure the Target Company maintains sufficient liquidity reserve to support sustainability and growth of the Target Company's business.

The borrowing bare floating interest rate and is repayable by quarterly instalments by 2023.

The Target Company did not have any financial instruments for hedging purpose.

Gearing Ratio

As at 31 October 2020, the gearing ratio of the Target Company was approximately 57.9%.

The gearing ratio was defined as total liabilities divided by total assets.

Treasury policies

There were no treasury policies in the Target Company as of 31 October 2020.

Capital commitments

There was no capital commitment in the Target Company as of 31 October 2020.

Significant investment, material acquisitions and disposals

The Target Company did not have any significant investment, nor any material acquisition or other material disposal during the reporting period.

Prospect for new business

The Target Company did not have any plans for new investments as of 31 October 2020.

Future plans for material investments or capital assets

The Target Company did not have any plans for new investments as of 31 October 2020.

Pledge of assets

As of 31 October 2020, assets of the Target Company used as pledge for borrowings included: (1) property, plant and equipment of approximately RMB1,910 million, (2) trade and tariff adjustment receivables of approximately RMB524 million and (3) pledged deposit of approximately RMB144 million.

Remuneration policies and employee information

As of 31 October 2020, the Target Company did not have any direct employees.

Foreign exchange exposure

The assets, liabilities and business transactions of the Target Company are denominated in Renminbi. There was no financial arrangement for hedging purpose in respect of the Target Company during the financial period for ten months ended 31 October 2020.

Contingent liabilities

As of 31 October 2020, the Target Company did not have any contingent liabilities.

The following is an English translation of the summary of the Valuation Report dated 14 August 2020 in respect of the Yulin City Jiangshan Yongchen New Energy Limited*（榆林市江山永宸新能源有限公司）, which is prepared by ZhongHe Appraisal Co., Ltd. for the purpose of inclusion in this circular. Such report is prepared in Chinese and this English translation is provided for your reference only. In the event of any inconsistency between the Chinese and English versions, the Chinese version shall prevail.

ZhongHe Appraisal Co., Ltd. holds the domestic assets appraisal qualification jointly granted by the China Securities Regulatory Commission and the Ministry of Finance of the PRC.

SUMMARY OF THE ASSET VALUATION REPORT ON THE ENTIRE SHAREHOLDERS' EQUITY INTERESTS IN YULIN CITY JIANGSHAN YONGCHEN

NEW ENERGY LIMITED*（榆林市江山永宸新能源有限公司）

IN RELATION TO THE PROPOSED ACQUISITION OF EQUITY INTERESTS BY

BEIJING UNITED RONGBANG NEW ENERGY TECHNOLOGY CO., LTD.*

（北京聯合榮邦新能源科技有限公司）

Zhong He Ping Bao Zi (2020)

No. BJV3031D004

I. EXECUTIVE SUMMARY

ZhongHe Appraisal Co., Ltd. (hereinafter referred to as the ''Asset Appraisal Institution'') has accepted the engagement of Beijing United Rongbang New Energy Technology Co., Ltd.* to conduct an valuation on the market value of the entire shareholders' equity interests in Yulin City Jiangshan Yongchen New Energy Limited* in relation to the proposed acquisition of equity interests by Beijing United Rongbang New Energy Technology Co., Ltd.* as at the Valuation Base Date, pursuant to the laws, administrative regulations and asset valuation standards, and by adhering to the principles of independence, objectivity and impartiality and in accordance with the necessary valuation procedures. The asset valuation is summarized as follows:

Objectives of the Valuation: Beijing United Rongbang New Energy Technology Co., Ltd.* proposes to acquire the equity interests of Yulin City Jiangshan Yongchen New Energy Limited*

Subject of the Valuation: All shareholders' equity interests of Yulin City Jiangshan Yongchen New Energy Limited*.

Scope of the Valuation: The total assets and related liabilities of Yulin City Jiangshan Yongchen New Energy Limited*.

Valuation Base Date: 30 April 2020

Type of Value: Market value.

Valuation Approach: Asset-based approach and income approach.

Valuation Conclusion: According to specified circumstances of this project, the result under the income approach is selected as the conclusion of this valuation.

The carrying value of the total assets and the total liabilities of Yulin City Jiangshan Yongchen New Energy Limited* were RMB3,247.2346 million and RMB1,831.6316 million, respectively, and the carrying value and the assessed value under the income approach of the entire shareholders' equity interests were RMB1,415.6030 million and RMB1,455.3700 million, respectively, representing an increase of RMB39.7670 million or 2.81%.

The Validity Period of the Valuation Conclusion: one year from the Valuation Base Date, namely 30 April 2020.

Significant and Special Matters:

1. The accounting statements of Yulin City Jiangshan Yongchen New Energy Limited* on the Valuation Base Date have been audited by ShineWing Certified Public Accountants (Special General Partnership), and a special auditor's report with unqualified opinions (No. XYZH/2020BJA100518) has been issued.
2. In this valuation under the income approach, the power ratio of the components during their entire lifetime is mainly based on the Feasibility Study Report on the 300MW Photovoltaic Power Generation Project of Jiangshan Yongchen in Yuyang, Yulin（《江山永宸榆林榆陽光伏300MW發電工程可行性研究報告》）prepared by China Power Engineering Consulting Group Northwest Electric Power Design Institute Engineering Co., Ltd（. 中國電力工程顧問集團西北電力設計院有限公司）.
3. This assessed value of the fixed assets does not include VAT.
4. In December 2018, China Development Bank Financial Leasing Co., Ltd. and Yulin City Jiangshan Yongchen New Energy Limited* entered into a financial lease contract numbered Guo Jin Zu [2018] Zu Zi No. (B-098). The lease item was the 300MW photovoltaic power station assets of Yulin City Jiangshan Yongchen New Energy Limited* and its auxiliary facilities, etc., and the lease was of the value of RMB1.65 billion. The lease term is 12 years. At the same time, Jiangshan Fengrong Investment Company Limited*（江山豐融投資有限公司）, a shareholder of Yulin City Jiangshan Yongchen New Energy Limited* pledged 100% of its equity interests in the Company to China Development Bank Financial Leasing Co., Ltd.
5. There are a total of 7 buildings involved in this reporting valuation, involving a floor area of 3,347.90 square meters. As of the Valuation Base Date, the initial registration of housing ownership is still on hold, which is included in the valuation scope by the valuation personnel based on the declaration and explanatory information of Yulin City Jiangshan Yongchen New Energy Limited*. The valuation results of buildings that have not been registered for ownership do not include the cost of confirming the housing ownership by completing the registration procedures and the administrative fines that may be involved.

6. The transportation vehicles in this reporting valuation have been disposed of in May 2020. The valuation personnel has checked the relevant information such as the vehicle disposal contract, vouchers and invoices. This valuation confirms that the assessed value is based on the verified disposal value.
7. After being included into subsidies catalogue, the expected recovery period of tariff adjustment has a great impact on the valuation of the value of the entire equity interests of shareholders of Yulin City Jiangshan Yongchen New Energy Limited*. Sensitivity analysis on the accounting period of tariff adjustment after being included into subsidies catalogue is as follows:
Sensitivity analysis on the recovery period of tariff adjustment after being included into subsidies catalogue

Rate of

Recovery period of tariff adjustment after being	valuation
included into subsidies catalogue	Valuation	changes
0 year	156,521.00	7.55%
1 year	145,537.00	0.00%
2 years	135,481.00	-6.91%
3 years	126,358.00	-13.18%
II.	OBJECTIVES OF THE VALUATION

Since Beijing United Rongbang New Energy Technology Co., Ltd.*（北京聯合榮邦新能源科技有限公司）proposes to acquire the equity interests of Yulin City Jiangshan Yongchen New Energy Limited*（榆林市江山永宸新能源有限公司）, it is necessary to evaluate the value of the entire shareholders' equity of Yulin City Jiangshan Yongchen New Energy Limited*（榆林市江山永宸新能源有限公司）in order to determine its market value on 30 April 2020, the Valuation Base Date and provide a reference value for this economic behavior.

This economic behavior has been approved in the CEO Meeting Minutes of Panda Green Energy Group Limited (the 11th issue in 2020 of the total 53th issue).

III. OBJECTIVES AND SCOPE OF THE VALUATION

In light of the purpose of this valuation, the objective of this valuation is the value of the entire shareholders' equity of Yulin City Jiangshan Yongchen New Energy Limited*. The scope of valuation covers the total assets and related liabilities of Yulin City Jiangshan Yongchen New Energy Limited*.

Based on this valuation, the total assets amounted to RMB3,247,234,643.53 with current assets of RMB976,079,180.09, fixed assets of RMB1,951,201,205.86 and intangible assets of RMB5,156,936.14; and total liabilities amounted to RMB1,831,631,553.44 with current liabilities of RMB199,631,553.44, non-current liabilities of RMB1,632,000,000.00 and shareholders' equity was RMB1,415,603,090.09. Detailed information is set out in the table below:

Balance sheet as at 30 April 2020

Unit: RMB

Liabilities and
Assets	Amount	shareholders' equity	Amount
Current assets:	Current liabilities:
Cash	74,928,219.24	Short-term borrowings	-
Held-for-trading financial assets	-	Held-for-trading financial liabilities	-
Bills receivable	-	Bills payable	-
Accounts receivable	509,606,509.52	Accounts payable	105,548,465.03
Prepayments	12,704,661.88	Payments received in advance	-
Interests receivable	-	Staff remuneration payable	-
Dividends receivable	-	Taxes payable	2,761,579.51
Other receivables	193,259,083.53	Interests payable	8,556,851.85
Inventories	-	Dividends payable	42,763,954.76
Non-current assets due within one	-	Other payable	32,000,702.29
year
Other current assets	185,580,705.92	Non-current liabilities due within	8,000,000.00
one year
Other current liabilities	-
Total current assets	976,079,180.09	Total current liabilities	199,631,553.44
Non-current assets:	Non-current liabilities:
Available-for-sale financial assets	-	Long-term borrowings	-
Held-to-maturity investments	-	Debentures payable	-
Long-term receivables	165,000,000.00	Long-term payable	1,632,000,000.00
Long-term equity investment	-	Deferred income	-
Investment properties	-	Estimated liabilities	-
Fixed assets	1,951,201,205.86	Deferred income tax liabilities	-
Projects under construction	-	Other non-current liabilities	-
Project materials	-	Deferred tax credits	-
Right-of-use assets	88,945,610.80	Total non-current liabilities	1,632,000,000.00
Capitalized biological assets	-	Total liabilities	1,831,631,553.44
V - 4

Liabilities and
Assets	Amount	shareholders' equity	Amount
Oil and gas assets	-	Shareholders' equity:
Intangible assets	5,156,936.14	Equity	1,200,000,000.00
Development expenditure	-	Capital reserve
Goodwill	-	Less: treasury stock	-
Long-term deferred expenses	60,851,710.64	Special reserves	-
Deferred income tax assets	Surplus reserve	25,836,704.49
Other non-current assets	General risk reserve	-
Undistributed profit	189,766,385.60
Total non-current assets	2,271,155,463.44	Total shareholders' equity	1,415,603,090.09
Total assets	3,247,234,643.53	Total liabilities and shareholders'	3,247,234,643.53
equity

(I) The above objective and scope of the Valuation are the same as the objective and scope of the Valuation involved in economic behavior, and their carrying amounts have been audited by ShineWing Certified Public Accountants (Special General Partnership).

ShineWing Certified Public Accountants (Special General Partnership) has issued an unqualified audit report on the financial statements of the valued unit for the prior year and Valuation Base Date with report number XYZH/2020BJA100518.

(II) Type and quantity of off-balance-sheet assets declared by the valued unit: nil.
(III) Reference of the type, quantity and carrying amount involved in the conclusion of reports issued by other institutions: nil.

IV. TYPE OF VALUE AND ITS DEFINITION

Based on the purpose of valuation and the characteristics of the objective, the type of value concluded in this Valuation is determined to be market value.

Market value represents the estimated amount of value for which the objective will be exchanged on the Valuation Base Date between a willing buyer and a willing seller in an arm's length transaction wherein the parties have acted rationally and without compulsion.

V. VALUATION BASE DATE

(I) The Valuation Base Date for this valuation report is 30 April 2020.
(II) The Valuation Base Date was determined by the client. The Valuation Base Date was determined by taking into consideration of the end of the accounting period and factors beneficial to the realization of this economic behavior.
(III) The Valuation Base Date of this valuation report is the same as the Valuation Base Date specified in the asset valuation engagement contract.

VI. BASIS OF VALUATION Basis of economic behavior:

The CEO Meeting Minutes of Panda Green Energy Group Limited ( the 11th issue in 2020 of the total 53th issue).

Legal and regulation basis:

(I) ''Asset Appraisal Law of the People's Republic of China'' (adopted at the 21st Meeting of the Standing Committee of Twelfth National People's Congress on 2 July 2016);

(II) ''Law of the People's Republic of China on the State-owned Assets of Enterprises'' (adopted at the 5th Meeting of the Standing Committee of Eleventh National People's Congress on 28 October 2008);
(III) ''Company Law of the People's Republic of China'' (amendments as approved at the 6th Meeting of the Standing Committee of Thirteenth National People's Congress on 26 October 2018);
(IV) ''Property Law of the People's Republic of China'' (adopted at the 5th Meeting of Tenth National People's Congress on 16 March 2007);
(V) ''Land Administration Law of the People's Republic of China'' (amendments as approved at the 12th Meeting of the Standing Committee of Thirteenth National People's Congress on 26 August 2019);
(VI) ''Law of the People's Republic of China on the Administration of Urban Property'' (amendments as approved at the 12th Meeting of the Standing Committee of Thirteenth National People's Congress on 26 August 2019);
(VII) Measures for the Administration of State-owned Asset Valuation (Order No. 91 of the State Council, 1991);

(VIII) Detailed Rules for the Implementation of the Administrative Measures for State-Owned

Assets Assessment (Circular [1992] No. 36 released by the former State Administration for State-owned Assets);

(IX) Measures for the Supervision and Administration of the Transactions of State-Owned

Assets of Enterprises (Order No. 32 of the SASAC and the Ministry of Finance);

(X) Measures for the Administration of Assessment of State-owned Assets of Enterprises (Order No. 12 of the SASAC);

(XI) Provisions on Certain Issues Concerning the Management of the Valuation of State-owned Assets (Order No. 14 of the Ministry of Finance);
(XII) Measures for Financial Supervision and Administration of the Asset Valuation Sector (Promulgated by Order No. 86 of the Ministry of Finance on 21 April 2017, and amended in accordance with the Decision of the Ministry of Finance on the Amendment of Two Departmental Rules including the Measures for the Practice Licensing and Supervision and Administration of Accounting Firms on 2 January 2019);

(XIII) Guidelines for the Filing for Recordation of the Assessment Projects of State-owned Assets of Enterprises (Guo Zi Fa Chan Quan [2013] No. 64);
(XIV) Notice on Issues Relating to Strengthening the Management of the Valuation of State-owned Assets of Enterprises (Guo Zi Wei Chan Quan [2006] No. 274);

(XV) Notice on Matters Regarding Review of Asset Valuation Reports for State-owned

Assets of Enterprises (Guo Zi Chan Quan [2009] No. 941).

(XVI) Other laws and regulations in relation to asset valuation.

Standards basis:

(i) Basic Standards on Asset Valuation (Caizi [2017] No. 43);

(ii) Code of Professional Ethics for Asset Valuation (CAS [2017] No. 30);

(iii) Code of Practice on Asset Valuation - Asset Valuation Procedures (CAS [2018] No. 36);
(iv) Code of Practice on Asset Valuation - Asset Valuation Reports (CAS [2018] No. 35);
(v) Code of Practice on Asset Valuation - Asset Valuation Engagement Contracts (CAS [2017] No. 33);
(vi) Code of Practice on Asset Valuation - Asset Valuation Files (CAS [2018] No. 37);
(vii) Code of Practice on Asset Valuation - Asset Valuation Methods (CAS [2019] No. 35);
(viii) Code of Practice on Asset Valuation - Use of Expert Work and Related Reports (CAS [2017] No. 35);

(ix) Code of Practice on Asset Valuation - Enterprise Value (CAS [2018] No. 38);
(x) Code of Practice on Asset Valuation - Intangible assets》(CAS [2017] No. 37);

(xi) Code of Practice on Asset Valuation - Real Property (CAS [2017] No. 38);

(xii) Code of Practice on Asset Valuation - Machinery and Equipment (CAS [2017] No. 39);
(xiii) Guide to the Valuation Report on State-owned Assets of Enterprises (CAS [2017] No. 42);
(xiv) Guide to Quality Control of Asset Valuation Agency Operations (CAS [2017] No. 46);
(xv) Guidance on Types of Asset Valuation Values (CAS [2017] No. 47);
(xvi) Guidance on the Legal Ownership of Asset Valuation Subjects (CAS [2017] No. 48).

Basis of ownership:

(i) Approval documents, relevant agreements and others provided by Yulin City Jiangshan Yongchen New Energy Limited*;

(ii) The Title Deed of the PRC Real Property*（《中華人民共和國不動產權證》）provided by Yulin City Jiangshan Yongchen New Energy Limited*;
(iii) Other relevant certificate of property title.

Basis for pricing:

(i) The website named Appraisal Information (www.pingguw.com) by ZhongHe Appraisal Co., Ltd.;
(ii) The list of equipment provided by Yulin City Jiangshan Yongchen New Energy Limited*;
(iii) The operation record of equipment and various relevant information provided by Yulin City Jiangshan Yongchen New Energy Limited*;

(iv) The record of verification issued by appraisers upon the investigation on appraised objectives;
(v) Manual for Quotation of Electromechanical Products (2020);
(vi) Purchase and construction contracts and their original vouchers for key equipments provided by Yulin City Jiangshan Yongchen New Energy Limited*;
(vii) Information searched by appraisers through the internet;
(viii) Price List of Installation Projects of Shaanxi Province (2009);

(ix) Price List of Architectural Decoration Projects of Shaanxi Province (2009);
(x) Preparation Regulation for Cost Estimation of Photovoltaic Power Projects (NB/ T32027-2016);
(xi) Basis of Calculation for Investigation and Design of Photovoltaic Power Projects (NB/ T32030-2016);
(xii) Notice on Issuing the Transitional Implementation Plan on Adaption of the Pricing Basis of Power Projects to the Replacement of Business Tax with Value-Added Tax (Notice [2016] No. 9 by China Electric Power Project Cost Administration);
(xiii) Announcement on Relevant Policies for Deepening Value-added Tax Reform (Announcement No. 39 by the Ministry of Finance, the State Administration of Taxation and the General Administration of Customs in 2019);
(xiv) Report of Feasibility Studies on Jiangshan Yongchen Yulin Yuyang PV 300MW Power Generation Project prepared by Northwest Electric Power Design Institute Co., Ltd. of China Power Engineering Consulting Group*（中國電力工程顧問集團西北電力設計院有限公司）;
(xv) Notice on Shaanxi Provincial Price Bureau on Relevant Issues Concerning the Provincial On-grid Tariff Management (Shan Jia Shang Fa [2017] No. 67);
(xvi) Notice on Leveraging the Lever of Price to Promote the Healthy Development of the PV Industry (NDRC Fa Gai Price [2013] No. 1638);

(xvii)Wind Information;

(xviii) Other information in relation to the overall asset valuation.

Other basis:

(i) Audit report of the appraised objective as at the Valuation Base Date;
(ii) Asset valuation engagement contract.

VII. VALUATION APPROACH

Basic assets valuation approaches include the market approach, income approach and asset-based approach.

The market approach is a valuation approach whereby the value of the valuation subject is determined by comparing the valuation subject with comparable listed companies or comparable transaction cases.

This is an excerpt of the original content. To continue reading it, access the original document here.

Attachments

Original document
Permalink

Disclaimer

Beijing Energy International Holding Co Ltd. published this content on 11 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 March 2021 10:13:01 UTC.

Market Closed - Hong Kong S.E. Other stock markets 04:08:11 2024-05-08 EDT			5-day change	1st Jan Change
0.15 ^HKD	-4.46%		-0.66%	+12.78%

05-03	Beijing Energy International Unit Hires EPC Contractor	MT
05-01	Beijing Energy International Logs 3.7 Million Megawatt-Hours of Electricity Output in Q1	MT

Beijing Energy International Unit Hires EPC Contractor	05-03	MT
Beijing Energy International Logs 3.7 Million Megawatt-Hours of Electricity Output in Q1	05-01	MT
Beijing Energy International Holding Co., Ltd. Reports Group Operating Results for the First Quarter Ended March 31, 2024	04-30	CI
Beijing Energy International Unit to Buy Power Company; Shares Soar 6% Higher	04-04	MT
Beijing Energy International Arm to Build 125MW Wind Project	04-03	MT
TPC Consolidated Enters Scheme Implementation Agreement with Wollar Solar at AU$8.77 Per Share	04-01	MT
Beijing Energy's Profit Drops in 2023, Revenue Up	03-31	MT
Beijing Energy International Holding Co., Ltd. Proposes Final Ordinary Cash Dividend for the Year Ended 31 December 2023, Payable on 12 July 2024	03-28	CI
Beijing Energy International Holding Co., Ltd. Reports Earnings Results for the Full Year Ended December 31, 2023	03-28	CI
Beijing Energy International Holding Co., Ltd. Provides Consolidated Earnings Guidance for the Year Ended December 31, 2023	03-19	CI
Beijing Energy Arm Awards Wind Power Contract	02-08	MT
Beijing Energy International Holding Co., Ltd. Announces Establishment of the Sustainability Committee	02-01	CI
Beijing Energy's Power Generation Rises in Q4 2023	01-30	MT
Beijing Energy International Taps Consortium to Build Wind Power Generator for 571 Million Yuan	01-18	MT
Beijing Energy International Unit Hires Contractor for Photovoltaic Projects in Hebei Province	01-16	MT
Beijing Energy International Unit Taps Contractors for Photovoltaic Project in China's Yunnan Province	01-11	MT
Beijing Energy International to Receive Multiple Services from Controlling Shareholder	01-02	MT
Beijing Energy Invests 431 Million Yuan Into Solar Power Subsidiary	12-29	MT
Beijing Energy International Unit Rents Four Lots for Solar Power Projects	12-28	MT
Beijing Energy International to Fully Own Subsidiary for 1 Billion Yuan	12-21	MT
Beijing Energy Arm Awards 100MW Wind Power Contract	12-20	MT
Beijing Energy Seeks More Time to Dispatch Wind Farm Project Circular	12-18	MT
Beijing Energy International's Australia Subsidiaries to Buy Solar Farm Companies	12-14	MT
Beijing Energy International Raises 1 Billion Yuan from Bond Issue	11-20	MT
Beijing Energy Units Hire Contractors for Wind Power Projects	11-10	MT

	1st Jan change	Capi.
BEIJING ENERGY INTERNATIONAL HOLDING CO., LTD.	+12.78%	448M
WAAREE RENEWABLE TECHNOLOGIES LIMITED	+616.91%	3.73B
CECEP SOLAR ENERGY CO.,LTD.	-6.45%	2.83B
NYOCOR CO., LTD.	-2.94%	1.62B
SP NEW ENERGY CORPORATION	-14.39%	989M
O.Y. NOFAR ENERGY LTD	-9.91%	842M
ALTUS POWER, INC.	-34.11%	719M
ZHEJIANG SUNOREN SOLAR TECHNOLOGY CO.,LTD.	-20.73%	636M
J&V ENERGY TECHNOLOGY CO., LTD.	+67.55%	569M
SHANDONG HI-SPEED NEW ENERGY GROUP LIMITED	-14.35%	537M

Beijing Energy International Holding Co., Ltd.

Equities

686

BMG1146K1018

Electric Utilities

Beijing Energy International : MAJOR TRANSACTION IN RELATION TO THE ACQUISITION OF THE ENTIRE EQUITY INTEREST IN A COMPANY IN THE PRC; RE-ELECTION OF RETIRING DIRECTOR AND NOTICE OF SPECIAL GENERAL MEETING

Latest news about Beijing Energy International Holding Co., Ltd.

Chart Beijing Energy International Holding Co., Ltd.

Company Profile

Income Statement Evolution

Annual profits - Rate of surprise

Sector Solar Electric Ultilities