The Board of Inner Mongolia Energy Engineering Co., Ltd. announced that on February 12, 2018, the Company entered into the Joint Venture Agreement, pursuant to which the Company and IM Huadian have agreed to set up the Joint Venture in which the Company and IM Huadian will hold 49% and 51% equity interest, respectively. The total registered capital of the Joint Venture shall be determined based on 20% of the appraised value of the total assets of Helin Power Station. The Company shall pay its capital contribution by cash and IM Huadian shall pay its capital contribution by injection of the Helin Power Station, the appraised net assets of which shall count towards the capital contribution of IM Huadian.

If the appraised net assets of Helin Power Station is lower than the agreed capital contribution, IM Huadian shall pay the deficit by cash. Based on the unaudited management account of Helin Power Station, Helin Power Station had total assets of approximately RMB 3,399 million as of December 31, 2017. Assuming the valuation of the total assets of Helin Power Station were RMB 3,399 million, the capital contribution of the Company shall be RMB 333 million.

Nevertheless, the ultimate consideration payable by the Company shall depend on the total assets of Helin Power Station which is subject to valuation by competent authorities. The consideration is expected to be funded by proprietary fund of the Company. By way of forming the Joint Venture with IM Huadian, the Company can cooperate with IM Huadian in development of Helin Power Station.

Helin Power Station is located in Helinge'er New District, a development district under construction. Helin Power Station is a new project under the central government policy of "replacement of low capacity by high capacity". Two 66 MW supercritical indirect air-cooling units will be installed for the phase I of the project.

Based on the management account of Helin Power Station, Helin Power Station had a total asset of RMB 3,399 million as of December 31, 2017, and has not recorded any revenue or profit. The formation of the Joint Venture will be able to strengthen the position of the Company as a listing entity with strong asset quality and comprehensive business chain of power generation and is considered as an integral part of the "one body two wings" development strategy of the Company.