Obligation Huadian China Corporation 4.42% ( CND10000JT88 ) en CNY

Huadian China Corporation

100 % ▲

Chine

CND10000JT88 ( en CNY )

4.42% par an ( paiement annuel )

20/07/2022 - Obligation échue

Prospectus brochure de l'obligation China Huadian Corporation CND10000JT88 en CNY 4.42%, échue

100 CNY

1 000 000 000 CNY

China Huadian Corporation est une grande entreprise énergétique chinoise publique, impliquée dans la génération, la transmission et la distribution d'électricité, ainsi que dans la production d'énergie renouvelable.

L'Obligation émise par Huadian China Corporation ( Chine ) , en CNY, avec le code ISIN CND10000JT88, paye un coupon de 4.42% par an.
Le paiement des coupons est annuel et la maturité de l'Obligation est le 20/07/2022

INFORMATION NOTICE

Introduction

This Information Notice as well as all information contained herein (the "Information Notice") is
meant to provide details on the securities and the issuer in relation to the registration of the
securities onto the securities official list held by the Luxembourg Stock Exchange (LuxSE) without
admission to trading on one of the securities markets operated by LuxSE (LuxSE SOL).

The Information Notice is provided for information purposes only. It does not constitute and is not
construed as any advice, solicitation, offer, endorsement, commitment or recommendation to
invest in the securities described herein. The provision of the Information Notice is not and shall
not be a substitute for your own researches, investigations, verifications, checks or consultation
for professional or investment advice. You are using the Information Notice at your own risks. This
Information Notice may not be the complete disclosed information of the securities described
herein. For more disclosed information of the displayed securities, please visit the official website
of Shanghai Stock Exchange (SSE) (http://www.sse.com.cn/) which is the statutory information
disclosure website of the displayed securities.

LuxSE takes no responsibility for the contents of this Information Notice, makes no representation
as to its accuracy or completeness and expressly disclaims any liability for any loss arising from or
in reliance upon the whole or any part of the contents of this document.

Whole or part of the Information Notice may come from a translation of documents drafted in
Chinese and provided by the issuer of the securities described herein. SSE have made its best
efforts to verify that the content of the Information Notice is consistent with the information and
provisions of the initial documents drafted in Chinese and provided by the issuer of the securities
(the Issuer). Subject to the above, SSE takes no responsibility for the contents of this Information
Notice, makes no representation as to its accuracy or completeness and expressly disclaims any
liability for any loss arising from or in reliance upon the whole or any part of the contents of this
document.

The Information Notice has been reviewed and approved by the Issuer. The Issuer accepts full
responsibility and liability for the authenticity and accuracy of the Information Notice and its
content.

The date of this Information Notice is June 7, 2018.

Information on the Issuer

China Huadian Corporation Ltd is a China State-own company established in accordance with the
Company Law the Special Regulations and other relevant laws and regulations of the People's
Republic of China (The "PRC").
The Company was established with the approval of the State-owned Assets Supervision and
Administration Commission of the State Council. It is registered with and has obtained a business
license from State Administration for Industry and Commerce of the PRC on 29 DEC 2002. The
Company's business license number is: 100000000037772.
The registered address of the Company: No.2 Xuanwumennei Street Xicheng District Beijing
China- Postal code: 100031.
The Company is a state-own company of perpetual existence.
The industry of the company is according to the national economic industry classification (GB /
T4754-2011) the issuer belongs to the industry of electricity, heat, gas, and water production and
supply - 4414 wind power which has good prospects for development.
The Company is an independent legal entity with independent properties and rights therein which
shall enjoy civil rights and assume civil obligations in accordance with the law.
In 2017 profit before taxation of the Group amounted to RMB 6,725 billion representing an
increase of -47.80% as compared with RMB 12.882 billion of the previous year.
Net profit amounted to RMB 4,752 billion representing an increase of or -42.68% as compared
with RMB 8.29 billion of the previous year.
Net profit attributable to equity shareholders of the Company amounted to RMB 2,253 billion
representing an increase of -4.53% as compared with RMB 2.36 billion of the previous year.
There has been significant change in the financial position or trading position of the Company
since 31 December 2017.
Because the fuel purchase costs rise sharply, coal and electricity linkage price adjustment is not
timely. The profit before taxation has been decreased and influenced the net profit.
There has been no material adverse change in the prospects of the Company since 31 December
2017.
No profit forecast or estimate is made by Company.
The audit report for the year ended 31 December 2017 has been prepared by Shu Lun Pan
Certified Public Accountants Co Ltd in Beijing and does not include any qualifications.
There are no recent events particular to the Company which are to a material extent relevant to
its solvency.
China Huadian Corporation Ltd is one of the five state-owned sole proprietorship power
generation corporations organized
at the end of 2002 according to national reform for
electricity system.
The major business of China Huadian Corporation Ltd. includes power generation heat
production and supply development of primary energy related with electricity such as coal
and relevant technical service. It generates electricity through thermal hydro nuclear wind and
solar power sources. The company also engages in extracting transporting and selling coal for
railways ports and storage centers.

The power generation industry highlights clean, low-carbon and safe and efficient. The company
will increase the development of clean energy and actively and orderly develop hydropower.
The company will strive to achieve greater breakthroughs and realize the development of
"watershed, cascade, rolling". Adhere to the combination of scale and efficiency, new
construction and mergers and acquisitions. Combining, centralizing, and decentralizing, the
company will continue to increase the development of new energy sources such as high-quality
wind and optoelectronics. According to the national electricity price policy, the city
Field affordability, changes in production and operation costs, release of electricity sales market,
etc., cautious and rational investment, promotion due to time
Fabric energy. The focus of coal power development has shifted to clean and efficient projects
and cogeneration projects.

The coal industry highlights safety and quality and controls losses and turns losses. Effectively
moving from the pursuit of scale to improving quality and efficiency, Win the battle for quality
and efficiency. The company adheres to the principle of "mainly relying on electricity, extending
from top to bottom supply chain," and vigorously develops the coal industry to form an industrial
structure that combines coal with electricity and coal-fired electricity.

As one of the top five independent power producers ("IPPs") in China, Huadian Corporation has
been focusing on a variety of fields, which include power generation, heat generation and supply,
the development of primary energies used to generate electricity, financing activities, and
technology and engineering development. The Group has assets spread across 32 provinces in the
PRC and other overseas regions including Russia, Indonesia, Cambodia and Spain.

Specifically, as for power generation sector, the Group's total controllable installed capacity
reached 146.92GW at 31 December 2017, including 104,054MW of thermal power, 26,967MW of
hydropower, 13,088MW of wind power and 2,806MW of solar power. The thermal power
installation included 89,682MW coal-fired plants, 14,319MW of natural gas-powered turbines,
and 53.3MW of biomass facilities. In terms of power output, the Group generated 483.7TWh and
492.0TWh of electricity respectively for the years ended 31 December 2015 and 2016. In 2017,
the Group's total thermal power generation reached 512,300GWh, with 481,000GWh fed into the
grid and a total of 3,534 of utilization hours.

Description of the Bonds

Issuer
CHINA HUADIAN CORPORATION.
Bonds Issued
RMB 1 000 000 000 Green Corporate Bonds in denominations

of RMB 100.
Issue Date
20 July 2017.

The Green Corporate Bonds have been issued in public to eligible

investors.
Issue Price
100% of principal amount.
Interest Rate
4.42% per annum payable annually.
Interest Payment Date
20 July in each year.

Interest on the Bonds will accrue from their date of issue.
Maturity Date
20 July 2022.

Redemption
The Bonds will be redeemed at par on 20 July 2022.

The Bonds may be redeemed on 20 July 2020 at the

issuer/investors' decision.
Special Provisions
Issuer's Option of Adjusting Coupon Rate:

At the end of the third year from issuance the issuer has the

right to adjust the bond coupon rate for the remaining year of

its duration.

Investor's Put Option

After the issuer making public announcement on whether or

not to exercise the right to adjust coupon rate (and by how

much to adjust the coupon rate) bondholders have the right

to exercise the put option.
Rating
AAA by United Credit Ratings Co. Ltd, Beijing.
Ranking
The Bonds constitute direct unsecured and unsubordinated

obligations of the bank ranking pari passu without any

preference or priority of payment among themselves with all

other unsecured and unsubordinated indebtedness of the

Company.
Transfer Restrictions
The Bonds may be traded on the Shanghai Stock Exchange and

circulated in the secondary market.
Identification number
ISIN Code CND10000JT88.
Display
Application has been made to display the Bonds on the Securities

Official List held by the Luxembourg Stock Exchange (LuxSE

SOL) without admission to trading on one of the markets

operated by the Luxembourg Stock Exchange. The Bonds will also

be displayed on the Luxembourg Green Exchange (LGX).

The display of the Bonds on LuxSE SOL and LGX will become

effective on 7 June 2018.
Trading
The Bonds are listed and admitted to trading on the Shanghai

Stock Exchange under ticker symbol 143180.
Governing Law
The Bonds are governed by the laws of the People's Republic of

China.
Use of proceeds
The proceeds from the Green Corporate Bonds have been used

principally to repay the Company's interest-bearing debts so as

to support the Company's green business development.

Risks Factors

Summary of the information on the key risks specific and individual to the Company and the bonds.

A particular attention should be paid to the fact that the Issuer operates in the People's Republic of China
under a legal and regulatory environment which, in some respects, may differ from that which prevails in
other countries.

I. Investment Risks Related to the Bond
Affected by factors such as the overall operation of the national economy, the country's macroeconomic
environment, financial and monetary policies, and changes in the international economic environment, the
market interest rate may fluctuate. Since this bond may span more than one interest rate fluctuation cycle,
the investment value of bonds may fluctuate with the fluctuation of market interest rate during the duration
of the bonds, thus making the bond value held by the current bond investors have some uncertainties.
(I) Solvency Risk
The issuer is currently operating and financially sound. During the bond duration, there are certain
uncertainties in the external factors such as the macroeconomic environment, capital market conditions, and
related national policies, as well as the company's own production and operation. Changes in these factors
will affect the company's operating conditions, profitability and cash flow, may lead to the company cannot
get enough funds from the expected source of repayment to pay the principal and interest of the bonds on
time, so that investors face a certain solvency risk.
(II) Risks peculiar to this bond arrangement
The Company intends to rely on its good operating performance, bank-enterprise relationships and diversified
financing channels to ensure the scheduled payment of the bonds. However, if the company's own operating
performance fluctuates during the bond duration, or if the financing capacity is weakened due to changes in
the financial market and bank-enterprise relations, it will be possible to exert pressure on the timely and full
repayment of the bonds.
(III) Credit risk
The company's current asset quality and liquidity are good, and it can pay the debt principal and interest on
time. In the past three years, there has been no serious breach of contract in important business transactions
with its major customers. In the future business operations, the issuer will uphold the principle of good faith
management and strictly perform the signed contracts, agreements or other commitments. However, if the
issuer's creditworthiness changes due to objective reasons during the bond duration, the interests of the
bond investors may be adversely affected.
(IV) Rating Risk
The company's current credit standing is in good condition and it can pay the debt principal and interest on
time. The Company is unable to guarantee that the credit rating of the entity and the credit rating of the
current bond will not change negatively during the current bond duration. If the company's credit rating
and/or the credit rating of the current bond have changed negatively during the current bond duration, the
market transaction price of the current bond may fluctuate drastically, and may even cause the current bond
to fail to make a list in the Shanghai Stock Exchange.

II. Risk Related to the Issuer
(I) Financial Risk
1. Risk of high debt-to-liability ratio
2. Risk of solvency of current liabilities
3. Risk of recovery of accounts receivable
4. Risk of inventory depreciation
5. Risk of fluctuations in profitability
6. Risk of cash flow fluctuations in operating activities
7. Risk of greater capital expenditures
8. Risk of large capital expenditure commitments
9. Risk of exchange rate fluctuations
10. Risk of fluctuating investment returns
11. Risk of government subsidies
12. Risk of increased financial costs

(II) Operational risk
1. Risk of cyclical fluctuations in the economy
The correlation between the profit level of the power companies and the fluctuation of the economic cycle is
relatively high. The power demand of the heavy industry and the manufacturing industry are in the
downstream and the power generation of the power generation companies themselves are important factors
that determine the profitability of the power generation enterprises. If the economic development slows
down or declines in the future, the corresponding reduction in electricity demand may adversely affect the
company's profitability.
In 2016, the total electricity consumption of the whole society was 5,919.837 billion kWh, an increase of
5.00% year-on-year. The primary industry's electricity consumption was 107,488 million kwh, an increase of
5.37%; the secondary industry's electricity consumption was 4,218,809 million kwh, an increase of 5.15%; the
tertiary industry's electricity consumption was 796,136 million kwh with a year-on-year increase of 11.23%.
Economic fluctuations will directly affect the demand for power products such as electricity, especially in the
economic downturn, the company's operating performance may be adversely affected.
2. Risk of firepower and fuel costs
The company's business is mainly in thermal power generation. As of the end of 2016, the company's
controllable installed capacity was 142.8236 million kilowatts, of which thermal power 10,150.5 kilowatts,
accounting for 71.07% of the company's total installed capacity. Coal-fired power generating units use coal as
the main fuel. Inadequate supply of coal, shortage of transport capacity, or declining coal quality may affect
the normal operation of the company's power generation business.
The cost of fuel is the main component of thermal power business operations. Changes in coal prices will have
a significant impact on the company's thermal power plant performance. Global coal prices have fallen sharply
since 2014, which has led to a significant drop in power generation costs for power companies. Since 2016,
coal prices have continued to rise. As of September 28, 2016, the 5,500-kilocal-ton Bohai steam coal price
index closed at 561 yuan per ton, which represented a large increase from the beginning of the year. If coal
prices rise in the future, it will cause the increase in costs, affecting the company's operating performance. In
order to ensure the smooth and healthy development of the industry, on November 8, 2016, the four major

central enterprises of the Company, Shenhua Group, China Coal Group, and Guodian Investment Group,
through full consultation and communication, signed the first batch of medium- and long-term contracts for
the purchase and sale of coal in Beijing Huadian Building. It ensures the stability of the company's fuel prices
and further reduces the risk of fuel cost fluctuations.
3. Risk of fluctuations in the number of hours of use of the unit
In recent years, with the rapid growth of power investment, the country's total installed power capacity has
continued to grow. As of the end of 2016, the nation's installed power generation capacity reached 1.65
billion kilowatts, an increase of 8.2% year-on-year. In 2016, the total social power consumption was 5.92
trillion kilowatts. At the same time, it increased by 5.00% year-on-year. The growth rate of electricity
consumption is lower than the growth rate of total installed capacity in the country. In 2014-2016, the
average utilization hours of the company's power units were 4,188 hours, 3,842 hours and 3,582 hours,
respectively. Affected by the aforementioned power supply and demand relationship, the average utilization
hours of the company's power generating units may continue to decline in the future. If the average
utilization hours further decline, the company's profitability and performance levels will be affected.
4. Risk of new projects and project operations
As of the end of 2016, the company's consolidated installed capacity reached 142.8136 million kilowatts.
There are 8 sets of 1 million kilowatt-class thermal power units, 57 sets of 600,000 kilowatt-class thermal
power units, 180 sets of 300,000~600,000 kilowatt-class units, and 161 sets of 300,000 kilowatts or lower
units. The company's Yunnan Jinshajiangliyuan Hydropower Project, Neimenggu Tuyou Project Phase I, and
Hunan Changde Project Phase I all reached the 600,000-kilowatt-class unit level, and the construction and
operation of the unit required large capital investment and high maintenance. The cost and high technical
level of the operator, such as unexpected events in the construction and operation process or shortage of
funds and personnel, will affect the company's production and operation, and may affect the company's
profitability and solvency.
5. Risk of business type concentration
Most of the company's main business income comes from electricity sales, and the business structure is
relatively single. Although it is conducive to the company's professional management, but with the intensified
competition in the power industry, the business is too single which may weaken the company's ability to resist
risks.
6. Risk of safety production
The safety of power production depends mainly on the safe and reliable operation of power equipment. If an
operation accident occurs due to improper operation or maintenance, it will adversely affect the company's
normal production.
On the other hand, the electric power industry in which the company is located is closely related to the coal
industry. Although the state has strict supervision on the safety production of the coal industry in recent years,
the coal industry is still one of the industries with high safety production accidents. The objective safety
production risks in the coal industry may have a significant impact on company's operations.
7. The incident affects the risk of the company's production and operation
The business of the issuer may be affected by unexpected events such as natural disasters, industrial policy
adjustments, and negative media reports, which pose potential risks to the company's production and
operations. In recent years, the company has increased its investment in emergency prevention. However, the
possibility of emergencies still exists. Once preventive measures are not implemented, it will have an impact
on the company's production and operations, and thus affect the company's financial status.

8. Risk of holding company
The company is a holding group company. The profit of the parent company mainly comes from investment
income. If the subsidiary company's operating conditions and dividend policy changes, it will have a certain
impact on the parent company's profitability and solvency.
In addition, the occurrence of a debt default event by the subsidiary company of the company may affect the
company's ability to pay its debt and interest, as well as its corporate image, thereby adversely affecting
bondholders.
9. Risk of major lawsuits
The issuer's business involves multiple types and spreads across various regions of the country. Therefore, the
issuer's business activities involve many stakeholders, including government departments, residents of
operating areas, and environmental protection organizations. If the above stakeholders raise lawsuits on
thermal power projects, hydropower projects, wind power projects and nuclear power projects operated or
constructed by the company, the company's business activities will be adversely affected.
(III) Managing Risk
The company's main business is electric power production, but it is also involved in coal development,
investment, engineering construction and other fields. Diversified operation across industries has great
challenges to the company's expertise, management, and operation level.
As one of the five national power generation enterprise groups, the company has established second-tier
companies such as Sichuan, Yunnan, Inner Mongolia, Shanxi, Shaanxi, Huadian Finance, Huadian Science and
Technology and Huadian Coal, and has more than 700 grass-roots enterprises in more than 30 provinces,
cities and autonomous regions throughout the country. Although the company has established and
implemented a relatively complete internal control system and system, due to the large number of
subordinate companies and geographical distribution, the company still has the possibility of not being able to
implement effective control and risk management on its subsidiaries, and may affect the company's business
activities and the smooth development.

(IV) Policy Risk
1. Risk of pricing of electricity products
At present, the company's electricity prices are supervised and managed by the National Development and
Reform Commission, the Ministry of Environmental Protection, and local competent authorities. In September
2014, the National Development and Reform Commission's "Notice on Addressing Issues Concerning the
Contradiction of Environmental Protection Electricity Price Contradictions" (Development and Reform Price
[2014] No. 1908) decided to appropriately reduce the on-grid tariff of coal-fired power generation companies
while maintaining the overall level of sales price. In January 2015, the National Development and Reform
Commission formally issued the "Notice on Adjusting On-grid Price of Land-based Wind Power Benchmarking
Properly" to reduce the on-grid price of wind power benchmarks in the first, second and third resource
regions. In April 2015, the National Development and Reform Commission's "Notice on Reducing the On-grid
Electricity Prices for Coal-fired Power Generation and the Price of Industrial and Commercial Electricity"
announced the continued reduction of the coal-fired electricity generation on-grid tariffs and industrial and
commercial electricity prices in the country. In December 2015, the National Development and Reform
Commission issued the "Notice of the National Development and Reform Commission on Reducing the Price
of Coal-fired Power Generation for On-grid Electricity Tariffs and General Industrial and Commercial Electricity
Prices" (Development and Reform Price [2015] No. 3105), and decided that from January 1, 2016 onwards.

The average price of coal-fired electricity generated in the country is reduced by approximately 3 cents per
kilowatt-hour (including tax, the same below). The average sales price of electricity for general industry and
commerce in the country is reduced by about 3 cents per kilowatt-hour. In December 2015, the National
Development and Reform Commission issued the "Notice on Perfecting Land-based Wind Power PV Power
Generation Benchmarking Electricity Pricing Policy" to explicitly target the on-grid benchmark electricity prices
for land-based wind power projects, and reduce the two-category resource areas by 2 cents and 3 cents
respectively\ before 2016 and 2018 respectively. The four types of resource areas were reduced by 1 cent and
2 cents respectively. This regulation applies to onshore wind power projects approved after January 1, 2016
and January 1, 2018, as well as onshore wind power projects that were approved before January 1, 2016, but
have not yet commenced construction by the end of 2017. On June 30, 2016, the National Development and
Reform Commission issued the "Notice on Perfecting the Implementation Mode of Basic Electricity Price for
Two-part Electricity Tariff Users", and adjusted the basic electricity price charging mode change cycle from
current year-on-year to quarterly, and required power grid companies to actively apply for adjustments to
billing methods, capacity reductions, and suspensions for power-using companies to ensure that relevant
measures are put in place so that power companies can really benefit from them. On November 16, 2016, the
National Development and Reform Commission announced the draft of the "Provincial Grid Transmission and
Distribution Pricing Method (Trial)" solicitation draft form, formally soliciting opinions from the public, which
may have a significant impact on power investment and electricity prices in the future. In December 2016, the
National Development and Reform Commission issued the Notice on Adjusting the On-grid Price of Land-
based Wind Power Benchmarking for Photovoltaic Power Generation (Price of Development and Reform
[2016] No. 2729). According to the current technological progress and cost reduction of the new energy
industry, it will reduce the on-grid benchmark on-grid tariffs for newly-built PV power generation after
January 1, 2017 and new approvals onshore wind power after January 1, 2018. The newly established onshore
wind power benchmarking on-grid price policy announced in the previous years will no longer be
implemented. The part of on-grid PV power generation and land-based on-grid wind power prices that are
within the benchmark price of local coal-fired units (including desulfurization, denitrification, and dust
removal electricity prices) shall be settled by local provincial power grids; the higher part shall be subsidized
through the National Renewable Energy Development Fund. After the adjustment, the benchmark on-grid
tariffs for Class I, Class II, Class III, and Class IV resource zones in newly built onshore wind power projects in
2018 were 0.40 yuan/kWh (tax included), 0.45 yuan/kWh (tax included), 0.49 yuan/kWh (tax included) and
RMB 0.57/kWh (tax included) respectively. At the same time, the notice clarified the on-grid tariff for offshore
wind power benchmarking, and determined the on-grid tariff for non-bidding offshore wind projects by
distinguishing offshore wind power and intertidal wind power. The on-grid tariff of the offshore wind power
target pole is 0.85 yuan per kilowatt-hour, and the on-grid tariff of the inter-tidal wind power target pole is
0.75 yuan per kilowatt-hour. The part of on-grid tariffs for onshore wind power that are within the on-grid
tariffs for local coal-fired units (including desulfurization, denitrification, and dust removal tariffs) shall be
settled by local provincial power grids; the higher part shall be subsidized through the National Renewable
Energy Development Fund. If the company's on-grid tariffs are subject to further downward adjustments or if
the fuel costs cannot be raised in time, the company's operating performance will be affected.
2. Risk of power system reform
On March 15, 2015, the State Council promulgated "Several Opinions on Further Deepening the Reform of the
Electric Power System by the Central Committee of the Communist Party of China and the State Council", and
put forward the overall thinking, basic principles and recent key tasks for deepening the reform of the electric

power system. On November 26, 2015, the National Development and Reform Commission further
promulgated the "Implementation Opinions on Promoting the Reform of Transmission and Distribution
Prices", "Implementation Opinions on Promoting the Construction of Electricity Markets", "Implementation
Opinions on the Establishment and Standardized Operation of Electricity Trading Institutions", "Opinions on
the Implementation of Orderly Development and Utilization of Electricity", "Implementation Opinions on
Promoting the Reform of Power Supply Side", and "Guiding Opinions on Strengthening and Regulating the
Supervision and Management of Coal-fired Power Plants". On February 2, 2016, the "Replied Letter of the
National Energy Administration of the National Development and Reform Commission on the Establishment of
Beijing and Guangzhou Power Trading Centers" (National Development and Reform Commission [2016] No.
414) reviewed and passed the "Beijing Power Trading Center Construction Plan" and "Guangzhou Power
Trading Center Construction Plan", and required the acceleration of the establishment and operation of the
Beijing Power Trading Center and the Guangzhou Power Exchange Center, and the role of the trading center
as a platform as soon as possible to provide a fair and standardized trading service for the optimization of
power resources in a wider range of configurations. Since March 2016, the National Development and Reform
Commission and the National Energy Administration have issued multiple reply letters to approve Shanxi,
Beijing, Shanghai, Gansu, Ningxia, Hainan and other provinces in the country to conduct comprehensive pilot
projects for power system reform. The main content of the power system reform is to deepen reforms to
adhere to the direction of marketization, and to establish and improve the electricity market mechanism as
the main objective. According to the institutional framework of keeping in mind and letting go of both ends,
reform should orderly release of competitive link prices outside of transmission and distribution, orderly
liberalize the electricity distribution business to social capital, orderly liberalize the electricity and electricity
use plans beyond public welfare and regulation, gradually break monopolies, change the situation of grid
companies purchasing electricity through unified purchase, promote direct trading of market entities, and
give full play to the market's resources as decisive role in configuration.
With the gradual progress of the reform of the power system, the company's generating units meeting the
requirements will gradually participate in the power market transactions. The on-grid tariff for participating in
electricity market trading units will be changed from the current government pricing method to market
transaction pricing. The electricity sales volume of the units participating in the electricity market transaction
will also shift from government planned electricity to market-determined electricity sales, so there is a certain
degree of uncertainty on the company's future electricity price level and electricity sales, which may have a
certain degree of impact on the company's business or profitability.
3. Risk of environmental protection policy adjustment
In August 2012, the "Twelfth Five-Year Plan for Energy Saving and Emission Reduction" formally issued by the
State Council put forward a proposal to strengthen the management of energy use and energy conservation,
and improve a series of environmental protection requirements such as energy conservation and
environmental protection laws and standards. From January 1, 2012, the "Emission Standard of Air Pollutants
for Thermal Power Plants" (GB13223-2011) jointly issued by the Ministry of Environmental Protection and the
General Administration of Quality Supervision, Inspection and Quarantine was formally implemented. Among
them, the requirements for the new units to begin in 2012 are: In 2014, the unit's nitrogen oxide emissions
must not exceed 100 mg/m3. By 2015, all thermal power units must install flue gas denitrification facilities. In
addition, during the "Twelfth Five-Year Plan" period, nitrogen oxides are included as a rigid constraint
indicator in the national assessment of pollution reduction, and the construction of flue gas denitrification
facilities in coal-fired power plants is the key to achieving the total nitrogen oxide emission control targets. In