China Tian Lun Gas : Voluntary Announcement Acquisition of 100% Equity Interest in the Target Company in Henan Province

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China Tian Lun Gas Holdings Limited ʕ਷˂ࡐዷंછٰϞࠢʮ̡

(incorporated in the Cayman Islands with limited liability)

(Stock code: 01600)

VOLUNTARY ANNOUNCEMENT

Acquisition of 100% Equity Interest in the Target Company in Henan Province

This announcement is made by China Tian Lun Gas Holdings Limited (the "Company", together with its subsidiaries, the "Group") on a voluntary basis.

ACQUISITION

The board (the "Board") of directors (the "Directors") of the Company is pleased to announce that Henan Tian Lun Gas Group Limited ("Henan Tian Lun", an indirect wholly-owned subsidiary of the Company) recently entered into an equity transfer agreement with an individual (the "Vendor"), pursuant to which, Henan Tian Lun agreed to acquire the entire equity interest in Xiping Kaida Gas Limited€Г̻௱༺ዷंϞࠢʮ̡(the "Target Company") from the Vendor at a total consideration of RMB152,000,000 ("Total Consideration") (the "Acquisition").

The Total Consideration of the Target Company was determined by the Company and the Vendor after taking consideration of the current asset scale of the Target Company, the operating region of its gas business and customer bases, its profitability as well as the potential operation growth of the Target Company based on arm's length negotiation, and it will be funded from the internal resources of the Group. The Directors take the view that the Total Consideration is fair and reasonable.

As at the date of this Announcement, Henan Tian Lun has completed the change of industry and commerce registration of the Target Company with the Vendor.

REASONS AND BENEFITS OF THE ACQUISITION

Zhumadian City is located in the south-central part of Henan Province, falls within the combining zone of Southeast Northwest of China, and is bounded by the east and the west, runs through the south and the north, thus bringing its obvious advantages in terms of transportation location. As of 2017, the population of this city was 8.02 million and its GDP reached approximately RMB 200.3 billion. Zhumadian City is included in the inland rising area in the Midwest of China by the

Development Plan for the Huaihe Ecological and Economic Belt€ଊئ͛࿒຾᏶੭೯࢝஝ྌ' issued by the National Development and Reform Commission, which also puts forward detailed requirements with respect to the infrastructure construction, industrial development, as well as air pollution prevention and control in this city.

The Target Company operates its business in the urban area of Xiping County, Zhumadian City. Xiping County is 130 kilometers away from Xinzheng International Airport and located within the "One Day Economic Circle"€ɓ˚຾᏶ਸ਼of Zhengzhou and Wuhan, both of which are central cities of China. In 2017, the gross population of Xiping County was 860,000, and its GDP reached RMB22.5 billion, representing a YoY growth of 8.7% and ranking first in Zhumadian City in terms of growth rates. Furthermore, Xiping County is also a pilot demonstration project for the cooperation of the national township enterprises in the East, Central and West, and an experimental county among the national enrichment counties based on science and technology.

The Target Company's business operations are mature and stable, and the number of its existing residential users, commercial users and industrial users reached 43,000, 379 and 30, respectively. The annual gas sales achieved approximately 20.82 million cubic meters, with its current gas sources from the Henan Lantian Gas Limited Yunan Branch€ئیᔝ˂ዷं፝ی˕ᇞ. Our cost of pipeline installation to Xiping County is relatively low as the long-distance pipeline of the Company in Henan Province is only 26 kilometers away from Xiping County. Upon the completion of the Acquisition, a high-pressure pipeline extending to Xiping County will be installed to guarantee the sufficient gas offerings for the future development of this project, and therefore reduce the cost of gas procurement.

Xiping County has a complete industrial system, including Zhishang Industrial Park€౽֠ʈุ ෤, Huaxia Zheshang Industrial Park€ശࢀएਠʈุ෤, Leizu Textile Industrial Park€ྵख़५ ᔌʈุ෤and Industrial Cluster Industrial Park (ପุණၳਜʈุ෤), which are mainly engaged in garment, agricultural and livestock products processing, and mechanical processing industries. The industrial gas sales will lead to a considerable growth as the promotion of coal-to-gas business for existing industrial users progresses and new industrial users settle down. In addition, according to the layout plan of the Xiping County Government, the seven local shantytown renovation projects will bring about 20,000 resettlement units, together with the expected nearly 20,000 new units to be delivered in the next three years resulting from a further expansion in the urban areas, as well as about 16,000 additional residential users in the county that have installed their pipeline but have not installed gas meters and thus not yet been provided with any gas, bringing a broad prospect for residential gas consumption in the future.

By virtue of the Acquisition, the Group can take the operating area of the Target Company as an original point to radiate to villages and towns nearby and further expand its coverage in the coal-to-gas business in Henan Province. At the same time, it can form a synergy with the Group's urban gas projects already under operation in Henan Province, so as to further enhance the Group's superiority and expand its market share in the gas network of Henan Province.

INFORMATION ON THE TARGET COMPANY

The Target Company is a limited company established in the People's Republic of China in April 2003 and is principally engaged in sales of pipeline natural gas, provision of urban gas installation (with qualification certificate), natural gas technology consulting service and sales of gas stoves, etc.

To the best of the Directors' knowledge, information and belief, having made all reasonable enquires, the Vendor is independent of the Company and its connected persons (as defined in the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited ("Listing

Rules")).

LISTING RULES IMPLICATIONS

As all the applicable ratios under Rule 14.07 of the Listing Rules in relation to the Acquisition of the Target Company are below 5%, therefore, the Acquisition of the Target Company does not constitute a notifiable transaction of the Company under Chapter 14 of the Listing Rules.

By Order of the Board

China Tian Lun Gas Holdings Limited

Zhang Yingcen

Chairman

Zhengzhou, the People's Republic of China, December 16, 2018

As at the date of this announcement, the executive Directors are Mr. Zhang Yingcen (Chairman), Mr. Xian Zhenyuan, Mr. Zhang Suwei, Mr. Feng Yi and Ms. Li Tao; the non-executive Director is Mr. Wang Jiansheng and the independent non-executive Directors are Mr. Liu Jin, Mr. Li Liuqing, Mr. Yeung Yui Yuen Michael and Ms. Zhao Jun.