China Yangtze Power Co., Ltd.

Announcement on Issue Results and Shares Changes for Purchasing Assets and Raising Subscription Funds by Issuing Shares and Paying Cash, as well as the Related Party Transaction

The board of directors and all directors of China Yangtze Power Co., Ltd. (the "Company") warrant that there are no false representations and misleading statements contained in, or material omissions from, this announcement, and severally and jointly accept the responsibility for the truthfulness, accuracy, and completeness of the contents of this announcement.

Important note:

l Class of shares: RMB common stock (A shares)

l Offering price: 17.46 yuan per share

l Issue targets, number of shares issued

l Estimated Stock circulation time

The registration of the additional shares issued for the purchase of assets was completed on 3 February 2023 at the Shanghai Branch of China Securities Depository and Clearing Corporation. The additional shares are limited shares with conditions. The consideration shares obtained by China Three Gorges Corporation through this transaction are subject to a 36-month restricted period, and the shares obtained by Yunnan Provincial Energy Investment Group Co., Ltd. and Sichuan Energy Industry Investment Group Co., Ltd. are subject to a 12-month restricted period. The additional shares issued during this period will be listed and traded on the Shanghai Stock Exchange one trading day after the restricted period expires. The restricted period will begin on the date of share issuance.

l Transfer of assets

As of the date of this announcement, the transfer of 100% equity interest in Three Gorges Jinsha River Yunchuan Hydropower Development Co., Ltd. and the change of business registration procedures had been completed. After this transfer of assets, the Company holds a 100% equity interest in the Yunchuan Company.

l The interpretations of the abbreviations of the relevant entities and terms used in this announcement shall be in compliance with those in the Additional shares listing Report of Purchasing Assets and Raising Counterpart Funds by Issuing Shares and Paying Cash, as well as the Related Party Transaction, unless otherwise stated.

I. Overview

(I)      Decision-making and approval procedures for this Transaction

1. This Transaction has been considered and approved at the 30th meeting of the fifth session of the Board of Directors of the Listed Company;

2. This Transaction has been considered and approved at the 8th meeting of the sixth session of the Board of Directors of the Listed Company;

3. This Transaction has been considered and approved by the internal decision-making bodies of CTG, Three Gorges Investment, Yunnan Energy Investment, and Sichuan Energy Investment;

4. The results of asset valuation in relation to this Transaction have been approved by the authority competent for supervision and administration of state-owned assets;

5. This Transaction has been approved by the authority competent for supervision and administration of state-owned assets;

6. This Transaction has been considered and approved at the Second Extraordinary General Meeting of 2022 of the Listed Company;

7. This Transaction has been approved by CSRC.

(II)    Status of this issuance

1.   Type and par value of shares to be issued

The shares to be issued in this transaction are RMB A common shares with a par value of 1.00 yuan.

2.   Pricing principle, pricing ex-date, and offering price

According to Article 45 of the Measures for the Administration of Reorganization, the offering price of shares issued by a listed company shall not be less than 90% of the market reference price as per the Measures for the Administration of Reorganization. The market reference price is one of the average transaction prices of the Company's shares for 20, 60 or 120 transaction days before the pricing ex-date. The market reference price is one of the average transaction prices of the Company's shares for 20, 60 or 120 transaction days before the base date for pricing. The average transaction prices are calculated using the following formula: Average transaction prices of the Company's shares for certain transaction days before the base date for pricing = total transaction amount of the Company's shares for certain transaction days before the announcement date of the resolution/total transaction volume of the Company's shares for certain transaction days before the announcement date of the resolution.

The pricing ex-date for the assets purchased by issuing shares is the announcement date of the Company's first board resolution on matters related to this transaction, i.e., the announcement date of the resolution of the 30th Meeting of the Fifth Board of Directors.

After calculation, the average transaction price of shares of the Listed Company for 20, 60, or 120 transaction days before the pricing ex-date of the assets purchased by issuing shares are as follows:

Unit: Yuan/share

After negotiation among the parties to this transaction, the offering price of the shares issued by the Listed Company for asset purchasing is determined as 18.27 yuan/share, which is not lower than 90% of one of the average transaction prices of the Listed Company's shares for 20, 60 or 120 transaction days before the base date for pricing.

During the period from the base date for pricing to the issue date of shares, if the Listed Company implements ex-right and ex-dividend matters such as dividend distribution, bonus issue, allotment of shares, and capitalization of surplus, the offering price will be adjusted accordingly. The specific adjustment methods for the offering price are as follows:

Assuming that the price of new shares before adjustment is P0, the number of bonus shares issued or shares after capitalization for every share is N, the number of new shares issued or shares allotted for every share is K, the price of new shares issued or shares allotted is A, the dividend per share is D, and the price of new shares after adjustment is P1 (the adjusted value is rounded to two decimal places), then:

If the dividend distribution is implemented, then:  

If the bonus issue or capitalization is implemented, then:           

If the issuance of new shares or allotment of shares is implemented, then:

If the above three items are implemented simultaneously, then:

Since the 2021 Annual Profit Distribution Plan has been reviewed and adopted at the general meeting of the Listed Company on 25 May 2022, the Listed Company has implemented ex-right and ex-dividend matters for the offering price of shares issued in the purchase of assets by issuing shares and paying cash. The offering price of shares issued in the purchase of assets by issuing shares after adjustment is 17.46 yuan/share. The final issue price has been approved by the CSRC.

3.   Investors to which the stocks are issued and the number of shares issued

The Listed Company will issue 460,961,213 shares, 230,480,606 shares, and 230,480,606 shares to CTG, YEIG, and SCEI respectively, in partial payment of the consideration for the Reorganization. The final number of shares to be issued will be subject to the final approval of the CSRC.

Note 1: The number of shares issued this time = Payment by issuing shares ÷ the adjusted offering price of 17.46 yuan/share and the effect of the profit distribution of the Listed Company for the year 2021 on the ex-rights and ex-dividend price of the issuance has been taken into account.

Note 2: The number of new shares acquired by the counterparties as calculated according to the above formula is rounded down to the nearest integer, and the part of less than one share is included in the capital surplus.

4.   Lockup period of shares

The consideration shares acquired by CTG through this transaction shall not be transferred within 36 months from the date of the end of the issuance of shares, except those assigned as permitted by applicable laws and regulations. If the closing price of the Listed Company's shares for 20 consecutive transaction days is lower than the offering price within 6 months after the completion of this transaction, or if the closing price is lower than the offering price at the end of 6 months after the completion of this transaction, the lockup period of the consideration shares acquired by CTG through this transaction will be automatically extended by 6 months on the basis of the original lockup period.

The consideration shares acquired by YEIG and SCEI through this transaction shall not be transferred within 12 months from the date of the end of the issuance of shares, except those assigned as permitted by applicable laws and regulations.

During the share lockup period after the completion of this transaction, the consideration shares obtained by the counterparties and the shares increased due to the Listed Company's bonus issue, converting equity capital, and other reasons will also be subject to the aforesaid share lockup arrangements. If the CSRC or Shanghai Stock Exchange had different opinions on the above-mentioned lockup period arrangement, this Company would adjust the above arrangement according to the CSRC's or Shanghai Stock Exchange's opinions thereon and have it executed.

IIITransfer of the underlying assets

On 10 January, 2023, the Kunming Administration for Market Regulation of Panlong District issued the Registration Notice and a new Business License to the Target Company. According to the Registration Notice and new Business License and other industrial and commercial change documents, on the date of this announcement, the Company has held 100% equity interest in the Yunchuan Company, the Yunchuan Company has become a wholly-owned subsidiary of CYPC.

IV Capital verification and share registration

1.   Capital Verification

According to the Capital verification report of CYPC (DHHZ [2023] No. 000028) issued by Dahua CPA, as of 10 January 2023, the Company has received a total of RMB 16,096,765,600.00 in equity contributions from CTG, YEIG, and SCEI, of which RMB 921,922,425.00 is included in "share capital". The changed of registered capital of the Listed Company is RMB 23,663,781,655.00 and the capital stock is RMB 23,663,781,655.00.

2.   Shares registration status

On 3 February 2023, the Shanghai Branch of China Securities Depository and Clearing Corporation issued the Certificate of Registration of Change of Securities, and the registration procedures for the additional shares issued by the Company for the purchase of assets were completed. The number of shares issued by the Company this time is 921,922,425 (shares with limited selling conditions in circulation), and the total number of the Company's shares after this issuance is 23,663,781,655.

VVerification opinions of the independent financial advisers and Legal adviser

1.   Independent financial advisers' verification opinion

CITIC Securities Co., Ltd. and Huatai United Securities Co., Ltd., the independent financial advisors of the Transaction, considered that:

"1. The implementation process of the Transaction has fulfilled the statutory decision-making, examination, and approval procedures, which follows the requirements of the Company Law, the Securities Law, the Measures for the Administration of Material Assets Reorganization and other relevant laws and regulations.

2. As of the date of this verification opinion, the industrial and commercial registration for the underlying assets transfer of this transaction have been completed. China Yangtze Power Co., Ltd. has directly held 100% equity interest in Yunchuan Company. The underlying assets transfer procedures are legal and effective.

3. As of the date of this verification opinion, the capital verification and registration procedures for the additional shares issued for the asset purchase of the transaction have been completed.

4. As of the date of this verification opinion, no material differences between the relevant actual situations and the information previously disclosed have been identified during the implementation of the Transaction.

5. As of the date of this verification opinion, during the implementation of the Transaction, the Listed Company has appointed Mr. Liu Haibo as the deputy general manager. Besides that, there was no change in directors, supervisors, or senior management of the Listed Company.

6. As of the date of this verification opinion, during the implementation of the Transaction, there is no situation in which the funds and assets of the Listed Company are occupied by the actual controller or other related parties for non-operational purposes, nor is there any situation in which the Listed Company provides guarantees for its actual controller and related parties.

7.  As of the date of this verification opinion, all the agreements signed and commitments made by parties to this transaction have been effectively performed or are being performed, and there has been no breach of the agreements or commitments.

8. There is no material legal impediment to the implementation of the subsequent matters of the Transaction provided that the relevant parties have fully performed their respective obligations in accordance with the relevant agreements signed and the relevant commitments made."

2.   Legal adviser's verification opinion

Beijing Zhonglun Law Firm, the legal adviser of the Transaction, considered that:

"1. The Transaction has obtained the necessary authorizations and approvals and has the legal conditions for implementation.

2. The procedures for transfer of the subject assets, capital verification, cash consideration payment and registration of additional shares for the issue of shares for the purchase of assets involved in this transaction have been completed.

3. During the implementation of the transaction, there is no material difference between the relevant actual situations and the information previously disclosed.

4. Since CYPC obtained the approval document from the CSRC for the transaction to the date of this legal opinion, there have been some changes in the senior management, and this change in personnel has fulfilled necessary procedures, and has not had a material adverse impact on the operation and management of CPYC.

5. The relevant agreements and commitments of the transaction have been effectively performed or are in the process of being performed, and there is no breach of agreements or commitments by the relevant parties.

6. The arrangement of the subsequent matters of this transaction complies with the relevant laws, regulations, normative documents, and the agreement related to this transaction, and there is no material legal impediment to the implementation of the subsequent matters under the circumstances that all parties perform in accordance with the law and the contract."

II.      Issuance Results and Counterparty Profile

(I)      Issuance results

(II)    Basic information of the Counterparty

(1)     Basic information about CTG

(2)     Basic information about YEIG

(3)     Basic information about SCEI

III.    Changes in the top ten shareholders of the Company before and after the Issuance

1. Shareholdings of the top ten shareholders of the Company before the Issuance

Before completion of this offering, the top ten shareholders of the Company at 31 January 2023 are shown in the table below:

2. Shareholdings of the top ten shareholders of the Company after the Issuance

Upon completion of the issuance, the top ten shareholders of the Company at 3 February 2023 are shown in the table below:

IV.    Impact of the Transaction on the equity structure of the Listed Company

Before the completion of the supporting financing after the purchase of assets by issuing shares, the shareholders' equity structure of the Listed Company is shown in the following table:

Note: The table above shows the number and proportion of shares held by each shareholder and the before issuing shares to purchase assets counted on 31 January 2023, and after issuing shares to purchase assets counted on 3 February 2023

Before the issuance, CTG was the controlling shareholder of the Listed Company and SASAC was the actual controller of the Listed Company. Upon completion of the Issuance (without considering the supporting financing), CTG remains the controlling shareholder of the Listed Company and SASAC remains the actual controller of the Listed Company.

V.     Discussion and Analysis of the Management

The transaction is conducive to promoting the Listed Company to enlarge and strengthen its hydropower business, highlighting the company's main business of hydropower and consolidating the company's status as a world hydropower giant. At the same time, joint dispatch capability of listed companies in the Yangtze River basin will be further enhanced. The impact of the transaction on the Company is detailed in the Report on Purchasing Assets by Issuing Shares and Paying Cash and Raising Subscription Funds as well as on Related Party Transaction by China Yangtze Power Co., Ltd. disclosed by the Company on the website of the Shanghai Stock Exchange (www.sse.com.cn) on 15 November 2022.

VI.    Information on intermediaries related to the Issuance

(I)      Independent financial adviser

1.   CITIC Securities Co., Ltd.

2.   Huatai United Securities Co., Ltd

(II) Legal Adviser

(III)   Audit Verification Agency

(IV)   Capital Verification Agency

(V) Asset Appraisal Institute

1.   China Enterprise Appraisals Co., Ltd.

2.   Beijing HuayuanLongtai Real Estate Assets Appraisal Co., Ltd.

VII.   Documents for inspection

1. the Reply on Approving China Yangtze Power Co., Ltd. to Purchase Assets and Raise Subscription Funds by Issuing Shares to China Three Gorges Corporation and Other Companies (ZJXK [2022] No. 2740) issued by the China Securities Regulatory Commission;

2. [Certificate of registration of change of securities] issued by the Shanghai Branch of the China Securities Depository and Clearing Corporation;

3. Verification opinion of independent financial adviser CITIC Securities Co., Ltd. on the transfer of the underlying assets of China Yangtze Power Co., Ltd. for issuing shares and paying cash to purchase assets and raise matching funds and related party transactions issued by CITIC Securities Co., Ltd.;

4. Verification opinion of independent financial adviser Huatai United Securities Co. Ltd. on the transfer of the underlying assets of China Yangtze Power Co., Ltd. for issuing shares and paying cash to purchase assets and raise matching funds and related party transactions issued by Huatai United Securities Co. Ltd.;

5. Legal opinion of Beijing Zhonglun Law Firm on the transfer of the underlying assets of China Yangtze Power Co., Ltd. for issuing shares and paying cash to purchase assets and raising matching funds and related party transactions issued by Beijing Zhonglun Law Firm;

6. Capital Verification Report of China Yangtze Power Co., Ltd. (DHYZ [2023] No. 000028) issued by Dahua Certified Public Accountants (Special General Partnership).

China Securities Journal, Shanghai Securities News, Securities Times, and the website (www.sse.com.cn) of the Shanghai Stock Exchange are the information disclosure media designated by the Company. All information of the Company shall be subject to the announcements published by the Company in the above media. Investors are kindly requested to make rational investments and pay attention to investment risks.

It is hereby announced.

Board of Directors of China Yangtze Power Co., Ltd.

8 February 2023