Datang Environment Industry Group Co., Ltd. — Capital/Financing Update 2016

Dec 9, 2016

Unless otherwise defined in this announcement, capitalized terms used in this announcement shall have the same meanings as those defined in the prospectus dated Thursday, November 3, 2016 (the “ Prospectus ”) issued by Datang Environment Industry Group Co., Ltd. (the “ Company ”).

This announcement is made pursuant to section 9(2) of the Securities and Futures (Price Stabilizing) Rules (Chapter 571W of the Laws of Hong Kong). This announcement is for information purposes only and does not constitute an offer or an invitation to induce an offer by any person to acquire, purchase or subscribe for securities.

This announcement does not constitute and is not an offer to sell or a solicitation of any offer to buy securities in the United States. The H Shares have not been, and will not be, registered under the United States Securities Act of 1933, as amended from time to time (the “ U.S. Securities Act ”) or any state securities laws of the United States. The securities may not be offered or sold in the United States except pursuant to an effective registration statement or in accordance with an available exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act. The Company has not intended and does not intend to make any public offer of securities in the United States.

Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited (the “ Hong Kong Stock Exchange ”) and Hong Kong Securities Clearing Company Limited take no responsibility for the contents of this announcement, 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 announcement.

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Datang Environment Industry Group Co., Ltd.* 大唐環境產業集團股份有限公司

(A joint stock company incorporated in the People’s Republic of China with limited liability)

(Stock Code: 1272)

PARTIAL EXERCISE OF THE OVER-ALLOTMENT OPTION, STABILIZING ACTIONS AND END OF STABILIZATION PERIOD

PARTIAL EXERCISE OF THE OVER-ALLOTMENT OPTION

The Company announces that the Over-allotment Option described in the Prospectus was partially exercised by the Joint Global Coordinators, on behalf of the International Underwriters, on December 8, 2016, in respect of an aggregate of 27,542,000 H Shares (the “ Over-allotment Shares ”), representing approximately 5.10% of the total number of the Offer Shares initially available under the Global Offering before any exercise of the Over-allotment Option to, among other things, cover over-allocations in the International Offering. The Over-allotment Shares will be issued and allotted by the Company at HK$3.78 per H Share (exclusive of brokerage of 1%, SFC transaction levy of 0.0027% and Hong Kong Stock Exchange trading fee of 0.005%), being the Offer Price per Offer Share under the Global Offering.

* For identification purposes only

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STABILIZING ACTIONS AND END OF STABILIZATION PERIOD

The Company further announces that the stabilization period in connection with the Global Offering ended on December 8, 2016, being the 30th day after the last day for the lodging of applications under the Hong Kong Public Offering. The stabilizing actions undertaken by CLSA Limited, as stabilizing manager (the “ Stabilizing Manager ”) during the stabilization period were:

• (1) over-allocations of an aggregate of 81,000,000 H Shares in the International Offering, representing approximately 15% of the total number of the Offer Shares initially available under the Global Offering before any exercise of the Over-allotment Option; and

• (2) successive purchases of an aggregate of 53,458,000 H Shares at a price in the range of HK$3.72 to HK$3.78 per H Share (exclusive of brokerage of 1%, SFC transaction levy of 0.0027% and Hong Kong Stock Exchange trading fee of 0.005%) on the market during the stabilization period, representing 9.90% of the Offer Shares initially offered under the Global Offering before any exercise of the Over-allotment Option. The last purchase made by the Stabilizing Manager on the market during the stabilization period was on December 8, 2016 at the price of HK$3.77 per H Share (exclusive of brokerage of 1%, SFC transaction levy of 0.0027% and Hong Kong Stock Exchange trading fee of 0.005%); and

• (3) the partial exercise of the Over-allotment Option by the Joint Global Coordinators, on behalf of the International Underwriters, on December 8, 2016, in respect of an aggregate of 27,542,000 H Shares, representing approximately 5.10% of the total number of the Offer Shares initially available under the Global Offering before any exercise of the Over-allotment Option, at the Offer Price per H Share, to facilitate the delivery to two cornerstone investors which have agreed to a delayed delivery of H Shares subscribed by them under their respective cornerstone investment agreements.

PARTIAL EXERCISE OF THE OVER-ALLOTMENT OPTION

The Company announces that the Over-allotment Option described in the Prospectus was partially exercised by the Joint Global Coordinators, on behalf of the International Underwriters, on December 8, 2016 in respect of an aggregate of 27,542,000 H Shares, representing approximately 5.10% of the Offer Shares initially available under the Global Offering before exercise of the Over-allotment Option.

The Over-allotment Shares will be issued and allotted by the Company at HK$3.78 per H Share (exclusive of brokerage of 1%, SFC transaction levy of 0.0027% and Hong Kong Stock Exchange trading fee of 0.005%), being the Offer Price per H Share under the Global Offering. The Over-allotment Shares will be used to, among other things, cover over-allocations in the International Offering.

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In accordance with relevant PRC regulations regarding the transfers of state-owned Shares, the H Shares converted from the Domestic Shares held by China Datang and Capital Holdings upon partial exercise of the Over-allotment Option (the “ Conversion ”), being 2,754,200 H Shares (representing 10% of the number of H Shares issuable by the Company pursuant to the partial exercise of the Over-allotment Option), will be held by NSSF. The above conversion of the Domestic Shares was made on a one-for-one basis into H Shares in accordance with relevant PRC regulations. The Company will not receive any proceeds from the Conversion.

Approval of Listing

Approval for the listing of and permission to deal in the Over-allotment Shares has already been granted by the Listing Committee of the Hong Kong Stock Exchange. Listing of and dealings in such Over-allotment Shares are expected to commence on the Main Board of the Hong Kong Stock Exchange at 9:00 a.m. on December 15, 2016.

Share Capital upon the Partial Exercise of Over-allotment Option

The shareholding structure of the Company immediately before and immediately after the completion of the partial exercise of the Over-allotment Option is as follows:

	Immediately before	Immediately before	Immediately after	Immediately after
	the partial	exercise of	the partial	exercise of
	the Over-allotment Option		the Over-allotment Option
		Approximate		Approximate
	Number of	percentage of	Number of	percentage of
	Shares	share capital	Shares	share capital
Domestic Shares	2,346,000,000	79.80%	2,343,245,800	78.96%
H Shares converted from
Domestic Shares and
transferred to NSSF	54,000,000	1.84%	56,754,200	1.91%
Other public shareholders	540,000,000	18.36%	567,542,000	19.13%

Use of Proceeds

The additional net proceeds of approximately HK$100 million to be received by the Company from the issue and allotment of the Over-allotment Shares after deducting the underwriting commissions and other estimated expenses in connection with the partial exercise of the Over-allotment Option, will be used by the Company for the purposes as set out in the section headed “Future Plans and Use of Proceeds — Use of Proceeds” in the Prospectus.

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STABILIZING ACTIONS AND END OF STABILIZATION PERIOD

The Company further announces that the stabilization period in connection with the Global Offering ended on December 8, 2016, being the 30th day after the last day for the lodging of applications under the Hong Kong Public Offering. The stabilizing actions taken by CLSA Limited, as stabilizing manager (the “ Stabilizing Manager ”) during the stabilization period were:

• (1) over-allocations of an aggregate of 81,000,000 H Shares in the International Offering, representing approximately 15% of the total number of the Offer Shares initially available under the Global Offering (before any exercise of the Overallotment Option); and

• (2) successive purchases of an aggregate of 53,458,000 H Shares at a price in the range of HK$3.72 to HK$3.78 per H Share (exclusive of brokerage of 1%, SFC transaction levy of 0.0027% and Hong Kong Stock Exchange trading fee of 0.005%) on the market during the stabilization period. The last purchase made by the Stabilizing Manager on the market during the stabilization period was on December 8, 2016 at the price of HK$3.77 per H Share (exclusive of brokerage of 1%, SFC transaction levy of 0.0027% and Hong Kong Stock Exchange trading fee of 0.005%); and

• (3) the partial exercise of the Over-allotment Option by the Joint Global Coordinators, on behalf of the International Underwriters, on December 8, 2016, in respect of an aggregate of 27,542,000 H Shares, representing approximately 5.10% of the total number of the Offer Shares initially available under the Global Offering before any exercise of the Over-allotment Option, at the Offer Price per H Share, to facilitate the delivery to two cornerstone investors which have agreed to a delayed delivery of H Shares subscribed by them under their respective cornerstone investment agreements.

PUBLIC FLOAT

The Hong Kong Stock Exchange has granted the Company, a waiver that the minimum public float requirement under Rule 8.08(1) of the Rules Governing the Listing of Securities on the Hong Kong Stock Exchange (the “ Hong Kong Listing Rules ”) be reduced and the minimum percentage of the H Shares from time to time held by the public to be the highest of:

• (a) 15% of the issued share capital of the Company (assuming the Over-allotment Option is not exercised);

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• (b) such percentage of H Shares to be held by the public immediately after completion of the Global Offering (assuming the Over-allotment Option is not exercised); or

• (c) such percentage of H Shares to be held by the public if the Over-allotment Option is exercised.

Immediately after the issue and allotment of the Over-allotment Shares, the number of H Shares in public hands represents not less than 21.04% of the total issued share capital of the Company which satisfies the minimum percentage prescribed in the conditions imposed in the waiver granted by the Hong Kong Stock Exchange from strict compliance with Rule 8.08(1) of the Hong Kong Listing Rules.

By order of the Board of Directors Datang Environment Industry Group Co., Ltd.* Jin Yaohua Chairman

Beijing, December 9, 2016

As of the date of this announcement, the non-executive Directors are Mr. Jin Yaohua, Mr. Liu Chuandong, Mr. Liu Guangming and Mr. Liang Yongpan, the executive Directors are Mr. Deng Xiandong and Mr. Lu Shengli, and the independent non-executive Directors are Mr. Ye Xiang, Mr. Mao Zhuanjian and Mr. Gao Jiaxiang.

• For identification purposes only

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