GOLDWIND SCIENCE&TECHNOLOGY CO., LTD. — Capital/Financing Update 2012

Oct 26, 2012

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong 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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DISCLOSEABLE TRANSACTION

The Board hereby announces that on 26 October 2012, the Company entered into the Equity Transfer Agreement with YXEE in connection with transfer of an 80% equity interest in Xi’an Goldwind. The cash consideration for such transfer is approximately RMB64.80 million. Following Completion, Xi’an Goldwind will cease to be a subsidiary of the Company.

As the relevant percentage ratios applicable to the transaction exceed 5% but are less than 25%, the equity transfer contemplated under the Equity Transfer Agreement constitutes a discloseable transaction for the Company under the Listing Rules and is subject to the reporting and announcement requirements under the Listing Rules, but exempt from independent shareholders’ approval requirements.

A. TRANSFER OF EQUITY INTERESTS

1. The Equity Transfer Agreement

Date

26 October 2012

Parties

The Company (as vendor) YXEE (as purchaser)

Equity Interest to be transferred

The Company intends to sell, and YXEE intends to purchase an 80% equity interest of Xi’An Goldwind (the “ Target Equity ”) pursuant to the terms and conditions of the Equity Transfer

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Agreement.

Xi’an Goldwind is a PRC incorporated limited company established in May 2008 with a registered and paid-up capital of RMB60,000,000. As of the date of this announcement, Xi’an Goldwind is a wholly-owned subsidiary of the Company. Its primary business is R&D, manufacturing and sales of large-scale WTGs and components, equipment installations and technology development, consulting and transferring.

According to Xi’an Goldwind’s audited reports which were prepared in accordance with the PRC generally accepted accounting principles, as of 31 March 2012, the book value of its net assets was RMB73.75 million. Based on the valuation as at 31 March 2012 conducted by an independent valuer qualified in the PRC using an asset based approach, the appraised value of the net assets of Xi’an Goldwind is approximately RMB80.75 million.

The following financial information is extracted from the audited financial statements of Xi’an Goldwind prepared in accordance with the PRC generally accepted accounting principles:

	For the year ended 31 December	For the year ended 31 December
	Million RMB
	2011	2010
	(audited)	(audited)
Revenue	1,267.55	1,582.46
Net profit before taxation and extraordinary items	92.67	151.54
Net profit after taxation and extraordinary items	90.32	145.92

Consideration

A cash consideration of approximately RMB64.80 million (the “ Consideration ”) is payable in a lump sum within 15 days upon entering into the Equity Transfer Agreement.

The Consideration was arrived after arms’ length negotiations between the parties by reference to, inter alia, the appraised value of the net assets of Xi’an Goldwind as stated above. Upon completion of the transfer of the Target Equity, a gain of approximately RMB5.80 million, on the basis of the net assets of Xi’an Goldwind as at 31 March 2012 and subject of audit, is expected to accrue to the Company. The Company intends to apply the sale proceeds to its working capital.

Completion

No condition precedent is required for Completion of the sale and purchase of the Target Equity. Currently, the Completion is expected to take place by the end of 2012. Following Completion, Xi’an Goldwind will cease to be a subsidiary of the Company.

2. Benefits of and Reasons for the transfer of the Assets

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This transaction will allow the Company to better adapt and strengthen its competitive advantages in the industry, and improve its profitability. The other party of this transaction, YEXX, is a wholly-owned subsidiary of China CNR Corporation Limited, which is a large WTG manufacturing company in the PRC. Through this cooperation with YEXX, both parties may concentrate on their respective comparative advantages, increase net efficiency, and improve the Company’s competitiveness.

The terms of the Equity Transfer Agreement (including the Consideration) were negotiated on an arm’s length basis between YXEE and the Company. The Directors, including the independent non-executive Directors, are of the opinion that the Equity Transfer Agreement is entered into on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole.

3. Further information about the parties

The Company is a leading manufacturer of wind turbine generators and provider of complete wind power solutions in China. Its primary business is wind turbine generator research and development, manufacturing and sales. The Company is also engaged in the provision of comprehensive wind power services and the development of wind farms for sale to wind farm operators and investors.

YXEE is a wholly-owned subsidiary of China CNR Corporation Limited. Its primary business is design, manufacturing and sales of the electrical transmission systems in multiple fields.

4. Listing rule implications

To the best of the Director’s knowledge, information and belief having made all reasonable enquiries, YXEE and its beneficial owners are independent of the Company and its connected persons as defined under the Listing rules. As the relevant percentage ratios applicable to the transaction exceed 5% but are less than 25%, the equity transfer contemplated under the Equity Transfer Agreement constitutes a discloseable transaction for the Company under the Listing Rules and is subject to the reporting and announcement requirements under the Listing Rules, but exempt from independent shareholders’ approval requirements.

B. DEFINITIONS

In this announcement, the following expressions have the meanings set out below unless the context requires otherwise.

“Board”	the board of Directors of the Company;
“Company”	新疆金風科技股份有限公司(Xinjiang Goldwind Science & TechnologyCo., Ltd.), a joint stock limited company incorporated in the PRC with its Hshares listed and traded on the main board of the Stock Exchange;
“Completion”	completion of the transfer of the Target Equitybythe Companyto YXEE

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	pursuant to the terms and conditions of the Equity Transfer Agreement;
“Directors”	the directors of the Company;
“Equity	the sale and purchase agreement dated 26 October 2012 and entered into
Transfer	between the Company as vendor and YXEE as purchaser in respect of the
Agreement”	sale and purchase of an 80% equity interest of Xi’an Goldwind;
“H shares”	foreign shares in the share capital of the Company, with par value of
	RMB1.00 each, which are listed and traded on the Stock Exchange;
“Listing Rules”	the Rules Governing the Listing of Securities on The Stock Exchange of
	Hong Kong Limited;
“PRC”	the People’s Republic of China (for the purpose of this announcement,
	excluding Hong Kong Special Administrative Region, Macau Special
	Administrative Region and Taiwan);
“RMB”	Renminbi, the lawful currency of the PRC;
“Xi’anGoldwind”	西安金風風電設備有限公司(Xi’an Goldwind Wind Power EquipmentManufacture Co., Ltd.), a limited liability company incorporated in the PRC;
“Shareholders”	the shareholders of the Company;
“Stock	The Stock Exchange of Hong Kong Limited; and
Exchange”
“YXEE”	永濟新時速電機電器有限責任公司(Yongji Xinshisu Electric Equipment
	CO., Ltd.), a limited liabilitycompanyincorporated in the PRC.

By order of the Board

Xinjiang Goldwind Science & Technology Co., Ltd. Ma Jinru Company Secretary

Beijing, 26 October 2012

As at the date of this announcement, the executive directors of the Company are Mr. Wu Gang and Mr. Wang Haibo; the non-executive directors are Mr. Li Ying, Ms. Hu Yang and Ms. Ji Dongmei; and the independent non-executive directors are Mr. Wang Yousan, Mr. Shi Pengfei and Dr. Tin Yau Kelvin Wong.

* For identification purpose only

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