Sinopec Engineering Group Co Ltd. — Capital/Financing Update 2017

Apr 18, 2017

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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中石化煉化工程（集團）股份有限公司 SINOPEC Engineering (Group) Co., Ltd.*

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

(Stock Code: 2386)

VOLUNTARY ANNOUNCEMENT

TOTAL NEW CONTRACT VALUE AND BACKLOG

This announcement is made voluntarily by SINOPEC Engineering (Group) Co., Ltd. (the “ Company ”, together with its subsidiaries, the “ Group ”). The board of directors of the Company (the “ Board ”) is pleased to update shareholders of the Company and potential investors with certain information in connection with the representative new contracts entered into by the Group for the three months ended 31 March 2017, the total value of the new contracts for the three months ended 31 March 2017 and the backlog as at 31 March 2017.

This announcement is made by the order of the Board. The Board collectively and individually accepts responsibility for the accuracy of this announcement.

Shareholders of the Company and potential investors are advised to exercise caution when dealing in the shares of the Company.

This announcement is made voluntarily by the Company. The Board is pleased to update shareholders of the Company and potential investors the following information.

During the three months ended 31 March 2017, the total value of new contracts entered into by the Group amounted to RMB5.799 billion, representing an increase of 33.07% as compared to RMB4.358 billion for the three months ended 31 March 2016. As at 31 March 2017, the backlog of the Group amounted to RMB88.578 billion, representing an increase of 0.46% as compared to RMB88.173 billion as at 31 December 2016.

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New Contract Value and Backlog

Representative New Contracts

New contract value represents the value of the contracts the Group entered into during a specified period. The value of a contract is the amount that the Group expects to receive under the terms of the contract if the contract is performed in accordance with its terms. During the three months ended 31 March 2017, the total value of new contracts entered into by the Group amounted to RMB5.799 billion, and contracts that are representative are as follows:

1. a number of contracts entered into with Hengli Petrochemical (Dalian) Refining Co., Ltd.* (恒力石化(大連)煉化有限公司) in relation to the refining-chemical integration project in Dalian with a capacity of 20 million tons per annum. The total contract value is approximately RMB2.201 billion;

2. an engineering, procurement and construction (EPC) contract entered into with SINOPEC Jinan Company* (中國石油化工股份有限公司濟南分公司) in relation to the oil refining restructuring and quality upgrade project in Jinan for its catalytic cracking unit. The total contract value is approximately RMB680 million; and

3. an EPC contract entered into with SINOPEC Great Wall Energy and Chemical (Ningxia) Co., Ltd.* (中國石化長城能源化工(寧夏)有限公司) in relation to the synthetic gas debottlenecking and acetic acid gap-filling project in Ningxia. The total contract value is approximately RMB358 million.

Backlog

Backlog represents the total estimated contract value of work that remains to be completed pursuant to outstanding contracts as at a certain date, net of estimated value added tax and is based on the Group’s assumption that the relevant contracts will be performed in accordance with their terms. Backlog is not a measure defined by generally accepted accounting principles. Any modification, termination or suspension of these contracts by the Group’s clients may have a substantial and immediate effect on the Group’s backlog. Projects may also remain in the Group’s backlog for an extended period of time beyond what was initially anticipated due to various factors beyond the Group’s control.

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The table below sets out the details of the total value of new contracts entered into by the Group and its backlog categorised by (1) business segments; (2) the industries in which the Group’s clients operate; (3) regions; and (4) clients of each of (i) China Petrochemical Corporation (“ Sinopec Group ”) and its associates and (ii) the non-Sinopec Group and its associates during the periods or as at the date indicated:

	Total of New Contract Value	Total of New Contract Value	Total of New Contract Value	Backlog
	For the three months			As at
	ended 31 March 2017			31 March 2017
	(RMB	Percentage		(RMB Percentage
	thousand)	(%)		thousand)	(%)
Business segments
Engineering,
Consulting and
Licensing	634,100		10.94	7,187,269		8.11
EPC Contracting	1,700,665		29.33	68,193,239		76.99
Construction	3,462,276		59.70	13,079,822		14.77
Equipment
Manufacturing	1,770		0.03	117,514		0.13
Total	5,798,811	100.00		88,577,844	100.00
Industries in which the Group’s clients operate
Oil Refining	1,588,273		27.39	31,950,499		36.07
Petrochemical	3,079,683		53.11	19,048,137		21.50
New Coal Chemicals	111,292		1.92	19,259,921		21.75
Other Industries	1,019,563		17.58	18,319,287		20.68
Total	5,798,811	100.00		88,577,844	100.00
Regions
PRC	5,727,809		98.78	58,156,677		65.66
Overseas	71,002		1.22	30,421,167		34.34
Total	5,798,811	100.00		88,577,844	100.00

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Total of New Contract Value		Backlog
For the three months		As at
ended 31 March 2017	**31 **	March 2017
(RMB Percentage	(RMB	Percentage
thousand) (%)	thousand) (%)

Clients of each of (ii) Sinopec Group and its associates and (ii) the non-Sinopec Group and its associates

Sinopec Group and its associates Non-Sinopec Group and its associates Total	2,683,540 3,115,271 5,798,811	46.28 53.72 100.00	38,926,949 49,650,895 88,577,844	43.95 56.05
				100.00

The Board wishes to emphasise that the above information in relation to the representative new contracts, the total value of new contracts and backlog shall not constitute any forecast or prediction of the profits of the Group.

This announcement is made by the order of the Board. The Board collectively and individually accepts responsibility for the accuracy of this announcement.

Shareholders of the Company and potential investors are advised to exercise caution when dealing in the shares of the Company .

By order of the Board

SINOPEC ENGINEERING (GROUP) CO., LTD. SANG Jinghua

Vice President, Secretary to the Board

Beijing, the PRC 18 April 2017

As at the date of this announcement, the Company’s executive directors are LU Dong, XIANG Wenwu, SUN Lili (employee representative director) and WU Derong (employee representative director); the non-executive directors are LING Yiqun and LI Guoqing; and the independent non-executive directors are HUI Chiu Chung, Stephen, JIN Yong and YE Zheng.

This announcement is available on the website of Hong Kong Exchanges and Clearing Limited (www.hkex.com.hk) and on the website of the Company (www.segroup.cn).

* For identification purposes only

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