Sinopec Engineering Group Co Ltd. — Capital/Financing Update 2019

Oct 15, 2019

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 on certain information in connection with the representative new contracts entered into by the Group for the three months ended 30 September 2019, the total value of the new contracts for the nine months ended 30 September 2019 and the backlog as at 30 September 2019.

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 on the following information.

During the nine months ended 30 September 2019, the total value of new contracts entered into by the Group amounted to RMB40.813 billion, representing a decrease of 3.2% as compared to RMB42.158 billion for the nine months ended 30 September 2018. As at 30 September 2019, the backlog of the Group amounted to RMB98.894 billion, representing an increase of 4.2% as compared to RMB94.935 billion as at 31 December 2018.

* For identification purposes only

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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 30 September 2019, the total value of new contracts entered into by the Group amounted to RMB7.594 billion, and contracts that are representative are as follows:

1. a contract of engineering, procurement and construction (EPC) entered into with Sinopec Beihai Refinery and Petrochemical Co., Ltd.* (中國石化北海煉化有限 責任公司) in relation to the structure adjustment and transformation project of Beihai refinery relocation and renovation petrochemical project (200,000 tons/year of polypropylene) with a contract value of approximately RMB709 million;

2. an EPC contract entered into with Sinopec Tianjin Liquefied Natural Gas Co., Ltd.* (中石化天津液化天然氣有限責任公司) in relation to its LNG terminal gasification external transmission and capacity expansion project with a contract value of approximately RMB629 million;

3. a construction contract entered into with China Petroleum Pipeline Engineering Co., Ltd.* (中國石油管道局工程有限公司) in relation to the Saudi Aramco’s piping installation work (Hawiyah Area) for NGCP (North Gas Compression Plants) project with a contract value of approximately RMB112 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 nonSinopec Group and its associates during the period or as at the date indicated:

	Total of New	Total of New	Total of New
	Contract Value
	For the nine months				Backlog
	ended 30 September				As at
	2019				30 September		2019
	(RMB		Percentage		(RMB	Percentage
	thousand)			(%)	thousand)		(%)
Business segments
Engineering, Consulting
and Licensing	2,087,308			5.11	8,422,220		8.52
EPC Contracting	26,581,961			65.13	77,172,248		78.04
Construction	11,092,183			27.18	11,932,488		12.07
Equipment Manufacturing	1,051,892			2.58	1,367,163		1.37
Total	40,813,344		100.00		98,894,119		100.00
Industries in which the Group’s clients operate
Oil Refining	11,640,411			28.52	31,912,317		32.27
Petrochemical	17,952,459			43.99	29,329,345		29.66
New Coal Chemicals	4,844,253			11.87	12,093,899		12.23
Other Industries	6,376,221			15.62	25,558,558		25.84
Total	40,813,344		100.00		98,894,119		100.00
Regions
PRC	38,099,068			93.35	81,154,529		82.06
Overseas	2,714,276			6.65	17,739,590		17.94
Total	40,813,344		100.00		98,894,119		100.00
Clients of each of (i) Sinopec Group and its associates and (ii) the					non-Sinopec
Group and its associates
Sinopec Group and its associates	25,847,830			63.33	54,640,843		55.25
Non-Sinopec Group and
its associates	14,965,514			36.67	44,253,276		44.75
Total	40,813,344		100.00		98,894,119		100.00

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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. Jia Yiqun Chief Financial Officer, Company Secretary

Beijing, the PRC 15 October 2019

As at the date of this announcement, the executive Directors are LU Dong, XIANG Wenwu, SUN Lili (employee representative Director) and ZHOU Yingguan (employee representative Director); the nonexecutive Directors are YU Baocai and WU Wenxin; 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).

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