Sinopec Engineering Group Co Ltd. — Capital/Financing Update 2022

Feb 24, 2022

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 31 December 2021, the total value of the new contracts for the twelve months ended 31 December 2021 and the backlog as at 31 December 2021.

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 twelve months ended 31 December 2021, the total value of new contracts entered into by the Group amounted to RMB63.150 billion, representing an increase of 0.2% as compared to RMB63.013 billion for the twelve months ended 31 December 2020. As at 31 December 2021, the backlog of the Group amounted to RMB111.045 billion, representing an increase of 5.1% as compared to RMB105.654 billion as at 31 December 2020.

• 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 31 December 2021, the total value of new contracts entered into by the Group amounted to RMB14.069 billion, and contracts that are representative are as follows:

1. an EPC contract entered into with China Petroleum & Chemical Corporation Southwest Oil & Gas Branch (中國石油化工股份有限公司西南油氣分公司) in relation to the desulfurization station project of Leikoupo formation project in west Sichuan gas field with a total contract value of approximately RMB2.315 billion;

2. an EPC contract entered into with China Petroleum & Chemical Corporation Maoming Branch ( 中國石油化工股份有限公司茂名分公司 ) in relation to Bohe New Port to Maoming oil pipeline project with a total contract value of approximately RMB2.240 billion; and

3. a construction contract entered into with China National Offshore Oil Engineering Co., Ltd. (中國海洋石油工程股份有限公司) in relation to Longkou Nanshan LNG Phase I receiving terminal project with a total contract value of approximately RMB527 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	Contract Value	Backlog	Backlog
	For the twelve	months ended 31	As at
	December 2021		31 December 2021
	_(RMB thousand) Percentage (%) _		(RMB thousand) Percentage (%)
Business segments
Engineering, Consulting and Licensing	5,919,716	9.4	10,776,048	9.7
EPC Contracting	28,194,050	44.6	68,746,486	61.9
Construction	28,165,412	44.6	30,646,674	27.6
Equipment Manufacturing	870,892	1.4	875,969	0.8
Total	63,150,160	100.0	111,045,177	100.0
Industries in which the
Group’s clients operate
Oil Refining	10,621,260	16.8	28,305,346	25.5
Petrochemicals	31,018,691	49.2	25,478,004	22.9
New Coal Chemicals	777,522	1.2	11,006,628	9.9
Storage & Transportation and Others	20,732,687	32.8	46,255,199	41.7
Total	63,150,160	100.0	111,045,177	100.0
Regions
PRC	54,470,927	86.3	81,327,589	73.2
Overseas	8,679,233	13.7	29,717,588	26.8
Total	63,150,160	100.0	111,045,177	100.0
Clients of each of (i) Sinopec Group and
its associates and (ii) the non-Sinopec
Group and its associates
Sinopec Group and its associates	36,523,246	57.8	59,002,488	53.1
Non-Sinopec Group and its associates	26,626,914	42.2	52,042,689	46.9
Total	63,150,160	100.0	111,045,177	100.0

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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, Secretary to the Board, Company Secretary

Beijing, the PRC 24 February 2022

As at the date of this announcement, directors of the company are: SUN Lili[#] , XIANG Wenwu[#] , WANG Zizong[] , Li Chengfeng[] , WU Wenxin[*] , JIANG Dejun[#] , HUI Chiu Chung, Stephen[+] , JIN Yong[+] and YE Zheng[+] .

• # Executive Directors

• Non-executive Director

+ Independent non-executive Directors

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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