Sinopec Engineering Group Co Ltd. — Capital/Financing Update 2023

Apr 14, 2023

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 2023, the total value of new contracts for the three months ended 31 March 2023 and the backlog as at 31 March 2023.

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 2023, the total value of new contracts entered into by the Group amounted to RMB18.728 billion, representing a decrease of 40.3% as compared to RMB31.370 billion for the three months ended 31 March 2022. As at 31 March 2023, the backlog of the Group amounted to RMB119.494 billion, representing an increase of 6.5% as compared to RMB112.231 billion as at 31 December 2022.

• 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 March 2023, the total value of new contracts entered into by the Group amounted to RMB18.728 billion, and contracts that are representative are as follows:

1. several EPC contracts entered into with Sinopec Zhenhai Refining & Chemical Company in relation to multiple units of the Oil Refining and High-end Synthetic New Material Project with a total contract value of approximately RMB3.288 billion;

2. an EPC contract entered into with CNPC Jilin Petrochemical Company in relation to the ethylene unit of the refining and chemical transformation and upgrading project with a total contract value of approximately RMB3.173 billion; and

3. an EPC contract entered into with SINOPEC Changling Refining & Chemical Company in relation to the 1 million t/y continuous reforming unit, with a total contract amount of RMB873 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. Term of the uncompleted projects may extend, resulting which 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	of New
Contract Value				Backlog
For the three months ended
31 March 2023				As at 31 March 2023
_(RMB thousand) Percentage (%) _			(RMB thousand) Percentage				(%)
Business segments
Engineering, Consulting and Licensing 1,479,523		7.9		12,017,565			10.1
EPC Contracting 12,203,493		65.2		82,265,106			68.8
Construction 4,952,265		26.4		23,885,638			20.0
Equipment Manufacturing 92,830		0.5		1,326,145			1.1
Total 18,728,111		100.0		119,494,454		100.0
Industries in which the Group’s clients operate
Oil Refining 1,416,206		7.6		18,339,937			15.3
Petrochemical 15,142,250		80.9		67,681,229			56.7
New Coal Chemicals 108,412		0.5		2,039,087			1.7
Storage & Transportation and Others 2,061,243		11.0		31,434,201			26.3
Total 18,728,111		100.0		119,494,454		100.0
Regions
PRC 18,595,623		99.3		99,658,797			83.4
Overseas 132,488		0.7		19,835,657			16.6
Total 18,728,111		100.0		119,494,454		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 8,303,951		44.3		64,559,602			54.0
Non-Sinopec Group and its associates 10,424,160		55.7		54,934,852			46.0
Total 18,728,111		100.0		119,494,454		100.0

The Board wishes to emphasis 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.

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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 of the Board and Company Secretary

Beijing, the PRC 14 April 2023

As at the date of this announcement, the 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 Director

* Non-executive Director

+ Independent non-executive Director

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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