Sinopec Engineering Group Co Ltd. — Capital/Financing Update 2015

Feb 16, 2015

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 December 2014, the total value of the new contracts for the twelve months ended 31 December 2014 and the backlog as at 31 December 2014. The relevant information shall be subject to the information disclosed in the annual report of the Company for the year ended 31 December 2014.

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. The relevant information shall be subject to the information disclosed in the annual report of the Company for the year ended 31 December 2014.

• For identification purpose only.

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During the twelve months ended 31 December 2014, the total value of new contracts entered into by the Group amounted to RMB60.700 billion, representing a decrease of 14.0% as compared to RMB70.589 billion [Note] for the twelve months ended 31 December 2013. As at 31 December 2014, the backlog of the Group amounted to RMB103.922 billion, representing an increase of 12.27% as compared to RMB 92.568 [Note] billion as at 31 December 2013.

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 2014, the total value of new contracts entered into by the Group amounted to RMB12.777 billion, and contracts that are representative are as follows:

1. several EPC contracts regarding 1.7 million tons per annum coal to methanol and olefin project with ZhongAn LianHe Coal Chemical Co., Ltd. (中安聯合煤業化 工有限公司), with a total value of approximately RMB4.779 billion. For details, please refer to the announcement of the Company dated 24 November 2014;

2. an EPC contract for process units of a propylene oxide project with Nanjing Jinling Huntsman New Materials Co., Ltd. (南京金陵亨斯邁新材料有限責任公 司), with a contract value of approximately RMB840 million;

3. an EPC contract for process units of a 3,000 tons per annum SMTO catalyst project with Nanjing Branch of Sinopec Catalyst Company (中國石化股份有限 公司催化劑南京分公司), with a contract value of approximately RMB540 million; and

4. a construction contract for MEI package in a polyoxymethylene project in Saudi Arabia with INTECSA INDUSTRIA, with a contract value of US$55.5 million (i.e. approximately RMB340 million).

5. Note: The contract value of a terminated EPC contract between Kazakhstan Petrochemical Industries and the Company has been excluded from such amount. Please refer to the announcement entitled “Termination of an EPC Contract with KPI Company” published by the Company on 14 August 2014 for more details.

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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.

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

	**Total of **	New
	**Contract **	Value
	For the twelve months		Backlog
	ended 31 December 2014		As at 31 December 2014
	(RMB	Percentage	(RMB	Percentage
	thousand)	(%)	thousand)	(%)
Business segments
Engineering, Consulting
and Licensing	4,109,902	6.8%	6,514,745	6.3%
EPC Contracting	38,172,858	62.9%	82,079,668	79.0%
Construction	18,299,071	30.1%	15,191,362	14.6%
Equipment Manufacturing	118,059	0.2%	136,508	0.1%
Total	60,699,890	100.0%	103,922,283	100.0%

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Total of New

Contract Value

	Total of New Contract Value	Total of New Contract Value	Total of New Contract Value
	For the twelve months			Backlog
	ended 31 December 2014			As at 31 December 2014
	(RMB	Percentage		(RMB	Percentage
	thousand)		(%)	thousand)		(%)
Industries in which the Group’s clients operate
Oil Refining	17,894,394		29.5%	26,639,953		25.6%
Petrochemical	12,336,104		20.3%	23,600,743		22.7%
New Coal Chemicals	23,040,511		38.0%	47,261,719		45.5%
Other Industries	7,428,881		12.2%	6,419,869		6.2%
Total	60,699,890	100.0%		103,922,283		100.0%
Regions
PRC	49,249,344		81.1%	77,288,816		74.4%
Overseas	11,450,546		18.9%	26,633,467		25.6%
Total	60,699,890	100.0%		103,922,283		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	24,234,279		39.9%	41,346,352		39.8%
Non-Sinopec Group and
its associates	36,465,611		60.1%	62,575,932		60.2%
Total	60,699,890	100.0%		103,922,283		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 .

Yours faithfully, By order of the Board SINOPEC ENGINEERING (GROUP) CO., LTD. SANG Jinghua

Vice President and Secretary to the Board

Beijing, PRC 16 February 2015

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

This announcement will be 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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