Sinopec Engineering Group Co Ltd. — Capital/Financing Update 2021

Feb 26, 2021

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 2020, the total value of the new contracts for the twelve months ended 31 December 2020 and the backlog as at 31 December 2020.

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 2020, the total value of new contracts entered into by the Group amounted to RMB63.014 billion, representing an increase of 20.4% as compared to RMB52.319 billion for the twelve months ended 31 December 2019. As at 31 December 2020, the backlog of the Group amounted to RMB105.655 billion, representing an increase of 11.2% as compared to RMB94.994 billion as at 31 December 2019.

• 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 2020, the total value of new contracts entered into by the Group amounted to RMB14.835 billion, and contracts that are representative are as follows:

1. Ten EPC contracts entered into with Zhenhai Refining & Chemical Branch of China Petroleum & Chemical Corporation (中國石油化工股份有限公司鎮海煉化 分公司) in relation to the ethylene facilities of the 15,000,000 tons/year refinery and 1,200,000 tons/year ethylene expansion project with a total contract value of approximately RMB6.649 billion;

2. an EPC contract entered into with Sinopec Tianjin LNG Co., Ltd.* (中石化天津 液化天然氣有限責任公司) in relation to Tianjin liquefied natural gas expansion project (phase II) receiving terminal project with a total contract value of approximately RMB3.183 billion; and

3. a construction contract entered into with Saudi Arabian Oil Company (Saudi Aramco) in relation to Berri field’s oil-field development project with a total contract value of approximately USD0.201 billion.

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 period or as at the date indicated:

	Total of New Contract	Total of New Contract	Total of New Contract	Total of New Contract
	Value
	For the twelve			months		Backlog
	ended 31 December 2020					As at 31 December 2020
	(RMB			Percentage		(RMB		Percentage
	thousand)			(%)		thousand)		(%)
Business segments
Engineering, Consulting and Licensing	4,046,963			6.4		8,636,102		8.2
EPC Contracting	37,138,017			58.9		76,223,009		72.1
Construction	21,154,013			33.6		20,003,498		18.9
Equipment Manufacturing	674,638			1.1		791,998		0.8
Total	63,013,631			100.0		105,654,607		100.0
Industries in which the Group’s clients operate
Oil Refining	14,566,521			23.1		30,826,320		29.2
Petrochemicals	28,626,388			45.4		27,071,948		25.6
New Coal Chemicals	1,837,419			3.0		11,582,761		11.0
Other Industries	17,983,303			28.5		36,173,578		34.2
Total	63,013,631			100.0		105,654,607		100.0
Regions
PRC	52,852,315			83.9		79,977,151		75.7
Overseas	10,161,316			16.1		25,677,456		24.3
Total	63,013,631			100.0		105,654,607		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	41,745,969			66.2		58,420,185		55.3
Non-Sinopec Group and its associates	21,267,662			33.8		47,234,422		44.7
Total	63,013,631			100.0		105,654,607		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, Company Secretary

Beijing, the PRC 26 February 2021

As at the date of this announcement, the executive Directors are SUN Lili, XIANG Wenwu, and JIANG Dejun; the non-executive Director is 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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