Stock Code: 200771 Stock ID: Hangqilun B Announcement No. 2016-11
Announcement on the progress of major Events and Resumption of
Hangzhou Steam Turbine Co., Ltd.
The members of the Board and the Company acknowledge being responsible for the truthfulness,
accuracy, and completeness of the announcement. Not any false record, misleading statement or
significant omission carried in this announcement.
As the company’s controlling shareholder- Hangzhou Steam Turbine Power Group Co.,Ltd.
(“Steam turbine Group”)planned to conduct the mixed ownership reform, the company had
conducted the continuous trading suspension of its shares since May 29, 2015. According to the
Resolution of Postponing the Resuming of Share Trading examined and adopted in the 2015 first
provisional general meeting, and by the company’s application submitted to Shenzhen Stock
Exchange, the company’s share trading shall be resumed on the morning of the day of March 4,
2016.
Hint of major risks:
As of now, there are uncertain items of the mixed ownership reform conducted by the
Steam Turbine Group as below:
1) The assets and business scope of the mixed ownership reform conducted by the Steam
Turbine Group have not been determined;
2) The proportion of the transfer of state-owned share by the Steam Turbine Group and the
share holding structure of the new introduced investors have not been determined;
3) The staff placement involved in the mixed ownership reform and the relevant rights
disposal items have not been approved by the workers congress;
4) There are uncertainties that whether the mixed ownership reform will be approved by
the superior state-owned asset management department and whether it will pass the
audit by the relevant titled management institutes.
In light of that there are uncertainties about the mixed ownership reform conducted by the
Steam Turbine Group, please timely note the company’s relevant announcements and
being aware of the investment risks, cautiously and rationally doing your investment.
For Hangzhou Steam Turbine Co., Ltd.(“HTC”) , the holding shareholder of the Company, is
planning a major project, the Company has applied to Shenzhen Stock Exchange to suspend
trading of the stock on May 29, 2015(Friday) (Stock Code: 200771 Stock ID: Hangqilun B). This
was announced by the Company titled Announcement of Suspension of Stock Trading for Major
Project on Planning by Holding Shareholder (2015-33). Henceforth, the Company will disclose
announcement of major issues progress every 5 trading day.
I. Statement On Progress of Major Issues
The announcement (2015-62) of the Company published on August 28 disclosed that Steam
Turbine Group is arranging Steam Turbine Group Mixed Ownership Reform according to the
unified deployment of Hangzhou SASAC.
The concrete content of the mixed ownership reform: Via Hangzhou Property Trading
Platform, fairly and openly transfers the state-owned shares, and draw strategic investors in,
and the Steam Turbine Group, previously a wholly state-owned company, shall be changed to
a mixed ownership company controlled by private capital and being partly state-owned, and
the minority share holders include the management team and backbone staff. By this reform,
the institutionally system and mechanism that restrict the company’s development will be
completely solved, which shall enhance the company’s market competitiveness.
As the mixed ownership reform involved a very wide scope and strongly related to the
policies, currently, Hangzhou SASAC is negotiating and communicating with the Steam
Turbine Group of the implemental plan.
During the trade suspension period, Hangzhou Municipal People's Government
formally replied to Hangzhou SASAC in late August 2015 that the Steam Turbine Group was
approved to carry out the reform of mixed ownership. The base date for financial audit and
assets evaluation of the Steam Turbine Group under the mixed ownership reform determined
by Hangzhou SASAC is Apr 30, 2015. In September, Hangzhou SASAC confirmed the
intermediary agency through public bidding. In October, the intermediary agency audited and
evaluated the total asset and financial status of the Steam Turbine Group, and the whole
evaluation work completed in December, 2015. Currently, Hangzhou SASAC is negotiating and
communicating with the Steam Turbine Group on major issues, such as asset stripping.
II．Information about the subsequent work pertaining to the major event
There are works as below need to be proceeded for the completion of the mixed
ownership reform:
（1）Hangzhou SASAC and the Steam Turbine Group still need to negotiate and communicate
with each other on material issues to finalize the implemental plan；
（2）The confirmation of the mixed ownership reform by Hangzhou SASAC，the price of the
public transfer of state-owned shares；
（3）The work of publicly listing the state-owned shares for transferring on the Hangzhou
Property Trading Platform；
（4）The Steam Turbine Group will hold a workers congress to examine and adopt the mixed
ownership reform;
（5）The strategic investors shall bid the state-owned equity through Hangzhou Property Trading
Platform；
（6）Hangzhou SASAC shall report the implementing situation of the mixed ownership reform by
the Steam Turbine Group；
（7）The results of the mixed ownership reform approved and confirmed by the relevant
department.
III．Influence of the major event
The mixed ownership reform conducted by the Steam Turbine Group involves a major
reform of institutionally system and mechanism. The company is the largest-scale subsidiary
by share-holding in all the subsidiaries of the manufacturing of the Steam Turbine Group, and
in the process of this mixed ownership reform, the core business and assets of the industrial
sector of the Steam Turbine Group shall be concluded in the reform. Hence, the company’s
management structure and operation mechanism shall be significantly influenced after the
majority shareholder and share-holding structure were changed. In the future, along with the
implementation of the mixed ownership reform, the company will be changed to a private
capital controlled company from a state capital controlled company, therefore the company’s
business philosophy, strategic objective, operational mechanism and management system
will likely to face an unprecedented change. Currently, the company situated in a severe
industrial environment, yet there are many uncertainties that whether the company can fully
motivate the involved internal parties of the company and the involved outer parties in the
mixed ownership reform, fully inspire the reformed system’s internal vigor, speed up the
process of strategic transformation of the company and further use the resources of the
capital market to promote the company’s development, which may have a significant impact
on the company’s future development.
IV. Arrangement of resuming the company’s share trading
On December 4, 2015, the Company convened the first provisional shareholders’ General
meeting in 2015, after the attended shareholders and the shareholder representatives examined and
adopted the Proposal on Extending of Suspending Period of the Company’s Stock Trading through
live voting and network voting. According to the deliberation result of the shareholders’ meeting,
and after the Company apply to Shenzhen Stock Exchange, the Company’s shares will be resumed
after the first trading day of the shareholder’s meeting, which is before March 4, 2016，According
to the listing rules and the relevant resolutions of the general meeting of shareholders, the
company’s stock opening date for resumption trading on March 4, 2016.
After the resuming of share trading, as to the subsequent workings of the mixed
ownership reform, the company shall fulfill its obligations of information disclosure
according to the relevant regulations, please note the relevant announcements issued by the
company.
V．Hint of the uncertainties and relevant risks of the major event
As of now, there are uncertain items of the mixed ownership reform conducted by the
Steam Turbine Group as below:
1. The evaluation of the total assets of the Steam Turbine Group was completed, and
Hangzhou SASAC was conferring with the Steam Turbine Group on asset stripping, yet the
assets and business scope involved in the mixed ownership reform were not formally
confirmed. Therefore, there are uncertainties about the final price of the transferring assets
listed on the property trading market.
2. Through this reform, the Steam Turbine Group, previously a wholly state-owned company,
shall be changed to a mixed ownership company controlled by private capital and being
partly state-owned, and the minority share holders include the management team and
backbone staff. Therefore, in the future, there are uncertainties about the management
structure and operation mechanism of the Steam Turbine Group after reformed.
3. The staff placement involved in the mixed ownership reform and the relevant rights
disposal items have not been confirmed, and there are uncertainties that whether such items
can be approved in the workers congress.
4. The reform involves the Steam Turbine Group’s state-owned equity transfer and its
majority shareholder alteration, and the implementation of the mixed ownership reform
needed to be approved by the superior state-owned asset management department and
relevant titled management institutes.
In summary, yet the mixed ownership reform conducted by the Steam Turbine Group has a large
extent of uncertainty, hereby, please be aware of the investment risks.
This announcement is hereby made.
The Board of Directors of Hangzhou Steam Turbine Co., Ltd.
March 4, 2016
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