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1 C 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.

DISCLOSEABLE TRANSACTION AND CONNECTED TRANSACTIONS: MERGERS OF DONGFANG INVESTMENT DEVELOPMENT AND DE PLANT MERGERS The Board announces that on

30 October 2018, the subsidiaries of the Company, Dongfang Turbine Company and Dongfang Electric Machinery Company entered into the Dongfang Investment Development Merger Agreement and DE Plant Merger Agreement with the subsidiaries of Dongfang Electric Corporation, Dongfang Investment Development and DE Plant, respectively. According to the Merger Agreements, Dongfang Turbine Company will merge with Dongfang Investment Development and Dongfang Electric Machinery Company will merge with DE Plant. Dongfang Turbine Company and Dongfang Electric Machinery Company will be the surviving companies after the Completion of Mergers and inherit the assets, liabilities, business, personnel, contracts and rights and obligations of Dongfang Investment Development and DE Plant, respectively, and Dongfang Investment Development and DE Plant will cancel their legal status. Upon the Completion of Mergers, Dongfang Turbine Company and Dongfang Electric Machinery Company are no longer wholly-owned subsidiaries of the Company, the Company will hold 95.45% and 92.23% interests of Dongfang Turbine Company and Dongfang Electric Machinery Company, respectively. C

2 C IMPLICATIONS OF THE LISTING RULES As the highest percentage ratio applicable to the Mergers is more than 5% but less than 25%, the Mergers constitute a discloseable transaction under Chapter

14 of the Listing Rules and is subject to the reporting and announcement requirements of the Listing Rules. Further, Dongfang Electric Corporation is a substantial shareholder of the Company and holds approximately 55.91% of the entire issued shares of the Company. Dongfang Investment Development and DE Plant are wholly-owned subsidiaries of Dongfang Electric Corporation and are associates of Dongfang Electric Corporation (as defined under the Listing Rules). Dongfang Electric Corporation, Dongfang Investment Development and DE Plant are connected persons of the Company as defined under the Listing Rules. Accordingly, the Mergers also constitute connected transaction of the Company under Chapter 14A of the Listing Rules. As all of the relevant percentage ratios (other than the profits ratio) applicable to the Merger Agreements are more than 0.1% but less than 5%, in accordance with Rule 14A.76(2)(a) of the Listing Rules, the Mergers are subject to the reporting and announcement requirements, but are exempted from the requirements of the circular (including advice from independent financial adviser) and independent Shareholders'

approval. Mergers The Board announces that on

30 October 2018, the subsidiaries of the Company, Dongfang Turbine Company and Dongfang Electric Machinery Company entered into the Dongfang Investment Development Merger Agreement and DE Plant Merger Agreement with the subsidiaries of Dongfang Electric Corporation, Dongfang Investment Development and DE Plant, respectively. According to the Merger Agreements, Dongfang Turbine Company will merge with Dongfang Investment Development and Dongfang Electric Machinery Company will merge with DE Plant. Dongfang Turbine Company and Dongfang Electric Machinery Company will be the surviving companies after the completion of Merger and inherit all the assets, liabilities, business, personnel, contracts and all other rights and obligations of Dongfang Investment Development and DE Plant, respectively, and Dongfang Investment Development and DE Plant will cancel their legal status. Upon the completion of Mergers, Dongfang Turbine Company and Dongfang Electric Machinery Company are no longer wholly-owned subsidiaries of the Company, the Company will hold 95.45% and 92.23% interests of Dongfang Turbine Company and Dongfang Electric Machinery Company, respectively. C