2014 Annual Results

HANERGY THIN FILM POWER GROUP LIMITED 漢能薄膜發電集團有限公司 (STOCK CODE: 566HK) 2014 Annual Results

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Revenue Gross Profit Net Profit Earning per share

HK$9,615m HK$5,505m HK$3,308m HK$10.0 cent

184% 109% 64% 9%

(As compared to 2013) (As compared to 2013) (As compared to 2013) (As compared to 2013)

31 Dec 2013 Change 30 Dec 2014

HK$’ million HK$’ million % HK$’ million Total Non-current 9,556 169 2% 9,725 Assets

Total Current Assets 9,256 5,994 65% 15,250 Cash and Cash 1,368 1666 122% 3,034 Equivalents Total Current 2,556 669 26% 3,225 Liabilities

Net Current Assets 6,700 5,325 79% 12,025 Total Assets less 16,256 5,494 34% 21,750 Current Liabilities

Net Assets 15,841 4,652 29% 20,493

Total Equity 15,841 4,652 29% 20,493

2013 Change 2014

HK$’ million HK$’ million Increase / Decrease % HK$’ million

Revenue 3,284 6,331 193% 9,615

Cost of Sales 648 3,462 534% 4,110

Gross Profit 2,636 2,869 109% 5,505

Gross Margin 80% -23 Percentage 57%

Profit before Tax 2,277 2,014 88% 4,291

Profit for the Period 2,018 1,290 64% 3,308

Net Margin 61% -27 Percentage 34%

FY 2012 - 2014

10,000 9,615.0 8,000 6,000 3,283.8 Revenue 4,000 2,756.5 2,000 0 HK$’ million 2012 2013 2014

5,504.6 6,000 80.0% 100% 71.4% 57.3% 75% 4,000 Increase in net profits is 2,636.0 50% Gross 1,967.0 attributable to the revenues of the 2,000 Profit 25% downstream business segment arising from non-connected 0 0% transaction achieved significant 2012 2013 2014 HK$’ million breakthrough last year which Gross Margin% accounted for 38% of the total revenue of the Group; and 4,000 61.0% 3,307.7 80% substantial gain recorded as a 3,000 47.7% 60% result of the disposal of 5 power 2,018.0 34.4% station projects . 2,000 40% Net 1,316.2 Profit 1,000 20% 0 0% 2012 2013 2014 HK$’ million Gross Margin%

10,000 170 112 112 170 9,000

Revenue from 8,000 non-connected 3,378 3,378 transaction equals to 38% of 7,000 total revenue

In 2014, the revenues arising 6,000 from non-connected transaction with third-party customers accounted for 5,000 around 38% of the total revenue of the Company as the Company targeted to 4,000 5,955 5,955 improve its revenue structure during the Year. 3,000

2,000 Sales of Sales of power Sales of PV Sales of rooftop Total equipment stations modules power stations

 Entering into 17MW PV  Supplied PV electricity to FIA  Acquisition of Global Solar Energy energy management Formula E with rapid  Sold 5 power stations with 180 MW contract with Guangqi deployment solar system utility scale Honda  Major shareholder raised its  Supplied Tesla with solar  Strategic partnership with stake by 12.8 billion shares,  To expand Midstream – Built charging stations in Sojitz Machinery owning 73% of the listed 300MW flexible CIGS PV modules in Beijing and Shanghai Corporation company Changde , Hunan Province Jan May Aug Oct 2014 Apr Jun Sep Dec  Entered equipment sales and service  Lunched 50 MW  Jiangsu Wujin and  Changed company name contracts to provide CIGS thin film ground-mounted Zhejiang Changxing PV  Hanergy product group solar project in Caofeidian, Heibei solar power plant energy Management was established in Silicon Province contracts project in Henan Valley, the USA

 Unveiled thin film mobile energy vision  Won 600MW contracts of production line for BIPV to Shangdong Macrolink Signed another technical services provision contract for the BIPV production lines Jan Mar 2015 Feb  Launched Hanergy online shopping platform  Acquisition of Alta Devices  Won 1200MW contracts of production line for BIPV to Baota Investment  Installed 17MW of distributed PV for Guangzhou Honda  Won 600MW contracts of production line for BIPV to Beijing Manshi Investment 9 © 2015 Hanergy Thin Film Power Group Limited. All Rights Reserved. Business Highlights

2014: Delivered 1,080 MW of the thin film production lines in a year

Customers Status Amount Revenue Hanergy Holding 2014 1,080MW HK$ 6.0 billion delivered

2015 1Q: Signed HK$ 20.4 billion of equipment production and services contracts in the first three months of the year. All contracts were related to independent third parties. Revenue from upstream Customers Status Amount Revenue business grew year by year

Shangdong 2015 600MW HK$5.1 billion 6,000 5,955.0 Macrolink Signed contract 5,000

4,000 3,244.0 2,757.0 Baota Investment 2015 1,200MW HK$10.2 billion 3,000 Signed contract 2,000

1,000 Beijing Manshi 2015 600MW HK$5,1 billion 0 Investment Signed contract HK$’ million 2012 2013 2014

Acquisition of Alta Devices technology

• Single junction cells: Efficiency of 28.8%

• Dual junction cells: Efficiency of 30.8% Application • Most efficient, thin and flexible mobile power technology

• Great potential to power a wide range of mobile devices and equipment

Alta Devices awarded “World’s Most Disruptive Companies”

twice by the MIT Technology Review

Sales of power stations projects

• Disposal of five solar power station projects (located at Qinhai, Jimsar, Hami, Fuhai and Korla ) totalling 180MW

• Good profit margin: 29%

Support Tesla with solar charging stations

• Custom-designed and manufactured PV supercharger stations for electric vehicles in Beijing, Shanghai and Nanjing based on the requirements of Tesla

• Utilized MiaSolé’s CIGS thin film technology

Installed 17MW of distributed PV for Guangzhou Honda

• Largest distributed PV power generation project in China’s auto industry, adopted the mode of Energy Performance Contracting (EPC)

• Utilized rooftops of Guangzhou Honda factory at Zengcheng. Hanergy is responsible for investment, installation and operation

Residential thin film products in Europe’s Ikea store • Launched Hanergy residential thin film power system in Britain, the Netherlands and Switzerland, Hanergy was the first 3rd party agent supplying its own branded goods within IKEA • Sold around 2,000 sets PV system in 2014 successfully • Continuously plan to enter other EU countries: Germany, Spain, Italy, France, etc

Difference between “Thin-film” & “Crystalline silicon” Our business Thin-film technology Crystalline silicon technology

Upstream

Turnkey production line Crystalline silicon

Midstream

Glass-to-glass module Flexible module Transparent module Crystalline silicon module

Ground mounted Curved rooftop Transparent BIPV Ground mounted power station Downstream power station Rooftop power station

（Without flexibility, transparency and light-weight, Crystalline silicon module is hard to be applied in many areas) Various application products

• The core competitive strength for Hanergy derives from operating R&D divisions with our 1,600 scientists, 600 master degree holders and 130 staff members consisting of senior engineers • Hanergy is confident to open up markets and bring new technologies with over 1,000 licensed royalties in the PRC, the USA, Europe, Japan and Korea. 70% of the royalties are innovative royalties.

Apollo Solibro MiaSole Global Solar Alta Devices a-Si, Glass, Transparent CIGS , glass CIGS, glass & flexible CIGS, flexible Gallium Arsenide (GaAs), flexible

Global integration and enhancement of leading thin film technologies – Our core objective 15 © 2015 Hanergy Thin Film Power Group Limited. All Rights Reserved. Cutting-edge technology —— 8 R&D Centers around the World

Solibro Research AB，Sweden

MiaSolé Hi-Tech, the U.S.

Hanergy Product development centre，Beijing Global Solar Energy, the U.S. Solibro Hi-Tech, Germany

Hanergy Chengdu R&D Centre Alta Device, the U.S. Hanergy Jiangsu R&D Centre

Pollution-free, Low energy consumption Flexibility, Light weight, Low-light performance, diversified color and shapes Satisfies the demand from traditional PV market & Widens PV application market for different industries

Hanergy汉能位列“全球最具创新力企业”第, ranked 23rd in “World’s Most Innovative23位，成为国内能源领域 Companies”, is the only唯一 Chinese上榜企业。 enterprise named in the energy field

Most全球最具影响力的科技商业奖项：麻省理工学院 influential technology business award in《 the科技创业 World:》 MIT(MIT TechnologyTechnology Review) Review

 Production costs in China much lower than in  Lower procurement Europe and the USA costs by scale  Optimize costs by production upgrading production lines Economies Cost of Scale effectiveness Our Advantages

 Share technologies  MiaSole, Solibro, Global Solar, Alta  Assist in establishing Devices acquisition sales channels enhances R&D  potential Helps in early Synergy development of Support from Effects products major shareholder

8 Key Business Units

Household Agricultural Automobile Generic Commercial Power Electronics Specialty BIPV Applications Applications Products Unmanned Generation BU Products BU BU BU BU BU Drones BU BU

We have established the Product Development Group in Silicon Valley, USA, collaborating with our Beijing Product Development Center

• As a comprehensive BIPV solution supplier – Combine design, R&D, production, integration, construction, operation and maintenance

Beijing APEC venue with solar utilization in 2014

Thin film products on the top of agricultural BIPV project at Hanergy Headquarter greenhouses

• Provide most efficient and stable power supply to portable and wearable electronic devices

Hanergy thin film solar- powered outdoor devices such as tent, backpacks and clothing etc.

• Cooperate with foreign and domestic top car design institutions to develop fully solar-powered vehicles • Integrate a 6 m² GaAs soft thin film solar battery into each vehicle • Expect to launch solar-powered cars this year

Solar-powered cars developed by thin film solar power technology (Simulated picture)

Marketing thin film poducts in China and worldwide

Commercial System

Residential System

Portable Products

24 © 2015 Hanergy Thin Film Power Group Limited. All Rights Reserved. Frequently Asked Questions (FAQs) • Accounts receivable • Sales of products • Number of shares held by shareholder • Connected transactions • High gross profit margin • Power station business

The illusion of overdue receivables primarily lies in the timing differences between payments and the accounting revenues: Payment Schedule for Equipment (Example: 7GW Contract signed in 2011) After Advanced Transportation/Shipment After Check Quality Assurance - 2-year Payment of equipment and Receive warranty 10% 50% 20% 15% 5% Payment Schedule for Services

Advanced Check and Start of Production Assessment after 12-month Payment Receive production 10% 10% 10% 50%10% 25% 20% 10% 5%

On-site Completed adjustment Finished adjustment Assessment inspection and testing of the and testing of the start after 21- report installation of production month of production • According to the master agreement entered into between the Company and each customer, the customer will settle the contractua l sums in installments according to various phases of the project; the last installment of payment will usually become due and payable 21 months after the issuance of the start of production (SOP) certificate after the passing of the production line assessment. • Pursuant to accounting principles, most of the amount will turn into revenue of that particular year when the new equipment has successfully been delivered to the customers. The last installment of payment made by customers is usually due around 2 years after the delivery, such difference therefore becomes Accounts Receivable. The Company will only receive the remaining portion of the total contract revenue based on the due date in accordance with the payment terms under the relevant agreements. • It is reasonable that accounts receivable increases with sales • As of Mar 30, 2015, Hanergy holding has cleared all past due trade receivables and interest penalty 26 © 2015 Hanergy Thin Film Power Group Limited. All Rights Reserved. (2) Where can you see Hanergy’s products?

Ground-mounted PV Power Station Distributed PV 2014 Sold: projects IKEA Europe On-grid projects: 180MW Sold in 2014: Under construction: Approximately 37 MW Around 2,000 469 MW Under construction: Filed projects: Approximately 67 MW sets of solar Approximately 370MW Filed projects: power systems Proposed Projects: Approximately 36MW for home-use Approximately 300MW

Stores for Vehicles Hanergy Online household solar Tesla Shop has products Solar super- opened, more charger More than 30 application flagship stores and Aston Martin products can be direct-sales retail Rooftop solar found at points for household panels http://www.han Formula-E： solar products ergyshop.com/ Rapid Released over 20 Deployment residential products Solar System

Our partners worldwide:

Automobile

Power Station

Distributed Power Generation

• As of 28 February 2015, the Group and its interested parties held a total of 30,452,024,510 shares in Hanergy Thin Film, or approximately 73.1% of issued capital share.

(4) Why the Company has such high gross profit margin?

Upstream – High-end equipment • Our Group is a high-technology focused enterprise. Over Higher Gross Margin the years, the main source of income is derived from the sale of high-end PV equipment which has a higher gross profit margin Midstream – Component Manufacturing • Along with the expansion in to the downstream power Lowest Gross Margin generation business, the overall gross profit margin may decline in the future; but it addresses the income diversification issue and further encourages the application Downstream – Power of thin film power technology in various Station Construction purposes/industries which supports the development of Lower Margin our upstream business

Connected transactions is a historical legacy issue the arose when the Company established itself into the new PV industry. We have consistently been trying to resolve this issue. For the financial year 2014, non-connected transactions accounted for approximately 38% of the total revenue of the Company  In 2011, Hanergy Holdings became the  For FY 2014, non-connected transactions  Hanergy was committed to shareholder of the listed company through accounted for approximately 38% of the the development of clean acquiring shares and thereby began the total revenue. The proportion of non- energy, in particular manufacture of upstream PV equipment connected transactions is expected to hydropower Entering into upstream PV industry sector increase continuously. Dealing with the issue of connected Before 2010 resulting in connected transactions transactions 2011 2014 目标：未来持续提高非关联交易比例 2010 2013 Hanergy Group acquired 566 Entering into downstream PV industry chain resulting in connected transactions  During 2010, Hanergy Holdings ventured into PV  In 2013, 566 (renamed “Hanergy”) ventured into the downstream PV industry. 566 (formerly industry and after that, the businesses of the Group included both named ‘Apollo Solar Energy”) upstream and downstream categories of the industry. was a manufacturer of  Due to the comparatively largescale of the midstream business held by upstream solar production Hanergy Holdings, it was financially challenging for the Company to lines and Hanergy Holdings acquire and merge this business together with its upstream and was its client. downstream business es

Ground-mounted PV Power Station

Cost • Cost per W : about 10 ￥ • Annual power generation：1500h × 1W = 1.5 kW·h *National Development and (Assumed in Type 2 Region) Reform Commission issued policy Revenue guidelines about FiT of Ground- • Annual income：1.5 kW·h × 0.95 ￥/ kW·h = 1.425￥ mounted PV Power Station on 2 Sep 2013, with effective 1 Jan (Electricity Subsidy in Type 2 Region is 0.95 ￥ / kW·h ) 2014 (until Yr 2034)： Annual rate 0.90￥/ kW·h （Provinces in the of return • 14% Western and NW part of China) Distributed PV power generation project 0.95￥/ kW·h (Provinces in SW, NE and middle part of China) Cost • Cost per W ： about 10 ￥ 1.00￥ / kW·h （Other regions） • ： × Annual power generation 1500h 1W = 1.5 kW·h Distributed PV power (Assumed in Type 2 Region) generation *Subsidized 0.42 ￥/kW.h for Revenue • Annual income ：1.5 kW·h × （0.6 + 0.42）￥/ kW·h = 1.53￥ 20 years (Distributed PV power generation saves tariff, and granted 0.42￥/W; Assuming in Beijing, commercial tariff is about 0.6￥) Annual rate • Around 15% of return (Most of the provinces subsidized the project, the real rate of return is higher)

The standardized electricity charges will remain for 20 years, and our PV component has a warranty of 25 years. Due to the more stable income nature of power station business, it is more suitable for institutions looking for yield types of investments. 31

Thin film power seizes FIVE (out of seven) emerging industries for strategic importance

New Energy

High-end Equipment New Materials New Energy Manufacturing New Materials Vehicles

Emerging industries for strategic New Energy New Energy Biology importance Vehicles

Energy Saving & High-end Environmental Equipment Energy Saving Protection Manufacturing New generation and of information Environmental technology Protection

This is a revolution comparable to the Internet It revolutionizes the way that people make use of energy, restructuring the traditional ‘human industrialization’

This is a revolution on how to use energy effectively Energy will be everywhere, every individual utilizes the power grids to be the body of energy generation

This is a revolution in fostering a business model endowed with environmental values Changing from burning coal to using natural sunlight, transferring light energy to electricity with zero emission

33 © 2015 HANERGY HOLDING GROUP LIMITED. All Rights Reserved. Thin Film Solar Power Generation It revolutionized the way energy is used It is not a concept or vision, rather it is a fact that is already happening

Our Business Model Advanced Technology + Energy

Our business has just begun!

Thanks！