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. (incorporated in the Cayman Islands with limited liability) (Stock Code: 3633) VOLUNTARY ANNOUNCEMENT ACQUISITION OF GAS COMPANIES THE ACQUISITION The board of directors of the Company announces that the Purchaser (a wholly-owned subsidiary of the Company) entered into the following equity transfer agreements on 12 September 2019 with the relevant vendors in relation to the sale and purchase of the equity interests in three companies in the PRC. THE FIRST EQUITY TRANSFER AGREEMENT Date: 12 September 2019 Vendor: A company incorporated in the PRC (a third party independent of the Company and its connected persons) Purchaser: Zhongyu City Energy Investment Holding (Shenzhen) Limited* (中 裕城市能源投資控股（深圳）有限公司), a wholly-owned subsidiary of the Company Subject matter: Pursuant to the equity transfer agreement, the vendor has conditionally agreed to sell and the Purchaser has conditionally agreed to purchase (a) 89.5% of the equity interest in Zhengzhou Yizhiquan; and (b) 10% of the equity interest of Puyang Tianrun Gas for an aggregate consideration of RMB114,950,000 (approximately HK$127,594,500). - 1 - The consideration was determined by the parties after arm’s length negotiations taking into account (i) the benefit of exclusive right under the franchise agreement granted to Puyang Tianrun Gas as mentioned in the paragraph headed “Information of the target” below; (ii) historical profitability of Puyang Tianrun Gas; (iii) the development potential of the region where it operates; and (iv) the existing projects and customer base of Puyang Tianrun Gas in Henan Province. The consideration will be funded by internal resources. As at the date of the equity transfer agreement, Zhengzhou Yizhiquan is interested in 66.67% of the equity interest of Puyang Tianrun Gas. Upon completion of the acquisition, the Purchaser will be interested in 89.5% of the equity interest of Zhengzhou Yizhiquan and (directly and indirectly through Zhengzhou Yizhiquan) interested in 76.67% of the equity interest of Puyang Tianrun Gas. Upon completion of the acquisition, each of Zhengzhou Yizhiquan and Puyang Tianrun Gas will become non-wholly owned subsidiary of the Company and the financial statements of each of Zhengzhou Yizhiquan and Puyang Tianrun Gas will be consolidated to the Group’s consolidated financial statements. Information of the target: Puyang Tianrun Gas is a specialized natural gas project operation company integrating natural gas procurement, storage and transportation, sales, natural gas pipeline network and gas distribution station construction and operation. Puyang Tianrun Gas has entered into the Puyang County Town Pipeline Gas Franchise Agreement with Puyang County Public Utilities Bureau on 18 May 2018, pursuant to which Puyang Tianrun Gas was licensed to supply natural gas for industrial users within the jurisdiction of the industrial cluster area of Puyang County for a term of 15 years. Puyang Tianrun Gas has 3 gas distribution stations, approximately 24 kilometres of high-pressure pipelines, 6 kilometres of secondary high-pressure pipelines and 23 kilometres of medium-pressure pipelines. Puyang Tianrun Gas has 62 industrial users, which are mainly engaged in petrochemicals, glass products, refractory materials and other manufacturing industries. The region where it operates has high industry concentration, large customer scale and stable production. In 2018, the natural gas sales volume of Puyang Tianrun Gas reached approximately 122.23 million cubic meters. - 2 - THE SECOND EQUITY TRANSFER AGREEMENT Date: 12 September 2019 Vendors: Three individuals who are third parties independent of the Company and its connected persons Purchaser: Zhongyu City Energy Investment Holding (Shenzhen) Limited* (中 裕城市能源投資控股（深圳）有限公司), a wholly-owned subsidiary of the Company Subject matter: Pursuant to the equity transfer agreement, the vendors have conditionally agreed to sell and the Purchaser has conditionally agreed to purchase the entire equity interest in Fengyuan Natural Gas for an aggregate consideration of RMB36,000,000 (approximately HK$39,960,000). The consideration was determined by the parties after arm’s length negotiations taking into account (i) the benefit of exclusive right under the franchise agreement granted to Fengyuan Natural Gas as mentioned in the paragraph headed “Information of the target” below; (ii) historical profitability of Fengyuan Natural Gas; (iii) the development potential of the region where it operates; and (iv) the existing projects and customer base of Fengyuan Natural Gas in Henan Province. The consideration will be funded by internal resources. Upon completion of the acquisition, the Purchaser will be interested in the entire equity interest of Fengyuan Natural Gas, Fengyuan Natural Gas will become a wholly owned subsidiary of the Company and the financial statements of Fengyuan Natural Gas will be consolidated to the Group’s consolidated financial statements. Information of the target: Fengyuan Natural Gas is a specialized natural gas project company, it has entered into a franchise agreement in relation to supply of natural gas with the People’s Government of Puyang County in 2012 which covers 8 counties for a term of 30 years commencing from 11 February 2012. - 3 - Fengyuan Natural Gas has 2 gas stations, 5 pressure regulating stations and 1 gas filling station, its medium pressure pipe network covers a total of 451.3 kilometres. Fengyuan Natural Gas has approximately 49,600 residential users, 132 commercial and public users and 23 industrial users. In 2018, the gas sales volume of Fengyuan Natural Gas reached approximately 17.69 million cubic meters. The next focus in Puyang City is to build a new chemical industry base, the Group is therefore optimistic about the future growth of the gas consumption of industrial users in the region. REASONS FOR AND BENEFITS OF THE ACQUISITION The Company and its subsidiaries are principally engaged in (i) the investment, operation and management of city gas pipeline infrastructure, and the distribution of piped gas to residential, industrial and commercial users; and (ii) the operation of compressed natural gas or liquefied natural gas vehicle filling stations in the PRC. As disclosed in the 2018 annual report of the Company, the Group is now focusing on identifying opportunities for mergers and acquisitions, especially high- quality projects that can achieve synergies with current operating projects, in order to further expand the coverage of the business of the Group. Puyang county is located in the northeastern part of Henan Province, it is the heart for the exploration and construction of oil fields. Puyang county focuses on environmental protection, the local government has continuously introduced air pollution prevention and control work plans and provide subsidies to effectively promote the coal-to-gas business and industrial users’ development in the area. The aforesaid acquisitions can also exploit new gas resources from Sinopec Group for the Group (Puyang Tianrun Gas and Fengyuan Natural Gas currently are supplied with pipeline gas by Sinopec Group). By 2020, Sinopec Group will build a largest domestic gas storage with a storage capacity of 55.6 billion cubic meters in Puyang county. In view of the current projects and licences of Puyang Tianrun Gas and Fengyuan Natural Gas in Puyang county, the directors of the Company are of the view that the acquisition of the gas companies disclosed in this announcement can create synergies between the projects currently operated by Puyang Tianrun Gas and Fengyuan Natural Gas and the existing projects of the Group by broadening the customer base and enhance the Group’s market share in Henan Province. In view of the above, the directors of the Company are of the view that the terms of the two equity transfer agreements are fair and reasonable and the acquisition is in the interest of the Company and its shareholders of the Company as a whole. LISTING RULES IMPLICATIONS None of the applicable percentage ratio(s) as set out in Rule 14.07 of the Listing Rules in respect of the acquisition under each of the equity transfer agreements exceeds 5%, the acquisition under each of the equity transfer agreements therefore do not constitute notifiable transactions of the Company under the Listing Rules. - 4 - As each of the vendors of the equity transfer agreements is an independent third party and none of the substantial shareholders of the target companies is or is proposed to be a director, chief executive or controlling shareholder of the Company (or any of their associates), the transaction under each of the equity transfer agreements do not constitute a connected transaction under Chapter 14A of the Listing Rules. DEFINITIONS “Company” Zhongyu Gas Holdings Limited, a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on The Stock Exchange of Hong Kong Limited “connected person” has the meaning ascribed thereto under the Listing Rules “Group” the Company and its subsidiaries “HK$” Hong Kong dollars “Listing Rules” Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited “PRC” The People’s Republic of China “Purchaser” Zhongyu City Energy Investment Holding (Shenzhen) Limited* (中 裕城市能源投資控股（深圳）有限公司), a wholly-owned subsidiary of the Company “Puyang Tianrun Gas” Puyang Tianrun Gas Co., Ltd.* (濮陽縣天潤燃氣有限公司), a company incorporated in the People’s Republic of China “RMB” Renminbi, the lawful currency of the PRC “Fengyuan Natural Gas” Puyang County Fengyuan Natural Gas Co., Ltd.* (濮陽縣灃源天然 氣有限責任公司), a company incorporated in the People’s Republic of China “Zhengzhou Yizhiquan” Zhengzhou Yizhiquan New Energy Co., Ltd.* (鄭州益之泉新能源 有限公司), a company incorporated in the People’s Republic of China In this announcement, RMB are translated to HK$ for illustration purpose only at the rate of RMB1= HK$1.11.