On 12 May 2017, Xuchang Tian Lun (an indirect wholly-owned subsidiary of the Company) entered into the Acquisition Agreement with previous shareholders of Sichuan Jintang County Gas Company, pursuant to which, Xuchang Tian Lun agreed to acquire 100% equity interest in Jintang County Gas at the Consideration of RMB500,000,000, in which obtained 7 gas exclusive rights in Jintang County.

Jintang County, where Jintang County Gas Company operates, is in the core area of the Chengdu-Chongqing economic circle and only 42 kilometres from the central urban area of Chengdu. It is a key development area in the Chengdu Plain economic circle and a key development zone for characteristics industries in Chengdu. Local property business in Jintang Country is at a stage of rapid growth, with a large number of properties under construction and to be developed and land available for development. With its unique location advantage, the Chengdu-Jintang subway, which is under construction, will also be completed for traffic in 2020. With the improving transportation network, urban population will maintain fast growth, and local civil gas market has broad development prospects. The “Da Zhi Zao” (大智造) industrial park, which has a planned area of 330 kilometres and has commenced construction, will focus on the development into an industrial cluster area for energy-saving and environmental protection, general aviation, new energy vehicles, new materials, high-end equipment, and biological medicine industries, and it’s a “trillion level industrial new town” and a “national development zone” in Chengdu. The completed Chengdu-Aba Industrial Park focuses on the development of energy-saving and environmental protection, resources recycling and electronics industry cluster and has introduced over 100 large-scale industrial projects. It strives to develop into a first-class energy-saving and environmentally-friendly industry demonstration park in the PRC. In addition, Jintang County government vigorously promotes the development of local tourism industry and focuses on the development of a number of demonstration tourism projects including the largest children’s theme park in Southwest China, China’s first big data football base and a hot spring resort of China Travel Service (Hong Kong). The improving urban systems, growing urban area and population, and developing industrial park and key investment projects will all facilitate the future market expansion and development of Jintang County Gas Company .

Jintang County Gas Company has a stable and mature business operation and over 110,000 residential users, more than 2,200 commercial users and 230 industrial users. It has gas supplied by China Petroleum and Chemical Corporation, Southwest Oil and Gas Branch and PetroChina Company Limited, Southwest Natural Gas Sales Branch, which further ensures its future steady growth. The project is only 30 kilometers from Xindu District where Sichuan Ming Sheng operates. The Acquisition will further expand the business size of the Group in Southwest China, improve the operational synergies generated by the Group’s urban gas projects in Sichuan Province, Gansu Province, Shaanxi Province and Yunnan Province, and have strategic values and play an important role in the Group’s presence in Sichuan Province and further increase in its market share in Southwest China.