China Water Industry : UPDATE ON PROFIT GUARANTEE IN RELATION TO THE DEEMED DISPOSAL

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(Incorporated in the Cayman Islands with limited liability)

(Stock code: 1129)

UPDATE ON PROFIT GUARANTEE IN RELATION

TO THE DEEMED DISPOSAL

Reference is made to the announcements of China Water Industry Group Limited (the "Company") dated 27 December 2019 and 4 August 2020 in relation to the deemed disposal of 3.8462% equity interest in New China Water (Nanjing) Renewable Resources Investment Company Limited and fulfillment of profit guarantee in relation to the deemed disposal respectively (the "Announcements"). Unless otherwise specified, capitalised terms used herein shall have the same meanings as those defined in the Announcements.

Pursuant to the Profit Guarantee Agreement, the Current Shareholder and the Company irrevocably and unconditionally guaranteed that the audited net profit excluding extraordinary items of the Target Group for the year ended 31 December 2020 (the "Audited 2020 Net Profit") prepared in accordance with accounting principles generally accepted in the PRC shall not be less than RMB145,000,000 (the "2020 Annual Guaranteed Profit"). The Current Shareholder and/or the Company shall compensate the Investor if the Audited 2020 Net Profit falls below 90% of the 2020 Annual Guaranteed Profit.

The Board is pleased to announce that the Audited 2020 Net Profit of the Target Group was less than 2020 Annual Guaranteed Profit but was more than 90% of the 2020 Annual Guaranteed Profit. Accordingly, no compensation is required to be paid by the Current Shareholder and the Company to the Investor pursuant to the Profit Guarantee Agreement.

By order of the Board

China Water Industry Group Limited

Mr. Zhu Yongjun

Chairman and Executive Director

Hong Kong, 6 May 2021

As at the date of this announcement, the Board comprises Mr. Zhu Yongjun (Chairman), Mr. Zhong Wei Guang (Chief Operating Officer), Mr. Lin Yue Hui, Ms. Chu Yin Yin, Georgiana and Ms. Deng Xiao Ting, all being executive Directors, Mr. Ho Chi Ho being a non-executive Director and Mr. Wong Siu Keung, Joe, Mr. Lam Cheung Shing, Richard and Ms. Qiu Na.

• For identification purpose only