Huarong Investment Stock : DISCLOSEABLE TRANSACTION - FINANCE LEASING ARRANGEMENT WITH HEZE SHENZHOU ENVIRONMENTAL SERVICES CO., LTD.

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(Incorporated in the Cayman Islands with limited liability)

On 20 July 2017 (after trading hours), the Lessor, an indirect wholly-owned subsidiary of the Company, and the Lessee entered into the Agreements, pursuant to which the Lessor agreed to purchase certain photovoltaic power station equipments, being the Leased Assets, from the Lessee at a consideration of RMB110 million (equivalent to approximately HK$124.3 million), and following which, the Lessor has agreed to lease back the Leased Assets to the Lessee for a term of 6 years at an estimated total lease payment of approximately RMB138 million (equivalent to approximately HK$155.9 million).

As one or more of the applicable percentage ratios as defined under the Listing Rules in relation to the transactions contemplated under the Agreements exceed 5% and are below 25%, the transactions contemplated under the Agreements constitute discloseable transactions for the Company and are subject to the notification and announcement requirements under Chapter 14 of the Listing Rules.

The Board is pleased to announce that, on 20 July 2017 (after trading hours), the Lessor, an indirect wholly-owned subsidiary of the Company, and the Lessee entered into the Agreements, pursuant to which the Lessor agreed to purchase certain photovoltaic power station equipments, being the Leased Assets, from the Lessee at a consideration of RMB110 million (equivalent to approximately HK$124.3 million), and following which, the Lessor has agreed to lease back the Leased Assets to the Lessee for a term of 6 years at an estimated total lease payment of approximately RMB138 million (equivalent to approximately HK$155.9 million).

Parties Lessor: 中聚(深圳)融資租賃有限公司 (Zhongju (Shenzhen)

Financial Leasing Co., Ltd.*), an indirect wholly-owned subsidiary of the Company, which is licensed in provision of financial leasing business in the PRC

The book value of the Leased Assets as of 30 June 2017 is approximately RMB120 million (equivalent to approximately HK$135.6 million). The Lessor plans to fund the purchase price of the Leased Assets through its internal resources.

Pursuant to the Finance Lease Agreement, during the lease period, the Lessor is entitled to receive a lease payment, to be paid in quarterly instalment throughout the lease period (in the first 6 months with only interest payment). The lease payment consists of:

1. the principal lease amount, which is RMB110 million (equivalent to approximately HK$124.3 million), being the same amount as the purchase price for the Leased Assets; and

2. a floating interest rate, which is set at 253BP over the above-five-years benchmark loan interest rate by the People's Bank of China. Based on the current interest rate of the People's Bank of China, the total interest to be received by the Lessor during the lease period is estimated at approximately RMB28 million (equivalent to approximately HK$31.6 million).

The legal title of the Leased Assets shall vest in the Lessor throughout the lease period.

Obligations of the Lessee under the Finance Lease Agreement are secured and guaranteed by the Security Documents.

The terms of the Agreements, including the purchase price for the Leased Assets, principal lease amount and interest rate were determined after arm's length negotiations between the Lessor and the Lessee with reference to the prevailing market rates for the similar finance leasing arrangement.

Taking advantage of the rapid growth in the PRC's finance leasing industry, the Lessor has actively pursued investment opportunities by collaborating with companies investing and operating business in the new energy industry, the development of which is encouraged by the PRC government and which is also benefiting to environmental protection while aligning with the direction of the state's energy structural finetune, such as the Lessee. The board believes, by entering into of the Agreements, the Company will be able to capture investment opportunities in the new energy industry and potential investment returns in the transactions contemplated under the Agreements and generate stable income for the Group.

Having considered the above, the Directors are of the view that the transactions contemplated under the Agreements are entered into on normal commercial terms and the terms set out in the Agreements are fair and reasonable and in the interests of the Company and the shareholders of the Company as a whole.

The Lessor and the Group

The Lessor is a company incorporated in the PRC with limited liability and an indirect wholly-owned subsidiary of the Company. The Lessor is principally engaged in the provision of finance leasing business in the PRC.

The Group is principally engaged in the (i) direct investments; (ii) financial services and others; and (iii) foundation and substructure construction services.

The Lessee

The Lessee is a company incorporated in the PRC with limited liability and is principally engaged in the development and operation of new energy. As at the date of the announcement, the Lessee is wholly-owned by Gorun Energy.

To the best of the Directors' knowledge, information and belief having made all reasonable inquiry, the Lessee and its ultimate beneficial owner(s) are Independent Third Parties.

The Security Providers

Gorun Energy is a company incorporated in the PRC with limited liability and is principally engaged in engineering, procurement construction, investment and development of new energy and related technology and equipments.