About CHINA HK POWER Company

The main business of China Gangneng Smart Energy Group Co., Ltd. is asset investment and trading and investment in the development of new energy in China, including investment, construction and operation of liquefied natural gas filling stations, gas terminals and related infrastructure, sales and modification of liquefied natural gas vehicles and ships, and provision of financial leasing services to customers. Business review and financial review During the period, the Group recorded a turnover of approximately HK$339,000,000, compared to a loss of approximately HK$7,000,000 in the same period in 2013. The sharp increase in turnover was mainly due to realized and unrealized income from holding trading investments. During this period, the Group purchased 152,050,000 shares of Huiduoli and convertible bonds with a principal amount of HK$80,000,000 (“Convertible Bonds”) at a cost of HK$87,602,500. Soon after, on June 21, 2014, the Group entered into a conditional transfer deed relating to the sale of convertible bonds of HK$380,000,000 in cash and the sale of 58,000,000 shares of Huitoli shares to the market. In addition to the realized and unrealized income from trading listed securities, the realized and unrealized income from trading investments during the period was HK$338,000,000, compared to the unrealized loss of HK$13,000,000 on trading investments held in the same period last year. As far as the Property Investment Division is concerned, the Group holds three residential properties located in Kwu Tung, Central Pun Shan, and Repulse Bay. As in the same period last year, only residential properties located in Mid-Levels, Central received a monthly rent income of HK$70,000, while the other two residential properties in Kwu Tung and Repulse Bay remained vacant. The Group continues to seek tenants for vacant properties to collect rental income. In addition to existing business, since 2013, the Company has invested considerable effort in consulting with the provincial governments of the People's Republic of China (“China”) and others to develop liquefied natural gas (“LNG”) business in China. During this period, the Company entered into five strategic cooperation framework agreements/letters of intent for developing the liquefied natural gas business. On March 27, 2014, the Company signed a strategic cooperation agreement with Ping An Securities Co., Ltd. regarding the development of liquefied natural gas business in China to provide comprehensive financial services. On March 31, 2014, the Company signed a letter of intent with CNOOC Yunnan Energy Co., Ltd. and the Yongping Bureau of Commerce of the Yongping County People's Government concerning possible cooperation in the development of liquefied natural gas business in Yongping County, Yunnan Province, China. On April 22, 2014, the Company signed a strategic cooperation framework agreement with the Suzhou Zhongluo International Logistics Technology Park Management Committee relating to the conversion of ships, heavy vehicles and public transportation vehicles from using fuel to the use of liquefied natural gas and the construction of a liquefied natural gas filling station and terminal in Pingwang, Suzhou, Jiangsu Province, China. On June 25, 2014 and June 26, 2014, the Company entered into strategic cooperation framework agreements with the Jiangsu Nantong Binhai Park Management Committee and the Nantong Economic and Technological Development Zone Management Committee relating to investment in liquefied natural gas application projects in the Jiangsu Nantong Binhai Park and the Nantong Economic and Technological Development Zone in Nantong City, Jiangsu Province, China, respectively. vistas China is one of the biggest energy consumers in the world. In order to control haze pollution and improve air quality, natural gas will play an important role in China's coal-consuming industries in the near future. In addition to the existing business, since 2013, the Company has invested considerable energy in negotiations with many people (including many provincial government departments in China, state-owned enterprises engaged in exploration, development, production and sale of crude oil, natural gas and other petroleum products, liquefied natural gas vehicle manufacturers, logistics companies and passenger transport companies) on the development of liquefied natural gas business in China. The Company plans to establish a joint venture with the above state-owned enterprises to develop the liquefied natural gas business. In addition to the framework agreement/letter of intent described in the “Business Review and Financial Review”, on July 28, 2014, the Company entered into a strategic cooperation framework agreement with Shanghai Yuanxing Supply Chain Management (Group) Co., Ltd., a subsidiary of Shaanxi Automobile Holding Group Co., Ltd., relating to (including) the provision of liquefied natural gas heavy trucks or replacement of liquefied natural gas heavy trucks. On July 29, 2014, the Company and Xuzhou Construction Machinery Group Co., Ltd. signed a strategic cooperation framework agreement relating to the purchase of liquefied natural gas construction machinery vehicles and cooperative investment in the capital market. On August 4, 2014, the Company signed a strategic cooperation framework agreement with the Xuzhou Municipal Transportation Bureau, which includes a project to invest in the application of liquefied natural gas in Xuzhou City, Jiangsu Province, China.