Sino Energy Acquires 16% Stake in Fujian Xinjie Natural Gas

Expands Energy-related Business to Drive Growth

HONG KONG — Sino Energy International Holdings Group Limited (“Sino Energy” or the “Group,” HKSE stock code: 1096) has signed an agreement to acquire Wealthy Fortress Investment Corporation (“Wealthy Fortress”) through which it will come to own 16% interest in Fujian Xinjie Natural Gas Co., Ltd. (“Fujian Xinjie”), allowing it to expand its energy-related business for driving future growth.

Fujian Xinjie, which mainly engages in storage, transportation and sales of natural gas and liquefied petroleum gas, is owned 58% by a subsidiary of Kunlun Energy Company Limited (Stock code: 135.HK), 26% by Fujian Deqing Investment Co., Ltd. and 16% by Wealthy Fortress. Under the agreement, Sino Energy has committed conditionally to acquiring 100% equity interest in Wealthy Fortress, at the initial consideration of HK$300 million, which will be satisfied by in cash. After the acquisition is completed, Wealthy Fortress will become an indirect wholly-owned subsidiary of the Group and Fujian Xinjie will be 16% indirectly owned by Sino Energy.

The acquisition gives the Group the opportunity to cooperate with Kunlun Energy Company Limited, a subsidiary of PetroChina Company Limited (stock code:857) and a leading gas industry player in China, conducive to the expansion of its energy-related business. In addition, Fujian Xinjie boasted a remarkable 410% growth in net profit to RMB 6.3 million in 2015 and expected a significant increase in net profit in 2017. The company currently operates nine gas stations and has signed a strategic cooperation agreement with a PetroChina branch company to cooperate in setting up 100 gas stations. To grasp the opportunities arising from the West to East Natural Gas Transmission Project, Fujian Xinjie will take part in sales and transportation of pipeline gas in Fujian targeting to sell 1.3 billion cubic metres of gas in 2017. As the sole natural gas distributor of Kunlun Energy in Fujian Province, Fujian Xinjie will be responsible for the sales of pipeline gas from West line No. 3.

Mr. Chen Jianbao, Chairman of Sino Energy, said, “The Group is implementing a series of strategic transformation measures, aiming to diversify its business and expand into energy-related business. The proposed acquisition represents our effort to tap opportunities presented by government policies favorable for the natural gas industry. Building on the ties with industry leader Kunlun Energy, we will be able to provide shareholders and investors with investment opportunities that promise strong growth potential and, for the Group, greater and sustainable financial returns in the long run.”