MECOM Power and Construction : VOLUNTARY ANNOUNCEMENT - STRATEGIC ALLIANCE FOR EV CHARGING AND BILLING SOLUTIONS

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MECOM POWER AND CONSTRUCTION LIMITED

澳 能 建 設 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1183)

VOLUNTARY ANNOUNCEMENT

STRATEGIC ALLIANCE FOR EV CHARGING AND BILLING SOLUTIONS

This is a voluntary announcement made by the Company to provide the shareholders and potential investors of the Company an update on the latest business development of the Group.

BACKGROUND

On 8 September 2020, MECOM Hung Yip entered into the JV Term Sheet with Ubitricity, an Independent Third Party, in relation to the proposed joint venture arrangement for undertaking EV charging projects in the Greater Bay Area.

BUSINESS PURPOSE

The JV Term Sheet outlines the material terms and conditions of the mutual joint venture to be formed and describes the development process of the business plan for the joint venture.

The objective of the joint venture is to develop, manufacture and distribute market specific EV charging and billing solutions in the electric mobility industry in the Greater Bay Area.

CAPITAL CONTRIBUTION AND PROFIT SHARING

Pursuant to the JV Term Sheet, the capital contribution and profit sharing percentage of MECOM Hung Yip and Ubitricity are 70% and 30% respectively. Upon completion of the business plan for the joint venture, the parties will enter into negotiations on specific terms to be included in the joint venture agreement.

The JV Term Sheet does not specify any capital commitment amount by the parties. As at the date of this announcement, no material capital commitment from MECOM Hung Yip to the joint venture is expected. MECOM Hung Yip will finance its capital commitment (if any) from its internal resources.

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TERM

The JV Term Sheet shall remain in effect until the earliest of:

1. the effectiveness of a joint venture agreement or a shareholders agreement between the parties;
2. the termination of the JV Term Sheet by one or both of the parties; or
3. the end of the term of the JV Term Sheet which is, unless extended by mutual written consent of both parties, 12 August 2021.

REASONS AND BENEFITS FOR ENTERING INTO THE JV TERM SHEET

The Greater Bay Area is a hub for the development and manufacturing of new energy vehicles in the PRC and also one of the world's leading areas for new energy vehicle applications. In response to this huge new energy vehicle market, it is envisaged that the joint venture will cooperate with real estate developers in the Greater Bay Area to build charging piles in various communities, and will assist casino gaming operators in Macau to develop electric charging system networks for the purpose of upgrading environmental protection.

Charging pile is one of the key investment areas of new infrastructure, and also the infrastructure and key link of the development of EV industry. At present, China EV Charging Infrastructure Promotion Alliance under the National Energy Administration of the PRC points out that the ratio between EVs and charging piles is 3.5:1, reflecting an uneven distribution of charging facilities and a low coverage of charging piles in the downtown area. Such a gap in the market will present huge business opportunities for charging pile business. In addition, the utilisation rate of EVs in Hong Kong and Macau is lower, mainly due to the inconvenience of charging. Therefore, the expansion of the charging pile network will lead more car owners to switch to environmentally friendly and low-cost EVs, and the market is expected to have a large potential.

Ubitricity is a leading company, with shareholders including Siemens AG and Honda Motor, in the new energy charging business boasting advanced and mature patented technology for operating cluster charging pile systems in large European cities. Its patented technology, including the Mobile Metering system, and successful experiences in installing charging facilities on street lamps in large European markets will allow the joint venture to speed up the development and operation of installing charging piles in the Greater Bay Area at a higher cost-efficient rate. The Directors expect great synergy and commercial benefits for both parties with the joint efforts in developing EV charging projects in the Greater Bay Area.

The Group has strong expertise in high voltage power substation construction and system installation projects, which therefore have been one of the principal businesses of the Group. The Group is constantly exploring new business opportunities for new power-related projects and further broadens its business scale. The Directors consider that the JV Term Sheet presents a good business opportunity to leverage on the strengths and resources of the Company to further its revenue base and business scale.

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As the highest applicable percentage ratio in relation to the entering of the JV Term Sheet is less than 5%, the transaction does not constitute a notifiable transaction under Chapter 14 of the Listing Rules. This announcement is made by the Company on a voluntary basis. The Company will comply with the applicable requirements under the Listing Rules in relation to any future capital commitment on the part of the Company that may arise with respect to the JV Term Sheet and/or the joint venture, or the transactions contemplated under the JV Term Sheet, as and when appropriate.

The Board wishes to state that no forecast or prediction of the profits of the Group has been made with regard to the entering of the JV Term Sheet.

Shareholders and potential investors of the Company should exercise caution when dealing in the shares of the Company.

DEFINITIONS

The following terms have the following meanings in this announcement unless the context otherwise requires:

''Board''	the board of Directors of the Company
''Company''	MECOM Power and Construction Limited, an exempted company
	incorporated in the Cayman Islands with limited liability, the issued
	shares of which are listed on the Main Board of the Stock Exchange
	(stock code: 1183)
''Director(s)''	the director(s) of the Company
''EV''	electric vehicle
''Group''	the Company and its subsidiaries
''Greater Bay Area''	Guangdong-HongKong-Macao Greater Bay Area
''Independent Third	third party(ies) which is(are) independent of the Company and the
Party(ies)''	connected persons (as defined in the Listing Rules) of the Company
''JV Term Sheet''	the joint venture term sheet dated 8 September 2020 between Ubitricity
	and MECOM Hung Yip in relation to the proposed joint venture
	arrangement among these parties
''Listing Rules''	Rules Governing the Listing of Securities on the Stock Exchange
''MECOM Hung Yip''	MECOM Hung Yip Limited, a direct wholly-owned subsidiary of the
	Company
''PRC''	the People's Republic of China

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''Stock Exchange''	The Stock Exchange of Hong Kong Limited
''Ubitricity''	ubitricity Gesellschaft für verteilte Energiesysteme mbH, a company
	incorporated in Germany with limited liability
	By Order of the Board
	MECOM Power and Construction Limited
	Kuok Lam Sek
	Chairman

Hong Kong, 14 September 2020

As at the date of this announcement, the executive Directors are Mr. Kuok Lam Sek and Mr. Sou Kun Tou, and the independent non-executive Directors are Ms. Chan Po Yi, Patsy, Mr. Cheung Kiu Cho, Vincent and Mr. Lio Weng Tong.

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