Dongjiang Environmental : INSIDE INFORMATION early termination of Guangfa Hengjin-Guangsheng Dongjiang Environmental Humen Luyuan PPP Project Asset Support Special Plan

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DONGJIANG ENVIRONMENTAL COMPANY LIMITED*

東江環保股份有限公司

(a joint stock limited company incorporated in the People's Republic of China)

（Stock code：00895）

INSIDE INFORMATION

EARLY TERMINATION OF THE "GUANGFA HENGJIN-

GUANGSHENG DONGJIANG ENVIRONMENTAL HUMEN LUYUAN

PPP PROJECT ASSET SUPPORT SPECIAL PLAN*"

This announcement is made by Dongjiang Environmental Company Limited* (the "Company") pursuant to Rule 13.09 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and the Inside Information Provisions (as defined in the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

At the 47th meeting of the sixth session of the board of directors (the "Board") convened by the Company on 5 February 2020, the "Resolution relating to the Early Termination of the "Guangfa Hengjin-Guangsheng Dongjiang Environmental Humen Lvyuan PPP Project Asset Support Special Plan*". In order to optimise the Company's debt structure and reduce financing costs, after careful consideration, the Company decided to terminate the "Guangfa Hengjin-Guangsheng Dongjiang Environmental Humen Lvyuan PPP Project Asset Support Special Plan* (廣發恒進-廣晟東江環保虎門綠源PPP項目資產支持專項計畫)" (the "Special Plan"). Details of which are as follows:

1. Basic information of the Special Plan

At the 67th meeting of the fifth session of the Board convened by the Company on 10 March 2017, the Board reviewed and approved "The Resolution on the Securitization of PPP Project Assets by Holding Subsidiaries of the Company". On 13 March 2017, the Company received the "No Objection Letter in relation to Confirmation of the Guangfa Hengjin-Guangsheng Dongjiang Environmental Humen Lvyuan PPP Project Asset Support Special Plan" (Shenzhen Stock Exchange Letter [2017] No. 103) issued by Shenzhen Stock Exchange and forwarded by the manager of the Special Plan, Guangfa Securities Asset Management (Guangdong) Co., Ltd. (the "GF Asset Management"). The manager of the Special Plan, GF Asset Management, has issued priority asset-backed securities and subordinated asset-backed securities under the Special Plan to qualified investors. After the capital verification conducted by Deloitte Touche Tohmatsu Certified Public Accountants LLP, the actual participation funds received for the Special Plan was RMB 320 million. The Special Plan was formally established on 15 March 2017. The basic information of the Special Plan is as follows:

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Class of	Credit	Size of issue	Expected	Expected	Method of
securities	ratings	（RMB'000）	return rate	maturity	repayment of the
					principal and
						interest
Humen	AAA	41,000	4.15%	21 March 2020	Repaid	semi-
Luyuan 01					annually
Humen	AAA	49,000	4.15%	21 March 2023	Repaid	semi-
Luyuan 02					annually
Humen	AAA	58,000	4.15%	21 March 2026	Repaid	semi-
Luyuan 03					annually
Humen	AAA	69,000	4.15%	21 March 2029	Repaid	semi-
Luyuan 04					annually
Humen	AAA	83,000	4.15%	21 March 2032	Repaid	semi-
Luyuan 05					annually
Subordinated	-	20,000	-	21 March 2032	There	is	no
Debt					expected	rate	of
					return,	and	the
					subordinated return
					will	be distributed
					after	the	principal
					of the senior debt is
					fully repaid.

1. Reasons for the early termination of the Special Plan

In recent years, as the People's Republic of China (the "PRC") has continuously enhanced its support to the development of the real economy, there has been relatively sufficient market liquidity in the PRC, and monetary easing policy remains. The cost of other financing methods of the Company is already lower than the actual comprehensive cost of the Special Plan. In order to optimise the Company's debt structure and reduce financing costs, after careful consideration and friendly communication with the holders of the Special Plan, the Company decided to terminate the Special Plan in advance.

1. Arrangements for the Early Termination of the Special Plan

After previous communication between the Company and the relevant parties in respect of the termination the Special Plan, Guangdong Provincial Financing Reguarantee Co., Ltd. (the "GD Reguarantee"), the guarantor of the Special Plan, has recently issued the "Written Notice of Early Termination of Option regarding Guangdong Provincial Financing Reguarantee Co., Ltd. - Guangdong Dongjiang Environmental Humen Luyuan PPP Project Asset Support Special Plan Guarantee Commitment" to GF Asset Management, the manager of the Special Plan. According to the relevant agreed provisions in the "Guangfa Hengjin-Guangsheng Dongjiang Environmental

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Humen Luyuan PPP Project Asset Support Special Plan Standard Terms and Conditions" and "Guangfa "Hengjin-Guangsheng Dongjiang Environmental Humen Lvyuan PPP Project Asset Support Special Plan Guarantee Commitment Letter", GD Reguarantee will terminate the guarantee obligation in advance. After consideration and approval by the 47th meeting of the sixth session of the Board of the Company, the Company agreed to terminate the Special Plan in advance and not to arrange replacement of the guarantor, and that all the expected return and principal of the priority asset-backed securities that have not been paid will be paid, totaling approximately RMB 272 million. The chairman of the Board and his authorised persons are authorised to execute the relevant documents and handle relevant procedures.

IV. Impact of the early termination of the Special Plan on the Company

As at the end of 2019, the Company has obtained bank credit facilities of approximately RMB8.516 billion, and has utilised RMB2.676 billion of the credit facilities. The remaining amount under the credit facilities are sufficient for the Company. The termination of the Special Plan will help the Company further reduce its integrated financial costs. Going forward, the Company will actively carry out financing projects such as medium-term notes based on its actual needs, in order to optimise the Company's debt structure and effectively supplement the Company's working capital.

Shareholders and potential investors of the Company are advised to exercise caution when dealing in the Shares.

By order of the Board

Dongjiang Environmental Company Limited*

Tan Kan

Chairman

Shenzhen, PRC

5 February 2020

As at the date of this announcement, the Board of Directors of the Company comprises two executive Directors, being Mr. Tan Kan, Mr. Yao Shu; four non-executive Directors, being Mr. Liu Boren, Mr. Huang Yiming, Mr. Lu Bei and Mr. Jin Yongfu and three independent nonexecutive Directors, being Mr. Zhu Zhengfu, Mr. Qu Jiu Hui and Mr. Wong Hin Wing.

* For identification purpose only

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