The Board of Zhuzhou CRRC Times Electric Co., Ltd. on 30 October 2018, announced that the Company, Chongqing Changan, CSG Electric Power, Zhuhai Gree, Tianjin Zhonghuan, Hunan Xiangtou, Times Electric Vehicle and Times New Material entered into the JV Agreement for the establishment of the JV Company in Zhuzhou, Hunan Province, the PRC. As at the date of this announcement, CRRCG directly and indirectly holds approximately 51.43% equity interest in CRRC in aggregate. CRRC is an indirect controlling shareholder of the Company holding indirectly approximately 52.38% of the shares of the Company in aggregate.

CRRCG directly and indirectly holds approximately 87.37% and 51.02% equity interest in Times Electric Vehicle and Times New Material in aggregate respectively. Each of Times Electric Vehicle and Times New Material is an associate of the controlling shareholder of the Company and is therefore a connected person of the Company under the Listing Rules. Accordingly, the establishment of the JV Company contemplated under the JV Agreement constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules.

The term of operation of the JV Company is 30 years from the date of establishment of the JV Company. The Shareholders shall decide whether to extend the term of operation of the JV Company at least six months prior to the expiry of the term, subject to the approval of the relevant PRC authorities. The JV Company will be established in Zhuzhou, Hunan Province, the PRC with the intention to, among other things, (i) create a power semiconductor device and application industry collaborative innovation base; (ii) promote the forward-looking nature of the new power semiconductor industry, basic key technology innovation, intellectual property transformation, commercial application, commercial promotion and industrial services through market adjustment; (iii) facilitate the coordinated development of the Shareholders and alliance enterprises within the industry; and (iv) boost the development of the power semiconductor industry in the PRC.

The establishment of the JV Company is subject to the approval of the relevant PRC authorities which may or may not be obtained. As such, shareholders of the Company and potential investors should exercise caution when dealing in the securities of the Company.