Dongfang Electric : ANNOUNCEMENT IN RESPECT OF APPROVAL OBTAINED FROM THE STATE-OWNED ASSETS SUPERVISION AND ADMINISTRATION COMMISSION OF THE STATE COUNCIL IN RELATION TO THE RESTRICTED A SHARE INCENTIVE SCHEME FOR 2019

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ANNOUNCEMENT IN RESPECT OF APPROVAL OBTAINED FROM THE STATE-OWNED ASSETS SUPERVISION AND ADMINISTRATION COMMISSION OF THE STATE COUNCIL IN RELATION TO THE RESTRICTED A SHARE INCENTIVE SCHEME FOR 2019

This announcement is made by Dongfang Electric Corporation Limited (the "Company") pursuant to Rule 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

The board of directors of the Company hereby announces that on 20 November 2019, the Company received the Approval in Relation to the Restricted A Share Incentive

Scheme for 2019 of Dongfang Electric Corporation Limited (Guo Zi Kao Fen [2019] No. 680) 《( 關 於 東 方 電 氣 股 份 有 限 公 司2019 年A 股 限 制 性 股 票 激 勵 計 劃 的

批 覆》) ( 國 資 考 分[2019] 680 號) issued by the State-owned Assets Supervision and Administration Commission of the State Council. The main contents are as follows:

1. Approved in principle of the Company's implementation of the restricted share incentive scheme.
2. 1. The scope of the restricted shares participants includes directors, senior and middle management, and frontline leaders (excluding supervisors and independent non-executive directors) of the Company (including its branches and subsidiaries) and the number of proposed participants shall not exceed 800.

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1. 1. The lock-up period for the restricted shares granted is 2 years (24 months) and the unlocking will be conducted in 3 years in proportion of 1/3, 1/3 and 1/3, respectively upon expiry of the lock-up period.
   2. The number of restricted shares to be granted shall be managed within 30,000,000 shares (accounting for 0.97% of the Company's total share capital), of which the maximum number of restricted shares to be granted to any individual participant is 150,000 shares. The specific number of restricted shares to be granted shall be adjusted based on the actual grant price and expected return. The source of the shares is from the additional issuance of the Company's A shares to the participants.
2. Approved in principle of the performance appraisal targets for the Company's restricted share incentive scheme.
3. 1. Performance conditions at the grant of restricted shares: for the financial year prior to the year of grant, the net profit attributable to the shareholders of the Company shall not be less than 6% and not lower than industry average level; the weighted average return on net assets shall not be less than 3.5% and not lower than industry average level; the improved economic value added is positive.
   2. Performance conditions at unlocking of restricted shares: for the financial year prior to the year of unlocking, the compound growth rate of the net profit attributable to the shareholders of the Company shall not be less than 10% (on the basis of 2018) and not lower than industry average level; the weighted average return on net assets shall not be less than 4%, 4.5% and 5%, respectively, and not lower than industry average level; the improved economic value added is positive.

The Company takes the above performance appraisal targets as the conditions for the Company to implement the restricted share incentive scheme. It will strengthen the management, appraisal and supervision of the scheme, closely linked the grant and unlocking of the restricted shares with the Company's results and individual's performance appraisal in practice, improving the performance appraisal system and reinforce the incentive and restraint mechanism.

By Order of the Board

Dongfang Electric Corporation Limited

Gong Dan

Company Secretary

Chengdu, Sichuan, the PRC

20 November 2019

As at the date of this announcement, the directors of the Company are as follows:

Directors:	Zou Lei, Yu Peigen, Huang Wei, Xu Peng and Bai Yong
Independent Non-executive	Gu Dake, Xu Haihe and Liu Dengqing
Directors:

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