JiaXing Gas : CONNECTED TRANSACTION IN RELATION TO THE LANDSCAPE CONSTRUCTION SERVICE AGREEMENT

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

JiaXing Gas Group Co., Ltd.*

ྗጳ̹ዷंණྠٰ΅Ϟࠢʮ̡

(A joint stock company incorporated in the People's Republic of China with limited liability)

(Stock Code: 9908)

CONNECTED TRANSACTION

IN RELATION TO THE

LANDSCAPE CONSTRUCTION SERVICE AGREEMENT

LANDSCAPE CONSTRUCTION SERVICE AGREEMENT

On 29 March 2021, Jiaran Construction, a wholly-owned subsidiary of the Company, entered into the Landscape Construction Service Agreement with Qingyuan Hot Spring. Pursuant to the Landscape Construction Service Agreement, Jiaran Construction agreed to provide landscape construction services to Qingyuan Hot Spring with a term from 30 March 2021 to 25 August 2021, subject to and in accordance with the terms and conditions of the Landscape Construction Service Agreement.

IMPLICATIONS UNDER THE LISTING RULES

As at the date of this announcement, Qingyuan Hot Spring is a non-wholly owned subsidiary of Qingyuan Tourism Group, which is in turn owned as to approximately 33.71% by Taiding and approximately 32.88% by Jiaxing Qingyang Trading Company Limited* (ྗጳ̹૶ජ൱׸Ϟࠢʮ̡), a company owned as to 74% by Mr. Sun. Taiding is a Substantial Shareholder of the Company which is wholly owned by Mr. Sun and his spouse. Qingyuan Hot Spring is regarded as a connected person under Chapter 14A of the Listing Rules by virtue of it being a subsidiary of a 30%-controlled company of Taiding and Mr. Sun.

As all the applicable percentage ratios (other than the profit ratio) exceed 0.1% but are less than 5%, the Landscape Construction Service Agreement and the transaction contemplated thereunder are subject to announcement requirement but exempt from circular and independent shareholders' approval requirements under Chapter 14A of the Listing Rules.

INTRODUCTION

The Board wishes to announce that on 29 March 2021, Jiaran Construction, a wholly-owned subsidiary of the Company, entered into the Landscape Construction Service Agreement with Qingyuan Hot Spring. Pursuant to the Landscape Construction Service Agreement, Jiaran Construction agreed to provide landscape construction services to Qingyuan Hot Spring for a period from 30 March 2021 to 25 August 2021, subject to and in accordance with the terms and conditions of the Landscape Construction Service Agreement.

LANDSCAPE CONSTRUCTION SERVICE AGREEMENT

A summary of the principal terms of the Landscape Construction Service Agreement are set out below:

Date:	29 March 2021
Parties:	(1) Jiaran Construction (as service provider); and
(2) Qingyuan Hot Spring
Service:	Pursuant to the Landscape Construction Service Agreement,
Jiaran Construction shall provide landscape construction
services to Qingyuan Hot Spring in relation to the landscape
construction of Yunquan Conference Center.
Location of service:	Northern area of Jiahu Expressway and the west side of Puxin
Expressway in Xinsheng Town, Xiuzhou District, Jiaxing City.
Term:	From 30 March 2021 to 25 August 2021
Service fee:	The total service fee shall be capped at RMB11.298 million,
subject to and actual engineering volume and expenses incurred
make final service fee settlements in accordance with relevant
laws and regulations.

The service fee shall be payable in cash by Qingyuan Hot Spring in the following manner based on the monthly construction progress, and the payment of migrant workers' wages will be implemented pursuant to the existing regulations of Xiuzhou District:

• (1) monthly payment is payable to cover the cost of 70% of actual completed and qualified constructions during the respective month;

• (2) up to 80% of the total service fee shall be payable after completion of inspection and acceptance of the construction;

• (3) up to 97% of the total service fee shall be payable after the passing of site audit upon completion of the landscape construction project; and

• (4) the remaining 3% of the total service fee shall be retained as the quality warranty fee, which will be refunded without interest within 28 days after the expiration of two (2) years from the date of passing the inspection upon the completion.

The total service fee is determined in accordance with normal commercial terms with reference to market prices and price guidelines for similar services issued by local governments.

Warranty period:

Two (2) years commencing from the date of passing the inspection of the landscape construction project upon the completion.

INFORMATION ABOUT THE PARTIES INVOLVED

The Company principally engages in the distribution and sales of gas in Jiaxing, the provision of construction and installation services of gas pipeline network in Jiaxing. Jiaran Construction, a wholly-owned subsidiary of the Company, principally engages in pipeline installation and maintenance, municipal engineering and related infrastructure construction services.

Qingyuan Hot Spring is a limited liability company established in China on 10 April 2013. It primarily engages in public baths (hot spring baths), cafes, beauty shops; catering service; hot spring management service; chess and card entertainment activities, fitness service, health massage service, conference service, accommodation service, laundry service; sales of food, daily necessities and clothing (items that are subject to approval in accordance with the law and can only be carried out after the approval of the relevant departments).

REASONS FOR AND BENEFITS OF ENTERING INTO THE LANDSCAPE CONSTRUCTION SERVICE AGREEMENT

Jiaran Construction, a wholly-owned subsidiary of the Company, has been engaging in municipal engineering construction services, such as pipeline installation and maintenance, for a long time. The Directors believe that entering into Qingyuan Hot Spring Landscape Construction Service Agreement enables Jiaran Construction further expand its business. In addition, the Directors consider that entering into Qingyuan Hot Spring Landscape Construction Service Agreement is in line with the goal of strengthening Jiaran Construction's market position in municipal engineering field.

The Directors (including independent non-executive Directors) believe that the Landscape Construction Service Agreement and the transactions contemplated thereunder were entered in the ordinary and usual course of business of the Group and are fair, reasonable and on normal commercial terms and in the interests of the Company and its shareholders taken as a whole.

The Landscape Construction Service Agreement has been approved by the Board. As Mr. Sun is materially interested in the transactions contemplated under the Landscape Construction Service Agreement, he has abstained from voting on the relevant resolutions of the Board approving the same.

IMPLICATIONS UNDER THE LISTING RULES

As at the date of this announcement, Qingyuan Hot Spring is a non-wholly owned subsidiary of Qingyuan Tourism Group, which is in turn owned as to approximately 33.71% by Taiding and approximately 32.88% by Jiaxing Qingyang Trading Company Limited* (ྗጳ̹૶ජ൱ ׸Ϟࠢʮ̡), a company owned as to 74% by Mr. Sun. Taiding is a Substantial Shareholder of the Company which is wholly owned by Mr. Sun and his spouse. Qingyuan Hot Spring is regarded as a connected person under Chapter 14A of the Listing Rules by virtue of it being a subsidiary of a 30%-controlled company of Taiding and Mr. Sun.

As all the applicable percentage ratios (other than the profit ratio) exceed 0.1% but are less than 5% (on annual basis), the Landscape Construction Service Agreement and the transactions contemplated thereunder are subject to the reporting and announcement requirements, but exempt from independent shareholders' approval requirements under Chapter 14A of the Listing Rules.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following expressions shall have the following meanings:

"Board"	the board of Directors
"Company"	JiaXing Gas Group Co., Ltd.* (ྗጳ̹ዷंණྠٰ΅Ϟࠢʮ̡),
a joint stock liability company established under the laws of the
PRC, whose issued H Shares are listed on the main board of the
Stock Exchange
"Substantial	has the meaning ascribed to it under the Listing Rules, for
Shareholder(s)"	the purpose of this announcement only, means Taiding, the
substantial shareholder of the Company
"Directors"	the directors of the Company
"Group"	the Company and its subsidiaries
"H Share(s)"	ordinary share(s) in the capital of the Company with a nominal
value of RMB1.00 each, which are listed on the Stock Exchange
and subscribed and traded in Hong Kong dollars
"Jiaran Construction"	Jiaxing Jiaran Construction Company Limited* (ྗጳ̹ྗ
ዷܔணϞࠢʮ̡), formerly known as Jiaxing Jia'an Gas
Technology Service Company Limited* (ྗጳ̹ԳτዷंҦஔ
؂ਕϞࠢʮ̡), a limited liability company established under
the laws of the PRC on 19 December 2006 and a direct wholly-
owned subsidiary of the Company
"Landscape Construction	the agreement dated 29 March 2021 and entered into between
Service Agreement"	Jiaran Construction and Qingyuan Hot Spring in relation to
the provision of landscape construction service by Jiaran
Construction to Qingyuan Hot Spring
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock
Exchange
"Mr. Sun"	Mr. Sun Lianqing (࢑ஹ૶), chairman of the Board, an
executive Director and Substantial Shareholder of the Company
"Qingyuan Hot Spring"	Jiaxing Qingyuan Hot Spring Management Co., Ltd.* (ྗ
ጳ̹૶๕๝ݰ၍ଣϞࠢʮ̡), a limited liability company
established under the laws of the PRC on 10 April 2013 and a
non-wholly owned subsidiary of Qingyuan Tourism Group

"Qingyuan Tourism Group" Zhejiang Qingyuan Tourism Development Group Company

Limited* (एϪ૶෤༷ࣚ೯࢝ණྠϞࠢʮ̡), a limited liability company established under the laws of the PRC on 29 September 2017 and a 30%-controlled company (as defined in the Listing Rules) of Taiding

"Taiding"

Zhejiang Taiding Investment Company Limited* (एϪइཻҳ ༟Ϟࠢʮ̡), a limited liability company established under the laws of the PRC on 26 January 2011, a Substantial Shareholder which is owned as to 65% by Mr. Sun and 35% by Ms. Xu Lili, the spouse of Mr. Sun

"Stock Exchange" The Stock Exchange of Hong Kong Limited

By order of the Board

JiaXing Gas Group Co., Ltd.*

Sun Lianqing Chairman and Executive Director

Jiaxing, The PRC

29 March 2021

As at the date of this announcement, the Board of Directors comprises Mr. Sun Lianqing and Mr. Xu Songqiang as executive Directors; Mr. He Yujian, Mr. Zheng Huanli and Mr. Fu Songquan as non-executive Directors; Mr. Xu Linde, Mr. Yu Youda and Mr. Cheng Hok Kai Frederick as independent non-executive Directors.

*

For identification purpose only