Shanghai Electric : ANNOUNCEMENT ON THE TERMINATION OF THE PROPOSED NON-PUBLIC ISSUANCE OF A SHARES

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SHANGHAI ELECTRIC GROUP COMPANY LIMITED

上海電氣集團股份有限公司

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

(Stock Code: 02727)

ANNOUNCEMENT ON THE TERMINATION OF THE PROPOSED NON-PUBLIC

ISSUANCE OF A SHARES

References are made to the announcement of Shanghai Electric Group Company Limited (the "Company") dated 26 March 2021 and circular of the Company dated 31 March 2021 in relation to, among other things, the proposed Non-public Issuance of A Shares by the Company and, pursuant to which, the Company proposed to issue a maximum of 1,570,597,109 new A Shares to no more than 35 specific target subscribers by way of non-public issuance, and the proceeds to be raised is expected to be no more than RMB5,000 million. Unless otherwise indicated, capitalized terms used in this announcement shall have the same meaning as defined in the aforementioned announcement and circular.

The Company convened the meeting of the Board and meeting of the supervisory committee of the Company on 11 May 2021, in which the Resolution in relation to the Termination of the Proposed Non-public Issuance of A Shares and the Withdrawal of the Consideration of the Relevant Resolutions from the General Meeting was considered and approved. The relevant matters are hereby announced as follows:

I. REASONS FOR TERMINATION OF THE NON-PUBLIC ISSUANCE OF A SHARES BY THE COMPANY

In view of the recent share price performance of the A shares of the Company in the secondary market, the issue price under the proposed non-public issuance of A shares of the Company may be lower than the net asset value per share of the Company should the proposed non-public issuance of shares be conducted. In order to safeguard the rights and interests of state-owned assets authorities and to avoid excessive dilution of the shareholders' equity interests, after comprehensive analysis and careful consideration, the Company decided to terminate the proposed non-public issuance of A shares of the Company and withdraw the relevant resolutions regarding the proposed Non-public Issuance of A Shares from the EGM of the Company.

1. EFFECT OF THE TERMINATION OF THE NON-PUBLIC ISSUANCE OF A SHARES ON THE COMPANY
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The Company will continue with the projects to be invested in with the proceeds from the proposed Non-public Issuance of A Shares through self-financing and other means according to the actual status of the projects, and will select an appropriate time window to relaunch the non-public issuance of A shares. The termination of the proposed Non-public Issuance of A Shares will not have any material adverse impact on the production, operation and development strategies of the Company, nor will it prejudice the interests of the shareholders of the Company, especially those of the minority shareholders.

1. PROCEDURES FOR CONSIDERATION OF THE COMPANY'S TERMINATION OF THE PROPOSED NON-PUBLIC ISSUANCE OF A SHARES OF THE COMPANY

On 11 May 2021, the Company convened the meeting of the Board and the meeting of the supervisory committee of the Company, at which the Resolution in relation to the Termination of the Proposed Non-public Issuance of A Shares and the Withdrawal of the Consideration of the Relevant Resolutions from the General Meeting was considered and approved, and the Board and the supervisory committee of the Company agreed to terminate the proposed non- public issuance of shares. All independent non-executive Directors of the Company have expressed their independent opinions of consent on this resolution. The matter shall not be subject to the consideration at a general meeting.

IV. OPINIONS OF THE INDEPENDENT NON-EXECUTIVE DIRECTORS OF THE COMPANY

The independent non-executive Directors of the Company are of the view that: the termination of the proposed Non-public Issuance of A Shares of the Company was a decision made after prudent consideration, aiming to safeguard the rights and interests of state-owned assets authorities and to avoid excessive dilution of the equity interests of the shareholders of the Company, which has complied with the relevant requirements of the Articles of Association, and the consideration procedures are legitimate and valid. The convening and voting procedures of the meeting of the board of directors are in accordance with the requirements under relevant laws and regulations. The termination of the proposed Non-public Issuance of A Shares will not have any material adverse impact on the production, operation and development strategies of the Company, nor will it prejudice the interests of the shareholders of the Company, especially those of the minority shareholders. Therefore, the independent non- executive Directors unanimously agree on the termination of the proposed Non-public Issuance of A Shares of the Company.

V. OPINIONS OF THE SUPERVISORY COMMITTEE

The supervisory committee is of the view that: after comprehensive analysis and careful consideration, the Company decided to terminate the proposed Non-public Issuance of A Shares, and such termination will not have any material adverse impact on the production, operation and development strategies of the Company, nor will it prejudice the interests of the shareholders of the Company, especially those of the minority shareholders. The supervisory committee agreed to terminate the proposed Non-public Issuance of A Shares and withdraw

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the relevant resolutions in relation to the Non-public Issuance of A Shares from the EGM of the Company.

By order of the Board

Shanghai Electric Group Company Limited

ZHENG Jianhua

Chairman of the Board

Shanghai, the PRC, 11 May 2021

As at the date of this announcement, the executive directors of the Company are Mr. ZHENG Jianhua, Mr. HUANG Ou and Mr. ZHU Zhaokai; the non-executive directors of the Company are Ms. YAO Minfang and Ms. LI An; and the independent non-executive directors of the Company are Dr. XI Juntong, Dr. XU Jianxin and Dr. LIU Yunhong.

* For identification purpose only

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