Analysis of Global Power Market

Competitive Landscape of China's Power Operation Market Competitive Edges of the Company 1 2 Leading Position in Hydropower Generation Business Diversification in Power Generation By controlling the entity which possesses the exclusive rights of developing Yalong River hydropower in Sichuan province, the Company forms its core competence in hydropower generation. Yalong River ranks in the third place among 13 national hydropower bases in terms of installed capacity, which offers abundant natural resource advantage to the Company. Moreover, construction of large-scale hydropower generation plant and developing clean power generation in Yalong River are not only strongly encouraged by governmental policy but also in line with the implementation of the "West to East Electric Power Transmitting" strategy. Under the favorable regulatory context, the Company is well positioned to maintain its leading position in hydropower generation sector in China.. The Company diversifies its business operation portfolio in hydropower, thermal power, wind power and solar power generation, which enables the Company to minimise the effect of uncertainties caused by price volatility of different fuels, regulatory requirement change, natural environment change, etc.. Furthermore, backed up by its lucrative core hydropower generation segment, the Company is able to generate a predictable and sufficient cash flow, which can be utilised to finance its business expansion and investment. 3 Abundant Experience in Power Generation Industry The outstanding profit margins and sound financial performance achieved by the Company in recent years can be greatly attributed to wealthy industrial experience held by the company. Participating in the power generation industry for decades, the Company has accumulated abundant experiences relating to investment, construction, operation and maintenance of power generation projects. Moreover, the company possesses high-quality human resources, with employees holding college degrees or above taking more than 70% of all headcounts. Besides, the company has been proactively engaged in overseas power engineering businesses (e.g. offshore wind power generation project in UK) through merge and acquisition, which grants the company more opportunities to succeed when exploring international power market. Source: Company Report, Frost & Sullivan FROST SULLIVAN 91

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