Original Headline:*ST Hareon Protocol to Add RMB2 Billion Raise the Price of Main Industry - PV Resumption of Trading on Date 19

*ST Hareon(600401) published plan of constant increase on the evening of 01/18/2016, Company planned to non-public issue more than 740.7407 million shares with RMB2.70/share,to raise funds total did not exceed RMB2 billion which would be used as purchasing fund of 100% stock right and 220MW grid-connected PV power station project of YuanYuan Water Supply. Corporate stock would resumption of trading on Date 19.

According to the plan, the purchaser of corporate stock: Huajun Power, Baohuaxing Asset and Rui Erde, they are a total of 3 specific investors. Among these companies,Huajun Power would purchase not exceed 591 million shares through cash and 80% purchasing fund of 100%stock right of YuanYuan Water Supply,  subscription ratio is 79.83%; Baohuaxing Asset would purchase not exceed 38.28 million shares through purchasing fund of 20%stock right of YuanYuan Water Supply, subscription ratio is 5.17%;Rui Erde controlled by YANG HUAI JIN is a related party of more than 5% corporate stock, it would purchase not exceed 111 million shares through cash, subscription ratio is 15%.

Plan shows, for the deal, 100% stock right transfer of YuanYuan Water Supply would instead of RMB517 million. The main business of YuanYuan Water Supply and its subsidiary corporation is the production and marketing of multi-crystalline silicon wafer and multi-crystalline silicon Solar cell/module.

Corporate representation, acquisition of YuanYuan Water Supply would improve Company's capacity of silicon wafer and cell/module. Such as silicon wafer increases 335MW, cell/module increases 500MW. It would improve the status quo of Company that the current capacity of silicon wafer and cell/module is insufficient, and the matched-degree of capacity is not high enough with silicon wafer and cell.

Besides, the total investment of grid-connected PV power station is RMB1.728 billion and Company plans to invest RMB1.483 billion(by funds raised), includes seven projects respectively in Henan, Hebei, Ningxia, Xinjiang, Inner Mongolia or other place, totally220MW. After calculating, under the condition that the operation and management of PV power station construction project is controlled by Company, all of financial internal rate of return (after tax) are more than 9%, the after-tax static investment payback period (excluding construction) of projects is not exceed 9 years.

Corporate representation, after the completion of the constant increase, manufacturing capacity of PV products will increase quickly, the scale of grid-connected PV power station will increase drastically, PV power station engineering contract, construction, transfer and operation will become an important part of Company's business and strategic development core in the future, it will drive Company's production and sales of cell and module. The implement of investment project by non-public issue will significantly improve Company's comprehensive competitiveness of upstream PV products and downstream PV power station, and promote Company's ability of sustainable development.

Source:STCN 01/18/2016 21:24:00