Hesheng Silicon Industry Announcement No .: 2019-052 Hesheng Silicon Industry Co., Ltd. Announcement on Signing a Strategic Cooperation Framework Agreement The board of directors and all directors of the company guarantee that the contents of this announcement do not contain any false records, misleading statements or major omissions, and that the content is true Individual, joint and several liability for accuracy, accuracy and completeness. Important Contents Note: Name of the proposed investment: Hesheng Silicon Industry Zhaotong Hydropower Silicon Circular Economy Project


Risk warning: 1. The agreement signed this time is a framework agreement and there are no binding clauses. The proposed investment project is yet to be approved by the shareholders' general meeting and has not yet been approved by the government department. The land involved has not yet been obtained. Uncertainty, in the subsequent implementation process there may be the possibility of adjusting the planning content due to factors such as the actual development of the company or changes in the market environment;


2. The project has not yet been demonstrated for feasibility, and there are still uncertainties. The company will carry out relevant evaluation work as soon as possible, prepare a feasible research report, and perform the project in a timely manner in accordance with the relevant requirements of the Shanghai Stock Exchange Stock Listing Rules and other relevant requirements. Examination and approval procedures and information disclosure obligations; 3. In view of certain uncertainties in the progress and delivery time of the parcel of land, and the completion time of relevant approvals, there will also be various uncertainties during the project construction process, which will lead to the completion of the project and formal There is considerable uncertainty as to whether the commissioning can be completed on schedule. At the same time, national and local policy adjustments and changes in the market environment will also have an uncertain impact on income realization. It is expected that the project will not have a significant impact on the company's operating performance in the short term;


4. As the specific project has not yet been formally invested and constructed, it will not have a significant impact on the company's operating performance in 2019. Investors are advised to pay attention to investment risk. Based on the full analysis and demonstration of the status of the organic silicon industry at home and abroad, and market prospects, combined with the current status of Hesheng Silicon Industry Co., Ltd. (hereinafter referred to as the "company" or "Hesheng Silicon Industry") and its long-term development strategic goals, it actively connects and integrates into Yunnan Province to create " "Green Energy Brand" strategy and build an integrated industrial layout of hydropower silicon materials processing, effectively transform Zhaotong's clean energy advantages and high-quality silicon ore resources advantages into economic development advantages, promote Zhaotong's economic and social high-quality leapfrog development, and combine industrial development with poverty alleviation. Combine organically, drive large-scale poverty alleviation through large industries, solve the employment of the poor, especially those who have been relocated, consolidate Zhaotong's efforts to overcome poverty, leverage the company's silicon-based new materials research and development and financing advantages, and carry out comprehensive cooperation in the integrated development of hydropower silicon To build a silicon-based new material industrial cluster in Yunnan to achieve mutual benefit and win-win, the company signed a Strategic Cooperation Framework Agreement with the Yunnan Provincial People's Government on December 5, 2019, and plans to build the Hetong Silicon Industry Zhaotong Hydropower Silicon Circular Economy in Zhaotong, Yunnan. Project, specific implementation content including annual output 800,000 tons of organic silicon monomer (including supporting 800,000 tons of industrial silicon, 500,000 tons of coal-based organic raw materials) and downstream processing projects of siloxane, of which: the first phase of construction is 400,000 tons of organic silicon monomer 10,000 tons of industrial silicon) and siloxane downstream deep-processing project; the second-phase construction of an annual output of 400,000 tons of organic silicon monomer (including supporting 400,000 tons of industrial silicon, 500,000 tons of coal-based organic raw materials) and siloxane downstream deep processing project. This investment project has not been demonstrated for feasibility, there is still uncertainty, and it still needs to be reviewed and approved by the shareholders' general meeting. It has not yet been approved by the government department. The land involved has not been obtained, and there is uncertainty in the implementation of the project. There may be reasons for the subsequent implementation process. The actual development of the company or the changes in the market environment may adjust the planning content. Therefore, the elements of planning and construction projects mentioned in this announcement are subject to greater uncertainty. Investors are advised to pay attention to investment risks. The planning is still underway, and the relevant feasibility study report is still under preparation. It is not ready to submit to the shareholders' meeting. The company will pay close attention to the follow-up matters involved in the project and perform the corresponding decision-making procedures and information disclosure obligations according to the progress of the project. The investment project still needs to be approved by relevant government departments. In view of the uncertainty of the parcel delivery progress and delivery time, as well as the completion time of the relevant approval items, various uncertain factors will also be faced during the project construction process, which will lead to whether the project completion and formal commissioning can be completed on schedule. Uncertainty. At the same time, national and local policy adjustments and changes in the market environment will also have an uncertain impact on income realization. Therefore, the project's operating performance is uncertain, and it is expected that the project will not have a significant impact on the company's operating performance in the short term. The above matters are not connected transactions, nor do they constitute a major asset reorganization under the Measures for the Administration of Major Asset Reorganizations of Listed Companies. The company will perform the approval procedures and information disclosure obligations in a timely manner in accordance with the progress of the cooperation and in accordance with relevant requirements such as the Shanghai Stock Exchange's Stock Listing Rules. Investors are reminded to pay attention to investment risks.