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Chairman's Statement

Dear shareholders,

In 2021, our country built up a moderately prosperous society in all respects as scheduled and embarked on a journey to fully build a modern socialist China. The novel coronavirus pneumonia epidemic (the “COVID-19” or “pandemic”) has had far-reaching impacts. The evolution of the unprecedented changes in a hundred years has been accelerating, and the energy system and development model have been entering a new phase dominated by non-fossil energy. China’s efforts in adjustment of domestic energy structure and power market reform have been enhanced to accelerate the construction of a modern energy system. In the face of the complex and severe external environment, we have concentrated our efforts, integrated development and security, and properly responded to the challenges of the pandemic, thereby maintaining sound operations. The Company has achieved good operating results. This is attributable to the long-term and unremitting efforts of all employees and the trust and full support of our shareholders, customers, partners, national ministries and local governments and other related parties. On behalf of the Board, I would like to express my sincere gratitude to our shareholders and all those who support the development of the Company.

For the year, the Group recorded revenue of approximately RMB80,679 million, representing an increase of 14.3% over that of 2020, and net profit attributable to shareholders of the parent company of approximately RMB9,733 million, representing an increase of 1.8% over that of 2020. The Board recommended a payment of a dividend of RMB0.084 (tax inclusive) per share for the year, representing an increase of 5.0% as compared with 2020.

The dividend distribution plan for the five years from 2021 to 2025 was proposed last year and approved at the general meeting. The plan aimed to achieve a moderate increase in the annual dividend ratio based on the dividend ratio in 2020, and provide shareholders with stable and reliable returns. The dividend ratio we recommend this year is 43.58%, representing an increase of 1.33 percentage points over that of 2020.

At present, our country has entered a new stage of historical development, and the State has put forward the goals of “achieving peak carbon dioxide emissions” and “carbon neutrality” (the “Dual Carbon Goals”) to vigorously promote green low-carbon development and ecological civilization construction. The Government Work Report (《政府工作報告》) for 2021 clearly states “taking active and well-ordered steps to develop nuclear energy on the premise of ensuring its safe use”, which clarified the status and role of nuclear power in China’s clean, low-carbon, safe and efficient energy system. The “Working Guidance for Carbon Dioxide Peaking and Carbon Neutrality in Full and Faithful Implementation of the New Development Philosophy” of the State Council of the Central Committee of the Communist Party of China (《中共中央國務院關於完整準確全面貫徹新發展理念做好碳達峰碳中和工作的意見》) published by the State once again proposed the idea of “taking active, safe and well-ordered steps to develop nuclear energy”. Nuclear power, as a stable and efficient clean energy source, is the only base load power source that can replace traditional fossil energy sources on a large scale. We believe that nuclear energy will need to play an important role in the transition of the energy structure under the Dual Carbon Goals. In 2021, the domestic power supply and demand situation was tight, and our nuclear power generating units fully embodied the advantages of base load power supply, so as to assume the responsibility of a nuclear power enterprise in addressing the power demand of society.

With the deepening of the national energy structure transformation and power market reform, the Company’s development and operation are bound to face various new requirements and changes. In order to lead the future development of the Group, the Board has approved the “Nuclear Energy Industry Medium and Long-term Development Strategy and 14th Five-Year Plan” (《核能產業中長期發展戰略及十四五規劃》) of the Group. We have always been committed to maintaining stable operations with a long-term perspective, focusing on nuclear power generation and nuclear energy professional services, striving to become a world-class nuclear energy enterprise with international competitiveness. By 2035, our nuclear power will achieve excellence in key performance indicators such as safety operations, project construction, and operational efficiency. At the same time, we will expand the use of nuclear energy for services such as heating and steam supply to an appropriate extent to enhance the comprehensive benefits of the comprehensive use of nuclear energy. In addition, we will also explore investments in ancillary energy storage projects related to nuclear power as appropriate. During the “14th Five-Year Plan” period, focusing on the five aspects comprising safety, quality and environmental protection, project construction, science and technology innovation, operational efficiency, and corporate management, the Company will align itself with the world-class goals, and achieve more efficient, more equitable, more sustainable and safer development with better quality.

We did not realize our target regarding new nuclear power project development in 2021. No new nuclear power project was approved. The approval of nuclear power projects was affected by many factors, and what we need to do still is to maintain our determination, carefully complete the preliminary preparation and related filing work of the projects, enhance the confidence of the country and the society in nuclear energy with safe and stable operation performance, and promote the early approval of new nuclear power projects.

The sustainable development of an enterprise cannot be achieved without strong R&D capabilities, and in order to adapt to the energy transformation, technological R&D is even more important. Data from the National Bureau of Statistics of the PRC shows that the national R&D investment funding from 2016 to 2020 maintained an annual growth of more than 10%. We have continued to increase our R&D investment and will adhere to this direction in the future so as to accelerate the R&D of advanced nuclear power technology, enhance the level of independent innovation, and actively explore the transformation and application of R&D results, thereby laying a solid foundation for the long-term development of the Company.

We attach great importance to the effective operation of the Board. In 2021, Mr. Tang Chi Cheung (“Mr. Tang”) joined the Board as an independent non-executive director from Hong Kong. The joining of Mr. Tang has increased the number of independent non-executive directors of the Board from three to four, and has also resulted in a more diverse professional background and working experience of the Board members. At the same time, Mr. Wang Hongjun, the general manager of our shareholder Guangdong Hengjian Investment Holdings Co., Ltd. (“Hengjian Investment”), joined the Board as a new non-executive director of the Company. These changes will further promote our corporate governance.

In 2021, we have achieved a good start to the “14th Five-Year Plan”. In 2022, the pandemic has yet to subside, and the domestic and international economic environment remain complicated, presenting both opportunities and challenges. We must adhere to our original aspiration of developing nuclear energy and guarding nuclear safety, and adhere to “seeking progress while maintaining stability”, pioneering innovations and hard work with a strong sense of crisis, urgency and mission, so as to promote the Group’s high-quality development, and create greater value for the society, shareholders and employees.

Yang Changli

Chairman

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