Company Introduction

China Electric Power Technology Holdings Limited (“the Group”) is listed at Hongkong Pioneering Board (stock code: HK.8053). Its predecessor is A&K Educational Software Holding Limited, which formally changed its name to China Electric Power Technology Holdings Limited in December 2008. The Group is currently involved in the new technology field of China power industry, including building, maintaining and operating of smart grid, power market and transaction platform, clean energy solution and related services, and engaged in the education information and information security fields at the same time.

Smart grid technology and application are in the ascendant internationally, especially in America and Europe. For China, smart grid appears at the mature time, and also the smart grid is inevitable for solving our country’s grid problems and low carbon economy development, and future smart grid will be complete system integrating power flow, information flow and business flow. In the late May, the State Grid announced the smart grid development planning, proposed goal of building information, digitalization, automation and interaction-based "strong smart grid”. It’s primarily estimated that our smart grid first will be trialed in part areas, and then promoted nationwide, and finally to be completed in 2020. It’s estimated that by 2020, total investments in smart grid will be higher than 200 billion Yuan, and the major frame building will be completed before 2015.

The national new energy development planning is about to promulgate currently, and the development goals of new energy planning being formulated are adjusted: adjust the scale of wind power generation from 30,000,000 Kw primarily set at the beginning of 2007 to 100,000,000 Kw by 2020, and adjust the scale of solar power generation from 1,800,000 Kw to over ten million Kw.

In the context of deepening power reform domestically, conditions for building power market are basically mature, and power enterprises and users currently demand building of power exchange market mechanism. The governmental work report on NPC & CPPCC held this year proposed: “promote reform of resource product price, continue deepening reform of electricity price, gradually improve on-grid price and power transmission/distribution price, improve selling price to form mechanism, and properly sort out the relationship between coal and electricity price”. It’s expected that the power market building, electricity price reform and separation between main business and auxiliary business respectively taken charge by the State Electricity Regulatory Commission, Development and Reform Commission, State Asset Regulatory Commission will make some progress this year. Further, the State Electricity Regulatory Commission will continue promoting the power market construction, and gradually build regulatory bilateral transaction market by starting with major users’ direct power purchase pilot. Such reform will be trialed in Inner Mongolia this year, and we hope to execute pilot program at partial provinces and cities as soon as possible. Governments will guide the reform at the early stage, and the final goal is to allow the power enterprises and users to conduct direct transaction via the power generation market platform.

China power industry faces great development opportunities under the strong impact of national policies. In 2009, the Group will keep in pace with the national power reform so to seek and grab more business opportunities. Based on the existing technical storage, the Group will, as planned, release a batch of self-developed products (mainly the secondary system) and introduce agent products (mainly the primary equipment) by focusing on the smart grid concept, so the Group will occupy a suitable niche in the future building investments. Meanwhile, the Group will offer multi-directional solutions and new products by focusing on the “strong smart power marketing system”. The Group is about to release a serial of new products against smart power marketing system, including 95598 Two-way Service System, large users (and service agent) self-service system, distribution network smart management system (inclusive of GIS), and power marketing data collection system.

Also, the Group plans to focus on the development of power market technical system, so to adapt to the new situation of power market. In 2009, the Group will closely cooperate with China Institute of Electric Power Research and continue large-scale investment so to develop new-generation technical support system of power market technology, which will not only be capable of providing internet access function at net price on the power generation side, but also the quotation electricity purchase function at the user side. It’s estimated that with the deepening of power market reform in 2010, the technical support system field alone has market capacity up to 3 billion approx.

The Group will insist on the cooperation and win-win strategies. Within the boundary of China, the Group closely and strategically cooperated with China Institute of Electric Power Research, affiliated to the State Grid Corporation of China, and provided the latter with technical support and service, aiming to integrate talents, products and markets, and to achieve benefit sharing, and further to spread the power marketing system to Ningxia, Hunan, Anhui, Tibet and Inner Mongolia, and it’s also gradually expanding its market shares. Presently, both parties are cooperating to develop new generation technical support system for the power market under the direction of China Power Inspection Committee, and will execute pilot program, which would be significant for China power market reform. Outside China, the Group is negotiating for cooperation with internationally noted power groups and investment companies, and is setting foot in many fields via cooperation, acquisition, merger and other methods by taking advantage of its technology, product and fund, striving to lead the new power technical field.