StockCode:200771StockID:HangqilunBAnnouncementNo.2017-71

                       HangzhouSteamTurbineCo.,Ltd.

             AnnouncementonApplyingforCreditlineandRelated

                       TransactionstoBankofHangzhou

    ThemembersoftheBoardandtheCompanyacknowledgebeingresponsibleforthe

truthfulness,accuracy,andcompletenessoftheannouncement.Notanyfalserecord,misleading

statementorsignificantomissioncarriedinthisannouncement.

    I.Summaryofrelatedtransaction

1.TheProposalaboutHangzhouSteamTurbineCo.,LtdplannedtomakeanapplicationtoBank

ofHangzhouforapplyingforRMB300millioncredit

                                             line.

2.Accordingtothe"StockListingRules"ofShenzhenStockExchange,asthecompany's

chairmanMr.ZhengBinconcurrentlyholdsthepostofdirectorofBankofHangzhou,andthe

companyisashareholderholdingmorethan5%stakeoftheBankofHangzhou,thistransaction

constitutesarelatedpartytransaction.

3．The15thmeetingofthe7thtermofBoardwasheldonOctober25,2017.DirectorZhengBin

waivedfromthevoting.Astheresolution,theproposalwaspassedwithall9votesinfavor,0

objectionand0waive.ThemeetingexaminedtheProposalonApplyingforCreditlineand

RelatedTransactionstoBankofHangzhouofthecompanywiththecontrollingshareholderof

relatedtransaction.Theindependentdirectorsofthecompanymadethepriorapprovaland

expressedtheindependentopinionsinconnectiontosuchrelatedtransaction.Theproposaldoes

notneedtobesubmittedtothecompany'sshareholders'generalmeetingfordeliberation.

4.Thetransactionneitherconstitutesamajorassetrestructuringnorconstitutesabackdoorlisting

accordingtoMeasuresfortheAdministrationofMajorAssetRestructuringofListedCompanies.

    II.Introductionofrelatedpartiesandrelationship

    (I)BasicInformation

    1.Name:BankofHangzhouCo.,Ltd.

    2.Registeredaddress:No.46,QingchunRoad,XiachengDistrict,Hangzhou

    3.Legalrepresentative:ChenZhenshan

    4.Registeredcapital:RMB3664.42888million

    5.Businessscope:：ThebusinessapprovedbytheChinaBankingRegulatoryCommission

undertherelevantlaws,administrativeregulationsandotherprovisions,andthebusinessscope

shallbesubjecttotheapprovaldocument.

    6.RecentfinancialinformationofBankofHangzhou

                                                                      InRMB’000

                 Turnover          NetProfit          Grossassets         Netassets

    Period  2016            13,732,844           4,020,927        720,424,176         38,561,695  2015            12,403,939           3,704,479        545,314,565        31,835,281（II）RelationshipThecompany's chairmanMr. ZhengBin concurrentlyholdsthepostofdirectorofBank ofHangzhou,and thecompany is ashareholderholding more than 5%stakeof theBank ofHangzhou,thereforethetransactionconstituteSARelatedtransaction.    III.Pricingpolicyandpricingbasisofthetransaction    TheCompanymadeanapplicationtoBankofHangzhouforapplyingforRMB300millioncreditlineinordertocarryoutthebusiness,adheredtoprincipalsofimpartial,reasonable,fair,win-winand market-oriented,withthemarket priceasthepricing basisandestimating thetransactionamount.    IV.PurposeandimpactofthetransactionThecompanymakinganapplicationtoBankofHangzhouforapplyingforcreditlineisformeetingthecompany'scapitalturnoverneedsandensuringthenormaloperationofthecompany'sproductionandbusinessactivities,whichisconducivetothecompanyoptimizingthefinancialstructure andimproving the capitalutilization. In the transaction,there is nocircumstancejeopardizingtheinterestsofthecompanyandsmallandmediumshareholders.     V.Thereviewprocedurethattherelatedtransactionshouldbeperformed    1.OnOctober25,2017,thecompanyheldthe15thmeetingofthe7thboardofdirectors,inwhichthe"ProposalaboutHangzhouSteamTurbineCo.,LtdmakinganapplicationtoBankofHangzhouforapplyingforRMB300millioncreditlinewasexaminedandapproved.Thisrelatedtransactionhasgottentheexanteapprovalofthecompany'sindependentdirectors,andtheindependentdirectorsagreedtosubmittheproposaltotheBoardmeetingfordeliberation.    2.Independentdirectors'opinion:TheCompanymakinganapplicationtoBankofHangzhouforapplyingforcreditlineisformeetingthecompany'scapitalturnoverneedsandimprovingthecapitalutilization.Duringthetimetheboardofdirectorsdeliberatedtherelatedtransaction,the

relateddirectorsabstainedfromthevoting,andthevotingprocedureoftherelatedtransactionwas

inlinewithlawsandregulations,showedtheprincipleofopenness,fairnessandimpartiality,and

therewasnocircumstancejeopardizingtheinterestsofthecompanyandthesmallandmedium

shareholders.    3.Thetransactionamountoftherelatedtransactiondoesnotexceedthe5%ofthecompany'slatestauditednetassets,sothetransactionisnotrequiredtobesubmittedtotheshareholders'meetingfordeliberation.    VI.Documentsforreference    1.Resolutionsofthe15thmeetingofthe7thTermofBoard;     2.Thepriorapprovaloftheindependentdirectors     Thisannouncementisherebymade.      TheBoardofDirectorsofHangzhouSteamTurbineCo.,Ltd.     October25,2017