Datang International Power Generation Co., Ltd.

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	FAQ Message

As the current gearing ratio of the Company is relatively high, and many projects of the Company will still be under construction in the coming years, what is the plan of the Company for financing those projects in order to ensure their progresses are on

Since the completion of the initial public offering of its A shares at the end of 2006, the asset-to-liability ratio of the Company has increased year by year following the successive commencements of operation of the Company?s projects under construction over the past few years. This was mainly due to the 20% capital ratio of power generation projects required by the State which led to a high asset-to-liability ratio of 80% for newly commenced projects, as well as due to the concentrated commencements of newly constructed projects. Accordingly, the consolidated asset-to-liability ratio of the Company surged. In addition, the price hike of domestic coal in 2008 led to a substantial drop in the profitability of power generation companies, and the consequential drop in net asset value was also another reason for the increase in the asset-to-liability ratio.

Taking into account its long-term development, the Company has re-organised its preliminary projects according to the strategy of ?Accelerating some projects and slowing down others; Advancing the progress of some projects and holding back others; Ensuring the development of some projects and suppressing others?. A batch of projects will still be under construction in the coming two years. To ensure the smooth progress of such projects, the Company has formulated a comprehensive plan to proactively finance these projects through fully utilising different financing channels such as domestic bank loans, interim notes, corporate bonds and additional issuance of share capital. It is expected that the capital required for the projects-under-construction of the Company will be fully assured under the gradual implementation of such financing plans.