China Energy Limited ("China Energy") is believed to be China's largest producer of Dimethyl Ether ("DME") based on our current production capacity.

The Group is a pioneer in DME production and has a patented technology in DME production which enabled us to lower our capital expenditure thereby providing our product with a cost advantage.

DME is used as an economical blend stock for liquefi ed petroleum gas ("LPG") and is a potential clean, safe and economical alternative fuel for automotive. Presently, most of our DME are sold to LPG distributors, who blend it with LPG to improve the LPG combustion properties and reduce their average cost. Such fuel blend is sold to end-consumers for household and industrial uses.

As DME is an environmentally-friendly fuel with lower smoke emission rates compared to certain other conventional fuels, we believe DME has the potential to become a widelyaccepted alternative fuel in the future.

Our Group also produces methyl alcohol ("Methanol") which is primarily used for production of other chemicals, including as a feedstock for DME production. Besides using Methanol as a feedstock for our DME production, we also sell Methanol to third party chemical producers.

The Group's existing facilities are currently located in Linyi, Shandong Province, Nansha, Guangdong Province, and Zhangjiagang, Jiangsu Province. Our current DME capacity is 900,000 metric ton per annum.