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个股公告正文

金风科技:H股招股说明书(英文版)

日期:2010-06-07附件下载

    IMPORTANT: If you are in any doubt about any of the contents of this prospectus, you should obtain independent professional advice.
    XINJIANG GOLDWIND SCIENCE & TECHNOLOGY CO., LTD.*
    (a joint stock limited liability company incorporated in the People’s Republic of China)
    GLOBAL OFFERING
    Number of Offer Shares under the Global Offering : 395,294,000 H Shares (subject to the Over-allotment Option)
    Number of Hong Kong Public Offer Shares : 39,529,600 H Shares (subject to adjustment)
    Number of International Offer Shares : 355,764,400 H Shares (subject to adjustment and the
    Over-allotment Option)
    Maximum Offer Price : HK$23.00 per H Share (payable in full on application in Hong
    Kong dollars and subject to refund, plus brokerage of 1%, SFC
    transaction levy of 0.004% and Hong Kong Stock Exchange
    trading fee of 0.005%)
    Nominal Value : RMB1.00 per H Share
    Stock Code : 2208
    Joint Global Coordinators
    Joint Bookrunners
    Joint Sponsors
    Joint Lead Managers
    Global Financial Advisors PRC Financial Advisor
    Hong Kong Exchanges and Clearing Limited, The Stock Exchange of HongKong Limited and Hong Kong Securities Clearing Company Limited take no responsibility for
    the contents of this prospectus, make no representation as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss howsoever arising
    from or in reliance upon the whole or any part of the contents of this prospectus.
    A copy of this prospectus, having attached thereto the documents specified in “Appendix X— Documents delivered to the Registrar of Companies and Available for
    Inspection”, has been registered by the Registrar of Companies in Hong Kong as required by section 342C of the Companies Ordinance of Hong Kong (Chapter 32 of the
    Laws of Hong Kong). The Securities and Futures Commission and the Registrar of Companies in Hong Kong take no responsibility for the contents of this prospectus or
    any other document referred to above.
    The Offer Price is expected to be determined by agreement between us and the Joint Bookrunners (on behalf of the Underwriters) on the Price Determination Date. The
    Price Determination Date is expected to be on or around June 12, 2010 and, in any event, not later than June 20, 2010. The Offer Price will be not more than HK$23.00 and
    is currently expected to be not less than HK$19.80 per Offer Share unless otherwise announced. The Joint Bookrunners (on behalf of the Underwriters, and with our
    consent) may reduce the number of Offer Shares and/or the indicative Offer Price range stated in this prospectus at any time prior to the morning of the last day for lodging
    applications under the Hong Kong Public Offering in which case, notice of such reduction will be published in the South China Morning Post (in English) and the Hong
    Kong Economic Times (in Chinese), and will be posted on the website of the Hong Kong Stock Exchange (www.hkexnews.hk) and on the website of our Company
    (www.goldwind.cn). If applications for Hong Kong Public Offer Shares have been submitted prior to the day which is the last day for lodging applications under the Hong
    Kong Public Offering, then even if the number of Offer Shares and/or the indicative Offer Price range is so reduced, such applications cannot be subsequently withdrawn.
    Further details are set out in the sections entitled “Structure of the Global Offering” and “How to Apply for Hong Kong Public Offer Shares” in this prospectus.
    If, for whatever reason, the Offer Price is not agreed between us and the Joint Bookrunners (on behalf of the Underwriters) on or before June 20, 2010, the Global Offering
    (including the Hong Kong Public Offering) will not proceed and will lapse.
    The obligations of the Hong Kong Underwriters under the HongKong Underwriting Agreement to subscribe for, and to procure applicants for the subscription for, Hong Kong
    Public Offer Shares are subject to termination by the Joint Bookrunners, (for themselves, and on behalf of the Hong Kong Underwriters), if certain grounds arise at or prior to
    8:00 a.m. (Hong Kong time) on the day dealings in the H Shares first commence on The Stock Exchange of Hong Kong Limited (such first dealing date is currently expected to
    be June 22, 2010). Such grounds are set out in the section entitled “Underwriting” in this prospectus. It is important that you refer to that section for further details.
    We are incorporated, and substantially all of our businesses are located, in the PRC. Potential investors should be aware of the differences in the legal, economic, and
    financial systems between the PRC and Hong Kong, and the fact that there are different risks relating to investment in PRC incorporated businesses. Potential investors
    should also be aware that the regulatory framework in the PRC is different from the regulatory framework in Hong Kong, and should take into consideration the different
    market nature of the H Shares. Such differences and risk factors are set forth in the sections entitled “Risk Factors”, “Appendix VII—Summary of Principal Legal and
    Regulatory Provisions” and “Appendix VIII—Summary of the Articles of Association” in this prospectus.
    The Offer Shares have not been and will not be registered under the Securities Act and may not be offered, sold, pledged or transferred within the United States or to, or for
    the account or benefit of U.S. persons, except that Offer Shares may be offered, sold or delivered to QIBs in reliance on an exemption from registration under the Securities
    Act provided by, and in accordance with the restrictions of, Rule 144A or outside the United States in accordance with Rule 903 or Rule 904 of Regulation S.
    * For identification purpose only.
    June 7, 2010[THIS PAGE IS INTENTIONALLY LEFT BLANK]EXPECTED TIMETABLE(1)
    Application lists of the Hong Kong Public Offering open(2) . . . . . . . 11:45 a.m. on Thursday, June 10, 2010
    Latest time to complete electronic applications under White Form
    eIPO service through the designated website
    www.eipo.com.hk(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11:30 a.m. on Thursday, June 10, 2010
    Latest time to lodge WHITE and YELLOWApplication Forms . . . 12:00 noon on Thursday, June 10, 2010
    Latest time to give electronic application instructions to
    HKSCC(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12:00 noon on Thursday, June 10, 2010
    Latest time to complete payment of White Form eIPO applications
    by effecting internet banking transfer(s) or PPS payment
    transfer(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12:00 noon on Thursday, June 10, 2010
    Application lists of the Hong Kong Public Offering close . . . . . . . . . 12:00 noon on Thursday, June 10, 2010
    Expected Price Determination Date . . . . . . . . . . . . . . . . . . . . . . . . . Saturday, June 12, 2010
    Announcement of
    k the Offer Price;
    k the level of applications in the Hong Kong Public Offering;
    k the level of indications of interest in the International
    Offering; and
    k the basis of allotment of the Hong Kong Public Offer Shares
    expected to be published in the South China Morning Post (in
    English), the Hong Kong Economic Times (in Chinese), on the
    website of our Company at www.goldwind.cn and on the website
    of the Hong Kong Stock Exchange at www.hkex.com.hk on or
    before . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, June 21, 2010
    Announcement of results of allocations in the Hong Kong Public
    Offering (including successful applicants’ identification document
    numbers, where applicable) to be available through a variety of
    channels including the website of the Hong Kong Stock Exchange
    at www.hkex.com.hk and the website of our Company at
    www.goldwind.cn, as described in the paragraphs headed
    “Publication of Results” and “Dispatch/Collection of H Share
    Certificates and Refund Monies” in the section entitled “How to
    Apply for Hong Kong Public Offer Shares” . . . . . . . . . . . . . . . . . Monday, June 21, 2010
    Results of allocations in the Hong Kong Public Offering will be
    available at www.iporesults.com.hk with a “search by ID”
    function. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, June 21, 2010
    H Share certificates in respect of wholly or partially successful
    applications will be dispatched or deposited into CCASS on or
    before(5) to (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, June 21, 2010
    Refund cheques (if applicable) will be dispatched on or
    before(6) to (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, June 21, 2010
    White Form e-Refund payment instructions or refund cheques (if
    applicable) will be dispatched on or before(6) . . . . . . . . . . . . . . . . Monday, June 21, 2010
    Dealings in H Shares on the Hong Kong Stock Exchange expected
    to commence on . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tuesday, June 22, 2010
    – i –Notes:
    (1) All times refer to Hong Kong local time, except as otherwise stated. Details of the structure of the Global Offering, including its
    conditions, are set out in the section entitled “Structure of the Global Offering” in this prospectus.
    (2) If there is a “black” rainstorm warning or a tropical cyclone warning signal number eight or above in force in Hong Kong at any time
    between 9:00 a.m. and 12:00 noon on Thursday, June 10, 2010, the application lists will not open on that day. Further information is set
    out in the paragraph headed “Effect of bad weather on the opening of the application lists” in the section entitled “Howto Apply for Hong
    Kong Public Offer Shares” in this prospectus.
    (3) You will not be permitted to submit your application through the designated website at www.eipo.com.hk after 11:30 a.m. on the last
    day for submitting applications. If you have already submitted your application and obtained an application reference number from the
    designated website prior to 11:30 a.m., you will be permitted to continue the application process (by completing payment of application
    monies) until 12:00 noon on the last day for submitting applications, when the application lists close.
    (4) Applicants who apply for H Shares by giving electronic application instructions to HKSCC should refer to the paragraph headed
    “Applying by giving electronic application instructions to HKSCC via CCASS” in the section entitled “How to Apply for Hong Kong
    Public Offer Shares” in this prospectus.
    (5) H Share certificates will only become valid certificates of title if the Global Offering has become unconditional in all aspects and neither
    of the Underwriting Agreements has been terminated in accordance with its terms. Investors shall have to bear all the risks of dealing in H
    Shares on the basis of publicly available allocation details prior to the receipt of H Share certificates or prior to the H Share certificates
    becoming valid certificates of title.
    (6) e-Refund payment instructions/refund cheques will be issued in respect of wholly or partially unsuccessful applications and in respect of
    successful applications if the final Offer Price is less than the price payable on application. Part of your Hong Kong identity card number
    or passport number or, if you are joint applicants, part of the Hong Kong identity card or passport number of the first-named applicant,
    provided by you may be printed on your refund cheque, if any. This data may also be transferred to a third party for refund purposes. Your
    banker may require verification of your Hong Kong identity card number or passport number before encashment of your refund cheque.
    Inaccurate completion of your Hong Kong identity card number or passport number may lead to a delay in encashment of or may
    invalidate your refund cheque.
    (7) Applicants who apply on WHITE Application Forms for 1,000,000 H Shares or more under the Hong Kong Public Offering and have
    indicated in their Application Forms their wish to collect H Share certificates and refund cheques (as applicable) in person from our H
    Share Registrar may collect (where applicable) share certificates and (where applicable) refund cheques in person from our H Share
    Registrar, at Shops 1712 - 1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East,Wanchai, Hong Kong, from 9:00 a.m. to 1:00 p.m.
    on Monday, June 21, 2010. Applicants being individuals who opt for personal collection must not authorize any other person to make
    collection on their behalf. Applicants being corporations who opt for personal collection must attend by their authorized representatives
    each bearing a letter of authorization from his corporation stamped with the corporation’s chop. Both individuals and authorized
    representatives (if applicable) must produce, at the time of collection, evidence of identity acceptable to our H Share Registrar.
    (8) Applicants who apply on YELLOWApplication Forms for 1,000,000 H Shares or more under the Hong Kong Public Offering and have
    indicated in their Application Forms their wish to collect refund cheques (where relevant) in person may do so but may not elect to collect
    their H Share certificates, which will be deposited into CCASS for credit to their designated CCASS Participants’ stock accounts or
    CCASS Investor Participant stock accounts, as appropriate. The procedure for collection of refund cheques for applicants who apply on
    YELLOWApplication Forms for H Shares is the same as that for WHITE Application Form applicants.
    (9) Applicants who apply for 1,000,000 Hong Kong Public Offer Shares or more through the White Form eIPO service by submitting an
    electronic application to the designated White Form eIPO Service Provider through the designated website at www.eipo.com.hk and
    whose applications are wholly or partially successful, may collect H Share certificate(s) in person from our H Share Registrar, at Shops
    1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, from 9:00 a.m. to 1:00 p.m. on Monday,
    June 21, 2010, or such other date as notified by our Company in the newspapers as the date of dispatch/collection of H Share certificates/
    e-Refund payment instructions/refund cheques.
    For applicants who apply for less than 1,000,000 Hong Kong Public Offer Shares, H Share certificate(s) will be sent to the address
    specified in the applicant’s application instructions to the designated White Form eIPO Service Provider through the designated website
    at www.eipo.com.hk on Monday, June 21, 2010 by ordinary post and at the applicant’s own risk.
    Applicants who paid the application monies from a single bank account may have e-Refund payment instructions (if any) dispatched to
    the application payment bank account on Monday, June 21, 2010. Applicants who used multiple bank accounts to pay the application
    monies may have refund cheques (if any) dispatched to the applicants on Monday, June 21, 2010.
    – ii –
    EXPECTED TIMETABLE(10) Uncollected H Share certificates and refund cheques will be dispatched by ordinary post at the applicants’ own risk to the addresses
    specified in the relevant Application Forms. Further information is set out in the paragraph headed “Dispatch/Collection of H Share
    Certificates and Refund Monies” in the section entitled “How to Apply for Hong Kong Public Offer Shares” in this prospectus.
    You should read carefully the sections entitled “Underwriting”, “Structure of the Global Offering” and
    “How to Apply For Hong Kong Public Offer Shares” in this prospectus for details relating to the structure
    and conditions of the Global Offering, how to apply for Hong Kong Public Offer Shares and the expected
    timetable, including, among other things, conditions, effect of bad weather and the dispatch of refund
    cheques and share certificates.
    – iii –
    EXPECTED TIMETABLECONTENTS
    This prospectus is issued by Xinjiang Goldwind Science & Technology Co., Ltd. solely in connection with
    the Hong Kong Public Offering and the Hong Kong Public Offer Shares and does not constitute an offer to sell or
    a solicitation of an offer to buy any security other than the Hong Kong Public Offer Shares. This prospectus may
    not be used for the purpose of, and does not constitute, an offer to sell or a solicitation of an offer to buy in any
    other jurisdiction or in any other circumstances. No action has been taken to permit a public offering of the Offer
    Shares or the distribution of this prospectus in any jurisdiction other than Hong Kong. The distribution of this
    prospectus and the offering and sale of the Offer Shares in other jurisdictions are subject to restrictions and may
    not be made except as permitted under the applicable securities laws of such jurisdictions pursuant to
    registration with or authorization by the relevant securities regulatory authorities or an exemption
    therefrom. You should rely only on the information contained in this prospectus and the Application Forms
    to make your investment decision. We have not authorized anyone to provide you with information that is
    different from what is contained in this prospectus. Any information or representation not included in this
    prospectus must not be relied on by you as having been authorized by us, the Joint Global Coordinators, the Joint
    Sponsors, the Joint Bookrunners, any of the Underwriters, any of our or their respective directors or advisors, or
    any other person or party involved in the Global Offering. Information contained in our website, located at
    www.goldwind.cn, does not form part of this prospectus.
    Page
    Expected Timetable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i
    Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv
    Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
    Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
    Glossary of Technical Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
    Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
    Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
    Waivers from Strict Compliance with the Listing Rules. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
    Information About This Prospectus and the Global Offering. . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
    Directors, Supervisors and Parties Involved in the Global Offering. . . . . . . . . . . . . . . . . . . . . . . 51
    Corporate Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
    Industry Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
    Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
    Our History and Corporate Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
    Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
    Connected Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
    Directors, Supervisors and Senior Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
    Substantial Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141
    Share Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
    – iv –Page
    Cornerstone Investor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
    Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152
    Future Plans and Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190
    Underwriting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192
    Structure of the Global Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199
    How to Apply for Hong Kong Public Offer Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206
    Appendix I — Accountants’ Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
    Appendix II — Profit Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1
    Appendix III — Unaudited Pro Forma Financial Information . . . . . . . . . . . . . . . . . . . . . . . III-1
    Appendix IV — Unaudited Interim Financial Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1
    Appendix V — Property Valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1
    Appendix VI — Taxation and Foreign Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1
    Appendix VII — Summary of Principal Legal and Regulatory Provisions. . . . . . . . . . . . . . . VII-1
    Appendix VIII — Summary of the Articles of Association. . . . . . . . . . . . . . . . . . . . . . . . . . . . VIII-1
    Appendix IX — Statutory and General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IX-1
    Appendix X — Documents Delivered to the Registrar of Companies and Available for
    Inspection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . X-1
    – v –
    CONTENTS[THIS PAGE IS INTENTIONALLY LEFT BLANK]SUMMARY
    This summary aims to give you an overview of the information contained in this prospectus. As this is a
    summary, it does not contain all the information that may be important to you and is qualified in its entirety by,
    and should be read in conjunction with, the full text in this prospectus. You should read the whole document
    including the appendices hereto, which constitute an integral part of this prospectus, before you decide to invest
    in our Offer Shares.
    There are risks associated with any investment. Some of the particular risks in investing in our Offer Shares
    are summarized in the section entitled “Risk Factors” in this prospectus. You should read that section carefully
    before you decide to invest in our Offer Shares.
    OVERVIEW
    We are a leading manufacturer of wind turbine generators and provider of complete wind power solutions in
    China. Our primary business is WTG R&D, manufacturing and sales. We also engage in the provision of
    comprehensive wind power services and the development of wind farms for sale to wind farm operators and
    investors. As an enterprise with one of the longest track records in the PRC wind power equipment manufacturing
    industry, we possess substantial technical expertise, strong independent R&D capabilities and have successfully
    introduced innovative leading edge wind turbine technologies to the PRC market. Most of our core management
    team have specialized in wind power for many years, and possess significant industry experience in wind energy
    development and operation, giving us a deep understanding of our client base and their operational needs. Our
    comprehensive quality assurance system and after-sales service operations have also contributed to achieving our
    dominant market position. According to the International Wind Energy Development — World Market Update
    published by BTM, the accumulated installed capacity of WTGs manufactured by us reached 5.3 GW as of
    December 31, 2009, representing a market share in the PRC of approximately 21%. In 2009, our market share in the
    PRC in terms of newly installed capacity increased approximately 2 percentage points as compared to the previous
    year to approximately 20%, ranking us the fifth largest WTG manufacturer globally and the second largest in the
    PRC. The World Wind Energy Association, or WWEA, awarded us the World Wind Energy Award 2006 for our
    contribution to the development of the international wind power industry.
    k For our WTG R&D, manufacturing and sales business, we focus on the research, design, manufacturing
    and sales of premium quality WTGs with high efficiency and availability. Our main product is currently
    the 1.5 MW direct-drive permanent magnet WTG, and we also produce the 750 kW stall-regulated
    WTG. Throughout our corporate history, our customers have primarily been China’s large power
    producers and other enterprises investing in renewable energy, and our products and services have been
    sold across the PRC, with over 5,800 of our WTGs installed in 19 of China’s provinces as of March 31,
    2010. Apart from our business in the domestic market, we have also embarked on sales of our WTGs in
    international markets. For the three years ended December 31, 2007, 2008 and 2009, the revenue
    generated from our WTG R&D, manufacturing and sales business segment was RMB3,079.2 million,
    RMB6,299.3 million and RMB10,347.4 million, respectively, and accounted for 99.7%, 98.2% and
    97.0% of our total revenue.
    k For our wind power services business, we offer customers a complete range of services covering the
    whole process of developing a wind farm project, from preliminary investment consultancy and preconstruction
    project services such as feasibility studies and wind measurement, to project construction
    services such as EPC contracting, to post-construction operation and maintenance services such as
    equipment servicing and wind farm operation and maintenance. As of March 31, 2010, we had provided
    preliminary investment consultancy and pre-construction services for 275 projects, project construction
    – 1 –services for 123 wind farms, and post-construction operation and maintenance services for 72 wind
    farms with total installed capacity of 4,129.1 MW. For the three years ended December 31, 2007, 2008
    and 2009, the revenue generated from our wind power services business segment was RMB9.8 million,
    RMB29.5 million and RMB215.4 million, respectively, and accounted for 0.3%, 0.4% and 2.0% of our
    total revenue.
    k For our wind farm investment, development and sales business, we are able to provide wind farm
    operators and investors with completed wind farms that we have invested in and developed, and
    equipped with our WTGs. As of March 31, 2010, we developed 14 wind farms with total installed
    capacity of 628.5 MWand attributable installed capacity of 471.5 MW, of which four completed wind
    farms were sold.We generate income from sale of equity interests in the project companies we set up to
    develop the wind farms, and income from such sale is recorded under other income and gains. During the
    Track Record Period, income from sale of completed wind farms was nil, RMB263.1 million and
    RMB189.8 million, respectively. For our completed wind farms yet to be sold, we put them into
    operation and generate revenue from the tariffs received from the power generated. As of March 31,
    2010, we had three completed wind farms yet to be sold. For the three years ended December 31, 2007,
    2008 and 2009, our revenue for this business segment was nil, RMB88.5 million and RMB103.7 million,
    respectively, and accounted for 0.0%, 1.4% and 1.0% of our total revenue.
    We have strategically leveraged the depth of our R&D and manufacturing, services and wind farm
    development capabilities to achieve synergies among our three business segments and formed an advanced
    model as a provider of complete solutions covering multiple aspects of the wind power industry value chain. No
    other PRC WTG manufacturer is engaged in the provision of complete wind power solutions on a scale similar to
    ours.
    Our main product technology is the direct-drive permanent magnet full-power rectification technology, which
    holds four significant advantages over other wind turbine technologies, being high efficiency, high reliability,
    superior grid connectivity, and low spare parts and consumable materials requirements. We believe these
    advantages are greatly valued by our customers and the power grids for whom they generate electricity. We
    have successfully introduced our specialized wind turbine series, which adopt this technology and are efficiently
    adapted to the PRC’s diverse operating conditions, including low and high temperatures, high altitude, low wind
    velocity and coastal areas.
    We possess a comprehensive technology development system and have established three R&D centers in
    Beijing and Urumqi, PRC and Neunkirchen, Germany, where the headquarters of our subsidiary, Vensys AG, is
    based, with specialized research teams that focus on developing next generation technology and product
    improvements. We are also engaged in the in-house design and manufacture of core parts and components.
    This reduces our production cost and also enables us to obtain independent rights for key wind turbine technologies.
    We have completed the design and production of our 2.5 MW direct-drive permanent magnet WTG and 3.0 MW
    hybrid-drive WTG prototypes, and achieved successful grid connection. Our 5.0 MW WTG is currently under
    development. We independently developed ourMW-level WTGs through extensive R&D activities focused on our
    advanced direct-drive permanent magnet full-power rectification technology, whereas most Chinese WTG
    manufacturers generally acquire wind turbine technologies through licensing. The strength of our R&D
    capabilities is further evidenced by our ownership of six proprietary technologies, 25 patents, and 39 pending
    patents as of the Latest Practicable Date. In addition to achieving widespread customer acceptance, we have been
    called upon by the relevant PRC authorities to lead the drafting of eight national and local wind power industry
    technical standards, and are currently involved in the drafting of a further three such national standards.
    – 2 –
    SUMMARYWe undertook an initial public offering and listing of our A Shares on the SZSE in 2007. During the Track
    Record Period, we have experienced significant growth in revenues and maintained good profitability. For the three
    years ended December 31, 2007, 2008 and 2009, our revenue was RMB3,089.0 million, RMB6,417.3 million and
    RMB10,666.5 million, respectively, and our profit attributable to owners of our Company was RMB624.6 million,
    RMB906.4 million and RMB1,745.6 million, respectively, growing at a CAGR of 85.8% and 67.2%, between 2007
    and 2009, respectively. During the same period, our sales volume of WTGs was 754.5 MW, 1,372.5 MW and
    2,035.5 MW, respectively, growing at a CAGR of 64.3% between 2007 and 2009.
    OUR COMPETITIVE STRENGTHS
    We believe our historical success and future prospects are underpinned by a combination of competitive
    strengths, including:
    k We are a leader in the PRC WTG manufacturing industry with extensive sector experience, and have
    played an active role in the rapid growth of China’s wind power market.
    k We possess superior technology and strong independent R&D, design and product development
    capabilities.
    k We have an advanced business model as a provider of complete wind power solutions and continue to
    discover new value along the entire wind power industry value chain.
    k We are able to provide customers with comprehensive, timely and efficient after-sales services.
    k We have strong capabilities to design and manufacture core components in-house and optimize our
    supply chain, enabling us to reduce cost of production while assuring quality.
    k We have an experienced management team, and are continuously recruiting new talent.
    OUR STRATEGIES
    We seek to maintain and further enhance our position in the business of WTG R&D, manufacturing and sales,
    continue to be a leading provider of complete wind power solutions, expand our business globally and create
    maximum customer value. To this end, we plan to carry out or are in the process of carrying out the following
    strategies:
    k Maintain and enhance market leading position in China.
    k Continue to focus on technology and product innovation to develop more advanced WTGs.
    k Continuously reduce costs and further optimize our supply chain.
    k Actively grow our wind power services and wind farm investment, development and sales businesses.
    k Expand into attractive international markets.
    – 3 –
    SUMMARYSUMMARY FINANCIAL INFORMATION
    The following tables set forth summary consolidated financial information of our Group.We have derived the
    consolidated financial information for the three years ended December 31, 2007, 2008 and 2009 and the three
    months ended March 31, 2010 from the Accountants’ Report in Appendix I and the unaudited interim financial
    report in Appendix IV to this prospectus. The summary consolidated financial information should be read together
    with, and is qualified in its entirety by reference to, the consolidated financial statements set forth in the
    Accountants’ Report in Appendix I to this prospectus, including the related notes.
    Consolidated Statements of Comprehensive Income
    2007 2008 2009 2010
    Year ended December 31,
    Three
    months
    ended
    March 31,
    (unaudited)
    RMB in million
    Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,089.0 6,417.3 10,666.5 1,838.7
    Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,177.2) (4,895.9) (7,908.9) (1,326.5)
    Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 911.8 1,521.4 2,757.6 512.2
    Other income and gains, net . . . . . . . . . . . . . . . . . . . . . . . . 38.2 337.3 335.6 35.5
    Selling and distribution costs . . . . . . . . . . . . . . . . . . . . . . . (107.2) (286.7) (689.8) (123.5)
    Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . (161.9) (237.0) (276.3) (62.6)
    Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (36.3) (145.9) (77.4) (29.4)
    Finance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (22.9) (43.0) (62.8) (13.1)
    Share of profits and losses of:
    Jointly-controlled entities . . . . . . . . . . . . . . . . . . . . . . . . — — (0.3) —
    Associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 4.0 (1.0)
    PROFIT BEFORE TAX. . . . . . . . . . . . . . . . . . . . . . . . . . . 621.7 1,146.1 1,990.6 318.1
    Income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1 (120.9) (200.0) (60.5)
    PROFIT FOR THE YEAR/PERIOD . . . . . . . . . . . . . . . . . . 629.8 1,025.2 1,790.6 257.6
    Other comprehensive income:
    Exchange differences on translation of foreign operations . . . 1.8 (24.3) 7.9 (18.8)
    TOTAL COMPREHENSIVE INCOME FOR THE
    YEAR/PERIOD, NET OF TAX . . . . . . . . . . . . . . . . . . . 631.6 1,000.9 1,798.5 238.8
    Profit attributable to:
    Owners of the Company. . . . . . . . . . . . . . . . . . . . . . . . . 624.6 906.4 1,745.6 248.4
    Minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2 118.8 45.0 9.2
    629.8 1,025.2 1,790.6 257.6
    Total comprehensive income attributable to:
    Owners of the Company. . . . . . . . . . . . . . . . . . . . . . . . . 626.4 889.2 1,753.5 229.6
    Minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2 111.7 45.0 9.2
    631.6 1,000.9 1,798.5 238.8
    Earnings per share attributable to ordinary equity holders of
    the Company:
    Basic and diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RMB0.31 RMB0.40 RMB0.78 RMB0.11
    – 4 –
    SUMMARYConsolidated Statements of Financial Position
    2007 2008 2009 2010
    As at December 31, As at March 31,
    (unaudited)
    RMB in million
    Non-current assets
    Property, plant and equipment . . . . . . . . . . . . . 404.2 1,303.4 2,440.6 2,651.7
    Investment properties . . . . . . . . . . . . . . . . . . . 53.3 76.9 81.0 80.4
    Prepaid land lease payments . . . . . . . . . . . . . . . 62.8 79.1 160.6 170.7
    Goodwill. . . . . . . . . . . . . . . . . . . . . . . . . . . . — 240.2 249.9 234.0
    Other intangible assets . . . . . . . . . . . . . . . . . . 17.7 320.1 346.6 333.8
    Interests in jointly-controlled entities . . . . . . . . . — — 69.7 49.5
    Interests in associates . . . . . . . . . . . . . . . . . . . — — 47.4 46.3
    Available-for-sale investments . . . . . . . . . . . . . 4.2 26.2 9.0 9.0
    Deferred tax assets . . . . . . . . . . . . . . . . . . . . . 11.7 101.9 190.5 181.7
    Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . — 0.3 1.9 2.3
    Other long-term assets. . . . . . . . . . . . . . . . . . . — 2.1 — —
    Total non-current assets. . . . . . . . . . . . . . . . . 553.9 2,150.2 3,597.2 3,759.4
    Current assets
    Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . 971.6 2,119.2 2,853.5 4,006.0
    Trade and bills receivables . . . . . . . . . . . . . . . . 764.1 2,619.0 2,919.6 2,912.8
    Prepayments, deposits and other receivables . . . . 498.3 1,036.1 830.4 1,292.2
    Derivative financial instruments . . . . . . . . . . . . — — 4.7 —
    Pledged deposits. . . . . . . . . . . . . . . . . . . . . . . — — 218.5 323.2
    Cash and cash equivalents . . . . . . . . . . . . . . . . 2,679.7 3,286.4 4,459.0 2,388.1
    Total current assets . . . . . . . . . . . . . . . . . . . . 4,913.7 9,060.7 11,285.7 10,922.3
    Current liabilities
    Trade and bills payables . . . . . . . . . . . . . . . . . 934.5 2,544.5 3,760.2 3,545.5
    Other payables . . . . . . . . . . . . . . . . . . . . . . . . 862.2 2,671.4 2,055.8 1,436.1
    Derivative financial instruments . . . . . . . . . . . . — 2.3 10.7 18.1
    Interest-bearing bank and other borrowings. . . . . 470.0 50.0 601.9 924.2
    Tax payable . . . . . . . . . . . . . . . . . . . . . . . . . . — 184.4 212.3 110.1
    Dividend payable . . . . . . . . . . . . . . . . . . . . . . — — — 140.0
    Provision . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.9 51.1 241.3 280.8
    Total current liabilities . . . . . . . . . . . . . . . . . 2,274.6 5,503.7 6,882.2 6,454.8
    Net current assets . . . . . . . . . . . . . . . . . . . . . 2,639.1 3,557.0 4,403.5 4,467.5
    Total assets less current liabilities . . . . . . . . . . 3,193.0 5,707.2 8,000.7 8,226.9
    Non-current liabilities
    Interest-bearing bank and other borrowings. . . . . 153.0 1,281.7 2,022.1 2,145.3
    Deferred tax liabilities . . . . . . . . . . . . . . . . . . . — 85.6 90.9 82.1
    Provision . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.0 80.3 195.8 210.0
    Government grants . . . . . . . . . . . . . . . . . . . . . 75.1 98.4 140.6 141.1
    Other long-term liabilities . . . . . . . . . . . . . . . . — 23.5 24.0 22.3
    Total non-current liabilities . . . . . . . . . . . . . . . 244.1 1,569.5 2,473.4 2,600.8
    Net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,948.9 4,137.7 5,527.3 5,626.1
    Equity attributable to owners of the Company
    Issued share capital . . . . . . . . . . . . . . . . . . . . . 500.0 1,000.0 1,400.0 1,400.0
    Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,333.3 2,442.5 3,661.1 3,106.7
    Proposed dividend . . . . . . . . . . . . . . . . . . . . . 50.0 280.0 140.0(1) 784.0(2)
    2,883.3 3,722.5 5,201.1 5,290.7
    Minority interests . . . . . . . . . . . . . . . . . . . . . 65.6 415.2 326.2 335.4
    Total equity . . . . . . . . . . . . . . . . . . . . . . . . . 2,948.9 4,137.7 5,527.3 5,626.1
    Notes:
    (1) On March 25, 2010, our Company’s 2009 annual general meeting approved the distribution of our Company’s consolidated actual
    distributable profits of RMB1,767.8 million as of December 31, 2009. As partial settlement of this distribution, on April 6, 2010, our
    Company issued 840 million A Shares and paid cash of RMB140.0 million to holders of our A Shares funded with cash from profits
    generated by our business.
    (2) On May 26, 2010, our Board of Directors approved the distribution of RMB784.0 million in the form of a cash dividend paid out of our
    internal cash resources (and not out of our net proceeds from the Global Offering), subject to approval of our Shareholders in a general
    meeting to be held on June 12, 2010, the settlement date of which will be determined after the general meeting and is expected to be after
    the Listing. Our H Shareholders shall not be entitled to any portion of this cash dividend. Please see the section entitled “Financial
    Information —Dividend Policy” in this prospectus.
    – 5 –
    SUMMARYFINANCIAL DISCLOSURES AFTER GLOBAL OFFERING
    Following the listing of our A Shares on the SZSE, we have been subject to periodic reporting and other
    information disclosure requirements in the PRC and, as a result, may publicly release information in the PRC from
    time to time. However, such information and the prospectus for the A Share offering do not form part of this
    prospectus. Further, under the rules of the SZSE, we are required to publish quarterly results of operations in the
    PRC containing unaudited financial statements. Pursuant to Rule 13.09(2) of the Listing Rules, our Company will
    release price sensitive information simultaneously in Hong Kong and China after the listing of our HShares in Hong
    Kong, including our Company’s quarterly, interim and annual reports released on the SZSE.
    PROFIT FORECAST FOR THE YEAR ENDING DECEMBER 31, 2010
    Barring unforeseen circumstances, and based on the bases and assumptions set out in Appendix II to this
    prospectus, the Directors forecast that the consolidated profit attributable to owners of our Company for the year
    ending December 31, 2010 will be not less than RMB2,235 million.
    All statistics in the following table are based on the assumption that the Over-allotment Option is not
    exercised.
    Forecast net profit attributable to owners of our Company(1) . . . . . . . . . . . . not less than RMB2,235 million
    Unaudited pro forma fully diluted forecast earnings per Share(2) . . . . . . . . . no less than RMB0.85 (HK$0.97)
    Notes:
    (1) The bases and assumptions on which the profit forecast has been prepared are set out in Appendix II to this prospectus. The forecast net
    profit attributable to owners of our Company for the year ending December 31, 2010 is extracted from the section entitled “Financial
    Information —Profit forecast for the year ending December 31, 2010” in this prospectus.
    (2) The calculation of the unaudited pro forma fully diluted forecast earnings per Share is based on the forecast net profit attributable to
    owners of our Company for the year ending December 31, 2010, assuming that the Global Offering had been completed on January 1,
    2010 and a total of 2,635,294,000 Shares were in issue during the entire year ending December 31, 2010. The translation of Renminbi into
    Hong Kong dollars has been made at the rate of RMB0.8772 to HK$1.00, the PBOC Rate prevailing on the Latest Practicable Date.
    OFFER STATISTICS
    All statistics in this table are based on the assumption that the Over-allotment Option is not exercised.
    Based on offer
    price of HK$19.80
    Based on offer
    price of HK$23.00
    Market capitalization of H Shares(1) . . . . . . . . . . . . . . . . . . . . . . . . HK$8,610 million HK$10,001 million
    Forecast fully diluted price/earnings multiple on a pro forma
    basis(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.4 times 23.7 times
    Unaudited pro forma adjusted consolidated net tangible asset per
    Share(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HK$4.83 HK$5.29
    Notes:
    (1) The calculation of market capitalization is based on that 434,823,400 H Shares (including 395,294,000 H Shares and 39,529,400 H Shares
    converted from A Shares and transferred to the NSSF) are expected to be outstanding immediately following the Global Offering.
    (2) The calculation of the forecast fully diluted price/earnings multiple on a pro forma basis is based on the unaudited pro forma forecast
    earnings per Share for the year ending December 31, 2010 and the respective Offer Prices of HK$19.80 and HK$23.00 per H Share.
    (3) The unaudited pro forma adjusted consolidated net tangible asset per Share is calculated after making the adjustments referred to in
    Appendix III and on the basis that 2,635,294,000 Shares are expected to be in issue immediately following the Global Offering.
    – 6 –
    SUMMARYDIVIDEND POLICY
    After completion of the Global Offering, our Shareholders will be entitled to receive dividends declared by
    our Company. The proposal of payment and the amount of our dividends will be made at the discretion of the Board
    and will depend on our general business condition and strategies, cash flows, financial results and capital
    requirements, interests of the Shareholders, taxation conditions, statutory and regulatory restrictions and other
    factors that the Board deems relevant. Any dividend distribution shall also be subject to the approval of the
    Shareholders in the Shareholders’ meeting.
    Under the PRC Company Law and the Articles of Association, we will pay dividends out of our after-tax
    profit only after we have made the following allocations:
    k recovery of accumulated losses, if any;
    k allocations to the statutory reserve fund equivalent to 10% of our Company’s after-tax profit; and
    k allocations, if any, to a discretionary reserve fund approved by the Shareholders in a Shareholders’
    meeting.
    When the statutory reserve fund reaches and is maintained at or above 50% of our registered capital, no
    further allocations to this statutory fund will be required. Our profit distributable for the above-mentioned
    allocations and our dividend distribution shall be our after-tax profit as determined by PRC GAAP or IFRS,
    whichever is lower. All of our Shareholders have equal rights to dividends and distributions in the form of stock or
    cash. For holders of our H Shares, cash dividend payments, if any, will be declared by the Board in Renminbi and
    paid in Hong Kong dollars. According to the Articles of Association, the cumulative profit distribution in cash by
    our Company for any last-three-most-recent-years period shall be not less than 30% of the average of the same three
    years’ annual distributable profits.
    We distributed dividends in the form of shares and cash amounting to RMB500.0 million and
    RMB680.0 million during the two years ended December 31, 2007 and 2008, respectively. The Board of
    Directors on August 31, 2009 and the Shareholders in general meeting on September 25, 2009 approved a
    resolution that holders of our A Shares are entitled to our distributable profits accumulated prior to January 1, 2010,
    and holders of our H Shares and A Shares upon the completion of the Global Offering will be equally entitled to our
    distributable profits accumulated between January 1, 2010 and the Listing Date. On March 25, 2010, our
    Company’s 2009 annual general meeting approved the distribution of our Company’s consolidated actual
    distributable profits of RMB1,767.8 million(1). As partial settlement of this distribution, on April 6, 2010, our
    Company issued 840 million A Shares and paid cash of RMB140.0 million to holders of our A Shares funded with
    cash from profits generated by our business. On May 26, 2010, our Board of Directors approved the distribution of
    RMB784.0 million in the form of a cash dividend paid out of our internal cash resources (and not out of our net
    proceeds from the Global Offering), subject to approval of our Shareholders in a general meeting to be held on
    June 12, 2010, the settlement date of which will be determined after the general meeting and is expected to be after
    the Listing. Our H Shareholders shall not be entitled to any portion of this cash dividend. Our PRC legal advisor has
    confirmed that the declaration and payment of the foregoing dividend distribution is legal and valid under
    applicable PRC laws and regulations and our Articles of Association. Our historical dividends may not be indicative
    of the amount of our future dividends.
    – 7 –
    SUMMARY
    (1) Equal to the retained profits of our Group in the amount of RMB1,871.0 million as of December 31, 2009 according to PRC GAAP minus the
    statutory surplus reserve appropriated by our subsidiaries not distributable to our Shareholders, in the amount of RMB103.2 million.USE OF PROCEEDS
    Assuming an Offer Price of HK$21.40 per H share (which is the mid-point of the indicative Offer Price range
    set forth on the cover page of the prospectus), we estimate that we will receive net proceeds of approximately
    HK$8,078.6 million from the Global Offering after deducting the underwriting commissions and other estimated
    expenses, if the Over-allotment Option is not exercised. If the Over-allotment Option is exercised in full, we
    estimate that the additional net proceeds to us from the offering of these additional H Shares will be approximately
    HK$1,211.8 million, after deducting the underwriting commissions and other estimated expenses, assuming an
    Offer Price of HK$21.40 per H Share.
    In line with our strategies, we intend to use our proceeds from the Global Offering for the purposes and in the
    amounts set out below:
    k approximately 40.2% will be used for the construction of production bases and optimization of our
    business operations;
    k approximately 14.6% will be used for the design and development of more advanced WTGs and certain
    related components;
    k approximately 24.1% will be used for expansion into the international market, primarily the United
    States, Australia and Europe, and promotional activities as described in the section entitled “Business —
    Our Strategies —Expand into attractive international markets” in this prospectus;
    k approximately 11.1% will be used for the repayment of bank loans, including, among others (i) two
    three-year floating term loans in the total amount of EUR16.4 million at an annual interest rate of 120
    basis points (bps) above EURIBOR, and EUR20.0 million at an annual interest rate of 115 bps above
    EURIBOR for the initial 12 months, and subsequently at 115 bps above six-month EURIBOR, which
    will be due for repayment on March 15, 2011 and April 15, 2011, respectively; (ii) a one-year floating
    rate short-term bank facility of EUR19.0 million for our subsidiary Vensys AG’s working capital
    purposes at an annual interest rate of 120 bps above EURIBOR, which will be due on June 15, 2010;
    (iii) a 10-year term loan in the total amount of EUR3.5 million at an annual interest rate of 7% before
    June 30, 2013 and adjustable rate after July 1, 2013, which will be due for repayment on September 30,
    2018; and
    k approximately 10.0% will be used as our general working capital.
    The allocation of the proceeds used for the above will be adjusted in the event that the Offer Price is fixed at a
    higher or lower level compared to the mid-point of the estimated offer price range. Assuming the Over-allotment
    Option is not exercised, if the Offer Price is fixed at HK$23.00 per H Share, being the high end of the stated Offer
    Price range, the net proceeds will be increased by approximately HK$604.0 million. In such circumstances, we
    presently intend to use such additional proceeds to increase the net proceeds applied to the same purposes above
    (other than for the repayment of bank loans and as general working capital) on a pro rata basis. If the Offer Price is
    fixed at HK$19.80 per H Share, being the low end of the stated Offer Price range, the net proceeds will be decreased
    by approximately HK$604.0 million. In such circumstances we presently intend to reduce the net proceeds applied
    to our general working capital.
    In the event that the Over-allotment Option is exercised in full, the additional net proceeds of approximately
    HK$1,211.8 million (assuming the Offer Price is determined at the mid-point of the stated range), approximately
    HK$1,302.4 million (assuming the Offer Price is determined at the high end of the stated Offer Price range) or
    approximately HK$1,121.2 million (assuming the Offer Price is determined at the low end of the stated Offer
    – 8 –
    SUMMARYPrice range) will be applied by our Company for the same purposes above (other than for the repayment of bank
    loans and as general working capital) on a pro rata basis.
    To the extent that the net proceeds of the Global Offering are not immediately required for the above purposes,
    the Directors currently intend that such proceeds will be placed on short-term deposits with licensed banks or
    financial institutions in Hong Kong or the PRC.
    RISK FACTORS
    We believe that there are certain risks involved in our operations. Many of these risks are beyond our control
    and can be categorized into: (i) risks relating to our business; (ii) risks relating to the industry in which we operate;
    (iii) risks relating to the PRC; and (iv) risks relating to the Global Offering.
    Risks relating to our business
    k We may be affected if the government reduces or ceases its support and encouragement of the wind
    power industry.
    k We may not be able to continue our rapid growth and implement our business expansion plans
    successfully.
    k We face intense competition in our major markets.
    k We may not be able to obtain timely and stable supply of the core parts and components required for our
    business.
    k A significant portion of our revenue is derived from our major customers and changes in their
    requirements may have a material and adverse effect on our business.
    k We may not be able to develop new products that meet changing market demands or successfully
    introduce new products in a timely manner.
    k We may not be able to adequately protect our intellectual property rights.
    k If we fail to maintain an effective quality control system, our product quality and thus our business may
    be materially and adversely affected.
    k If we fail to effectively control costs, in particular the cost of parts and components, our results of
    operations and financial condition may be materially and adversely affected.
    k Our revenue may fluctuate through the year due to seasonality of business.
    k We are subject to risks associated with changes in preferential tax treatment.
    k Failure to fulfill customer orders due to delays in our production process may have a material and
    adverse effect on our business prospects, results of operations and financial condition.
    k Clauses in our contracts with customers may be modified.
    k Availability of credit and fluctuations in the interest rates of our bank borrowings and other loans may
    affect our business expansion or financial performance.
    k We may not be able to obtain wind farm projects with suitable wind resources or realize the expected
    profit from our development of wind farm projects.
    – 9 –
    SUMMARYk Our results of operations may be materially and adversely affected if we fail to retain or hire qualified
    personnel at reasonable costs.
    k Our success depends on the stability of our senior management team and successful implementation of
    our management incentive system.
    k Our international marketing and sales plans and strategies may not yield the desired results.
    k If we are unable to obtain power generation business licenses for wind farms that we own and operate,
    there may be a material and adverse effect on our business.
    k We have not obtained valid title certificates for some of the properties and land that we own and occupy.
    k We are subject to the risk of product liability claims and in some cases may not have sufficient insurance
    coverage.
    k Substantial damage to persons or loss of property may occur in the course of our production and
    construction processes.
    k Our production and operations may be affected by factors beyond our control.
    Risks relating to the industry in which we operate
    k If major breakthroughs in other renewable energy technologies result in these technologies being
    superior to wind power, or the utilization of wind power is affected by the unpredictability of local
    weather conditions, demand for wind power projects may be affected.
    k The lack of grid infrastructure may restrict or otherwise affect the development of wind farms and the
    timing of their development and therefore affect our ability to maintain or increase our historical level of
    operations, and the timing of revenue recognition from those operations.
    k Demand for wind power is dependent upon the overall demand for electric power, and if the overall
    demand for electric power declines because of an economic downturn in the major markets, our business
    will be affected.
    Risks relating to the PRC
    k Changes in the economic, political and social conditions in the PRC may have a material and adverse
    effect on our results of operations and financial condition.
    k The slowdown of the Chinese economy may have a material and adverse effect on our results of
    operations and financial condition.
    k The PRC’s legal system is still evolving, there exist uncertainties as to the interpretation and
    enforcement of PRC laws, and PRC laws are different from those of common law countries.
    k The recurrence of Severe Acute Respiratory Syndrome or an outbreak of other epidemics, such as bird
    flu or Type A H1N1 influenza, may materially and adversely affect our results of operations and
    financial condition.
    k Government control over the conversion of foreign exchange may affect our results of operations and
    financial condition.
    – 10 –
    SUMMARYk We face foreign exchange and conversion risks, and fluctuation in the value of the RMB may have a
    material and adverse effect on our business and your investment.
    k It may be difficult to enforce judgments rendered by courts other than PRC courts against us or the
    Directors, Supervisors or senior management residing in China.
    Risks relating to the Global Offering
    k Characteristics of the A Share and H Share markets may differ.
    k The conversion of A Shares to H Shares could have a material and adverse effect on the prevailing
    market price of the H Shares and our ability to raise capital in the future.
    k As the Offer Price of the H Shares is higher than the net tangible asset value per share, you will
    experience immediate dilution.
    k The sales or potential sales of substantial amounts of the H Shares in the public market (including any
    future offering) may affect the prevailing market price of the H Shares and our ability to raise capital in
    the future, and future additional issuance of securities may dilute your shareholdings.
    k There exist uncertainties about the Vensys Option and potential issuance of additional Shares pursuant to
    the exercise of the Vensys Option will cause dilution in your shareholdings.
    k There will be a five-Business-Day time gap between pricing and trading of the H Shares offered pursuant
    to the Global Offering.
    k There is no assurance that we will adopt the same dividend policy as we have adopted in the past.
    k There has been no prior public market for the H Shares, and the liquidity, market price and trading
    volume of the H Shares may be volatile.
    k Certain industry statistics contained in this prospectus are derived from various publicly available
    official sources and may not be reliable.
    k Holders of the H Shares may be subject to PRC taxation.
    k You should read the entire prospectus carefully and we strongly caution you not to place any reliance on
    any information contained in press articles or other media regarding us and the Global Offering.
    – 11 –
    SUMMARYDEFINITIONS
    In this prospectus, unless the context otherwise requires, the following expressions shall have the following
    meanings. Certain other terms are explained in the section entitled “Glossary of Technical Terms”.
    “863 program” The State High-Technology Development Plan, a program funded and
    administered by the PRC Government intended to stimulate the
    development of advanced technologies in a wide range of fields
    “948 program” The Introduction of International Advanced Agricultural Science and
    Technology Program, approved by the State Council and involving
    programs relating to the development of the PRC ecology, forestry and
    agriculture industries
    “A Shares” Domestic shares of our Company, with a nominal value of RMB1.00
    each, which are listed on the SZSE and traded in RMB
    “Accountants’ Report” The report by Ernst & Young, certified public accountants, our
    reporting accountants, in the form set out in Appendix I to this
    prospectus
    “Application Form(s)” WHITE Application Form(s), YELLOW Application Form(s) and
    GREEN Application Form(s), or where the context so requires, any
    of them, relating to the Hong Kong Public Offering
    “Articles of Association” TheArticles of Association, adopted by our Company on May 26, 2010,
    which shall become effective on the Listing Date and as amended from
    time to time, a summary of which is set forth in Appendix VIII to this
    prospectus
    “ASP” Average selling price(s)
    “associates” Has the meaning ascribed thereto under the Listing Rules
    “Bayannur Fuhui” Inner Mongolia Bayannur Fuhui Wind Energy Electricity Co., Ltd.
    ( ), a company incorporated
    under the laws of the PRC on April 26, 2004 and a non-wholly owned
    subsidiary of our Company
    “Beijing Goldwind” Beijing Goldwind Science & Creation Wind Power Equipment Co.,
    Ltd. ( ), a company incorporated
    under the laws of the PRC on February 13, 2006 and a wholly
    owned subsidiary of our Company
    “Beijing Techwin” Beijing Techwin Electric Co., Ltd. ( ), a
    company incorporated under the laws of the PRC on December 16,
    2008 and a non-wholly owned subsidiary of our Company
    “Beijing Tianrun” Beijing Tianrun New Energy Investment Co., Ltd.
    ( ), a company incorporated under the
    laws of the PRC on April 11, 2007 and a wholly owned subsidiary of
    our Company
    – 12 –“Beijing Tianyuan” Beijing Tianyuan Science & Creation Wind Power Technology Co.,
    Ltd. ( ), a company
    incorporated under the laws of the PRC on September 29, 2005
    and a non-wholly owned subsidiary of our Company
    “BTM” BTM Consult ApS, an organization that specializes in information and
    statistics regarding renewable energy and independent of our
    Company, Directors, Substantial Shareholder(s) and their respective
    associates
    “Business Day” A day (other than a Saturday or a Sunday or a public holiday) on which
    banks in Hong Kong are open for banking business to the public
    “CAGR” Compounded annual growth rate
    “CB Fund” China-Belgium Direct Equity Investment Fund (
    ), a company incorporated under the laws of the PRC
    on November 18, 2004 and a Shareholder of our Company
    “CCASS” The Central Clearing and Settlement System established and operated
    by HKSCC
    “CCASS Clearing Participant” A person admitted to participate in CCASS as a direct clearing
    participant or a general clearing participant
    “CCASS Custodian Participant” A person admitted to participate in CCASS as a custodian participant
    “CCASS Investor Participant” A person admitted to participate in CCASS as an investor participant,
    who may be an individual or joint individuals or a corporation
    “CCASS Participant” A CCASS Clearing Participant, a CCASS Custodian Participant or a
    CCASS Investor Participant
    “CDM” Clean development mechanism, which allows a country with an
    emission-reduction or emission-limitation commitment under the
    Kyoto Protocol to implement an emission-reduction project in
    developing countries
    “CEIC” CEIC Data Company Ltd., an organization that specializes in
    economic databases of emerging and developed markets
    worldwide, and independent of our Company, Directors,
    Substantial Shareholder(s) and their respective associates
    “CERs” Certified emission reductions, which are carbon credits issued by the
    CDM Executive Board for emission reductions achieved by CDM
    projects and verified by a designated operating entity accredited for
    monitoring CDM projects under the Kyoto Protocol
    “China” or “PRC” The People’s Republic of China, excluding, only for purposes of this
    prospectus, Taiwan, the Macau Special Administrative Region of the
    PRC and Hong Kong
    – 13 –
    DEFINITIONS“China Three Gorges” China Three Gorges Corporation ( )
    (formerly known as China Three Gorges Project Corporation
    ( )), a company incorporated under
    the laws of the PRC and the parent company of China Water
    “China Water” China Water Resources Investment Group Company (
    ) (formerly known as China Water Resources Investment
    Company ( )), a company incorporated under the
    laws of the PRC on December 22, 1997, the name of which was
    changed to China Water Resources Investment Group Company on
    October 31, 2006, and a Shareholder of our Company
    “China Water Baotou” China Water Resources Investment Group Baotou Wind Power
    Equipment Co., Ltd ( ),
    a company incorporated under the laws of the PRC and a
    subsidiary of China Water
    “China Water Xi’an” China Water Resources Investment Group Xi’an Wind Power
    Equipment Co., Ltd. ( ),
    a company incorporated under the laws of the PRC and a subsidiary of
    China Water
    “Chinese Academy of Meteorological
    Sciences”
    A multi-disciplinary meteorological research institution in the PRC
    directly attached to the China Meteorological Administration, the
    public service agency under the State Council responsible for
    organizational and operational management of China’s national
    meteorological services
    “Company” Xinjiang Goldwind Science & Technology Co., Ltd. (
    ), a joint stock limited liability company
    incorporated in the PRC on March 26, 2001, and including its
    subsidiaries as the context requires
    “Companies Ordinance” The Companies Ordinance (Chapter 32 of the Laws of Hong Kong), as
    amended and supplemented or otherwise modified from time to time
    “Connected Person(s)” Has the meaning ascribed thereto under the Listing Rules
    “Controlling Shareholder(s)” Has the meaning ascribed thereto under the Listing Rules
    “Cornerstone Investor” The cornerstone investor as described in the section entitled
    “Cornerstone Investor” in this prospectus
    “CSRC” China Securities Regulatory Commission (
    ), a regulatory body responsible for the supervision and
    regulation of the PRC securities markets
    “Director(s)” or “Board of Directors” Director(s) or the board of directors of our Company, respectively
    “EIA” The Energy Information Administration under the Department of
    Energy of the United States
    – 14 –
    DEFINITIONS“EPC” Engineering, Procurement and Construction, a construction
    arrangement where the company that is contracted to construct the
    project will be responsible for the design, procurement, and
    construction, and will deliver the project to the owner after
    completion of the project construction and passing of the final
    acceptance inspection
    “EUR” or “euro” The lawful currency of the member states of the European Union that
    have adopted the single currency in accordance with the treaty
    establishing the European Community, as amended
    “EURIBOR” The EUR interbank offered rate, which is the rate at which a prime
    bank is willing to lend funds in EUR to another prime bank
    “GDP” Gross domestic product (all references to GDP growth rates are real as
    opposed to nominal rates of GDP growth)
    “Global Financial Advisors” China International Capital Corporation Hong Kong Securities
    Limited and CCB International Capital Limited
    “Global Offering” The Hong Kong Public Offering and the International Offering
    “Goldwind Windenergy” Goldwind Windenergy GmbH, a company incorporated under the
    laws of Germany on May 18, 2006 and a wholly owned subsidiary of
    our Company
    “Green Application Form(s)” The Application Form(s) to be completed by the White Form eIPO
    Service Provider, Computershare Hong Kong Investor Services
    Limited
    “Group”, “us” or “we” Our Company and our subsidiaries
    “H Shares” Foreign shares in the share capital of our Company, with a Renminbi
    denominated par value of RMB1.00 each, which are to be subscribed
    for and traded in HK dollars and for which an application will be made
    for listing and permission to trade on the Hong Kong Stock Exchange
    “H Share Registrar” Computershare Hong Kong Investor Services Limited
    “HK$” or “HK dollars” or “Hong Kong
    dollars” and “cents”
    HongKong dollars and cents respectively, the lawful currency of Hong
    Kong
    “HKSCC” Hong Kong Securities Clearing Company Limited
    “HKSCC Nominees” HKSCC Nominees Limited, a wholly owned subsidiary of HKSCC
    “Hong Kong” or “HK” The Hong Kong Special Administrative Region of the PRC
    “Hong Kong Public Offering” The offer for subscription of the Hong Kong Public Offer Shares to the
    public in Hong Kong at the Offer Price (plus brokerage of 1%, SFC
    transaction levy of 0.004% and the Hong Kong Stock Exchange
    trading fee of 0.005%), subject to and in accordance with the terms
    – 15 –
    DEFINITIONSand conditions set out in this prospectus and the related Application
    Forms
    “Hong Kong Public Offer Shares” The 39,529,600 H Shares being offered for subscription pursuant to
    the Hong Kong Public Offering (subject to adjustment as described in
    the section entitled “Structure of the Global Offering” in this
    prospectus)
    “Hong Kong Stock Exchange” The Stock Exchange of Hong Kong Limited
    “Hong Kong Underwriters” The underwriters of the Hong Kong Public Offering whose names are
    set out in the section entitled “Underwriting —Hong Kong
    Underwriters” in this prospectus
    “Hong Kong Underwriting Agreement” The underwriting agreement dated June 4, 2010 entered into by,
    among others, our Company, the Joint Bookrunners and the Hong
    Kong Underwriters relating to the Hong Kong Public Offering, the
    details of which are set out in the section entitled “Underwriting —
    Hong Kong Underwriters” in this prospectus
    “IEA” The International Energy Agency, an intergovernmental organization
    which acts as energy policy advisor to 28 countries, including the
    United States, Japan and member states of the European Union
    “IEC” International Electrical Commission, the organization that prepares
    and publishes international standards for electrical, electronic and
    related technologies
    “IFRS” International Financial Reporting Standards, which include standards,
    amendments and interpretations issued by the International
    Accounting Standards Board (IASB)
    “Independent Third Party(ies)” Person(s) who, as far as the Directors are aware after having made all
    reasonable enquiries, is/are not connected person(s) of our Company
    within the meaning of the Listing Rules
    “International Offering” The offer for sale of the International Offer Shares by the International
    Underwriters to professional and institutional investors at the Offer
    Price, the details of which are set out in the section entitled “Structure
    of the Global Offering” in this prospectus
    “International Offer Shares” The 355,764,400 H Shares being offered for subscription pursuant to
    the International Offering together, where relevant, with any
    additional H Shares issued pursuant to the exercise of the Overallotment
    Option, the number of which is further subject to
    adjustment as described in the section entitled “Structure of the
    Global Offering” in this prospectus
    “International Underwriters” The underwriters of the International Offering, who are expected to
    enter into the International Underwriting Agreement
    – 16 –
    DEFINITIONS“International Underwriting Agreement” The underwriting agreement relating to the International Offering
    which is expected to be entered into by, among others, our Company,
    the Joint Bookrunners and the International Underwriters on or before
    the Price Determination Date
    “ISO” International Organization for Standardization
    “Joint Bookrunners” China International Capital Corporation Hong Kong Securities
    Limited, Citigroup Global Markets Asia Limited and Credit Suisse
    (Hong Kong) Limited
    “Joint Global Coordinators” China International Capital Corporation Hong Kong Securities
    Limited and Citigroup Global Markets Asia Limited
    “Joint Lead Managers” China International Capital Corporation Hong Kong Securities
    Limited, Citigroup Global Markets Asia Limited, Taifook
    Securities Company Limited and Credit Suisse (Hong Kong) Limited
    “Joint Sponsors” China International Capital Corporation Hong Kong Securities
    Limited, Citigroup Global Markets Asia Limited and Hai Tong
    Capital (HK) Limited
    “Keshiketengqi Huifeng” Keshiketengqi Huifeng New Energy Co., Ltd. (
    ), a company incorporated under the laws of the
    PRC on July 25, 2005 and a former indirectly-owned subsidiary of our
    Company
    “Kyoto Protocol” The Kyoto Protocol to the “United Nations Framework Convention on
    Climate Change” passed in 1997
    “Latest Practicable Date” May 27, 2010, being the latest practicable date for ascertaining certain
    information in this prospectus prior to its publication
    “Listing” Listing of the H Shares on the Main Board
    “Listing Date” The date on which dealings in the H Shares commence on the Hong
    Kong Stock Exchange
    “Listing Rules” The Rules Governing the Listing of Securities on the Hong Kong
    Stock Exchange, as amended from time to time
    “Main Board” The stock exchange (excluding the option market) operated by the
    Hong Kong Stock Exchange which is independent from and operated
    in parallel with the Growth Enterprise Market of the Hong Kong Stock
    Exchange
    “Mandatory Provisions” The Mandatory Provisions for the Articles of Association of
    Companies to be Listed Overseas ( )
    promulgated on August 27, 1994 by the Securities Commission and
    the State Economic Restructuring Commission
    ( ), as amended, supplemented or
    otherwise modified from time to time
    – 17 –
    DEFINITIONS“Ministry of Commerce” or “MOFCOM” The Ministry of Commerce of the PRC ( )
    “MOST” The Ministry of Science and Technology of the PRC (
    )
    “NDRC” National Development and Reform Commission of the PRC
    ( )
    “NPC” The National People’s Congress of the PRC (
    ), the national legislative body of the PRC
    “NSSF” The National Social Security Fund Council of the PRC (
    ), an organization authorized by the State
    Council which is responsible for the administration of the State’s
    national social security funds
    “Offer Price” The final offer price per Offer Share (exclusive of a brokerage of 1%,
    SFC transaction levy of 0.004% and Hong Kong Stock Exchange
    trading fee of 0.005%) of not more than HK$23.00 and expected to be
    not less than HK$19.80, such price to be determined in the manner
    described in the section entitled “Structure of the Global Offering —
    Pricing and Allocation” in this prospectus
    “Offer Shares” The HongKong Public Offer Shares and the International Offer Shares
    with any additional H Shares to be issued and sold pursuant to the
    exercise of the Over-allotment Option
    “Over-allotment Option” The option to be granted by our Company to the International
    Underwriters pursuant to the International Underwriting
    Agreement, exercisable by the Joint Bookrunners on behalf of the
    International Underwriters, to require our Company to allot and issue
    up to an aggregate of 59,294,000 additional new H Shares at the Offer
    Price (representing 15% of the H Shares initially being offered under
    the Global Offering), details of which are described in the section
    entitled “Underwriting” in this prospectus
    “PBOC” People’s Bank of China ( ), the central bank of the PRC
    “PBOC Rate” The exchange rate for foreign exchange transactions set daily by the
    PBOC based on the previous day’s interbank foreign exchange rate in
    China and with reference to prevailing exchange rates on the world
    financial markets
    “power generation business license” Electric power business license for power generation, which should be
    obtained by companies engaged in the power generation business in
    the PRC pursuant to the Electric Power Law of the PRC (
    ) and the Provisions for the Administration of
    Electric Power Business Licenses (Order no. 9 issued by the SERC)
    ( )
    – 18 –
    DEFINITIONS“PRC Company Law” The Company Law of the PRC ( ), as adopted
    at the Fifth Session of the Standing Committee of the Eighth NPC on
    December 29, 1993, which became effective on July 1, 1994, as
    amended, supplemented or otherwise modified from time to time. The
    latest revision was approved on October 27, 2005 and came into effect
    on January 1, 2006
    “PRC Financial Advisor” Haitong Securities Co., Ltd.
    “PRC GAAP” Accounting Standards for Business Enterprises and its interpretations
    issued by the Ministry of Finance of the PRC
    “PRC Government” or “Chinese
    Government”
    The central government of the PRC and all governmental subdivisions
    (including provincial, municipal and other regional or local
    government entities) and organizations of such government or, as
    the context requires, all of them
    “Price Determination Agreement” The agreement to be entered into among our Company and the Joint
    Bookrunners (on behalf of the Underwriters) on the Price
    Determination Date to record and fix the Offer Price
    “Price Determination Date” The date on which the Offer Price will be determined for the purposes
    of the Global Offering, expected to be on or around June 12, 2010
    (Hong Kong time), or such later time as the Joint Bookrunners (on
    behalf of the Underwriters) and us may agree, but in any event no later
    than June 20, 2010
    “province” or “provinces” The provinces, autonomous regions and municipalities of the PRC
    “QIBs” Qualified institutional buyers as defined in Rule 144A
    “R&D” Research and development
    “Regulation S” Regulation S under the Securities Act
    “RMB” and “Renminbi” The lawful currency of the PRC
    “Rule 144A” Rule 144A under the Securities Act
    “Saarwind” Saarwind Beteiligungs-Kommanditgesellschaft, a company incorporated
    under the laws of Germany
    “SAFE” The State Administration of Foreign Exchange of the PRC
    ( ), the PRC governmental agency
    responsible for matters relating to foreign exchange administration
    “SAIC” or “State Administration for
    Industry and Commerce”
    The State Administration for Industry and Commerce of the PRC
    ( )
    “SASAC” State-owned Assets Supervision and Administration Commission of
    the State Council, responsible for the administration of state-owned
    assets ( )
    “Securities Act” The U.S. Securities Act of 1933, as amended from time to time
    – 19 –
    DEFINITIONS“Securities Commission” The Securities Commission of the State Council
    ( ), which was abolished in
    March 1998 when its functions were thereafter assumed by CSRC
    “Securities Law” The Securities Law of the PRC ( ), enacted by
    the Standing Committee of the NPC on December 29, 1998 and which
    became effective on July 1, 1999, as amended and supplemented or
    otherwise modified from time to time. The latest revision was
    approved on October 27, 2005 and came into effect on January 1, 2006
    “SERC” The State Electricity Regulatory Commission of the PRC
    ( )
    “SFC” The Securities and Futures Commission of Hong Kong
    “SFO” The Securities and Futures Ordinance, (Chapter 571 of the Laws of
    Hong Kong), as amended and, supplemented or otherwise modified
    from time to time
    “Shanghai Chengrui” Shanghai Chengrui Investment Co., Ltd. ( ), a
    company incorporated under the laws of the PRC on December 4,
    2001
    “Shanghai Wind Info” Shanghai Wind Information Co., Ltd.
    ( ), a financial data and financial
    software provider in China, and independent of our Company,
    Directors, Substantial Shareholder(s) and their respective associates
    “Share(s)” Ordinary share(s) of par value RMB1.00 each in the share capital of
    our Company, including both A Shares and H Shares
    “Shareholders” Holder(s) of the Shares
    “Solar Energy Co.” Xinjiang Solar Energy Technology Development Company
    ( ), a company incorporated under the laws
    of the PRC on January 1, 1994 and a Shareholder of our Company
    “Special Regulations” The Special Regulations of the State Council on the Overseas Offering
    and Listing of Shares by Joint Stock Limited Companies
    ( )
    promulgated by the Securities Commission and the State Council on
    August 4, 1994, as amended and supplemented or otherwise modified
    from time to time
    “State Council” The State Council of the PRC ( )
    “subsidiaries” Has the meaning ascribed thereto under section 2 of the Companies
    Ordinance
    “Substantial Shareholder(s)” Has the meaning ascribed thereto under the Listing Rules
    “Supervisor(s)” or “Supervisory
    Committee”
    Supervisor(s) or the supervisory committee of our Company
    – 20 –
    DEFINITIONS“SZSE” The Shenzhen Stock Exchange ( )
    “SZSE Listing Rules” The Rules Governing Listing of Stocks on the SZSE as amended from
    time to time
    “Tacheng Tianrun” Tacheng Tianrun Wind Power Co., Ltd. (
    ), a company incorporated under the laws of the PRC on July 20,
    2007 and former subsidiary of our Company
    “TianRun USA” TianRun USA, Inc., a company incorporated under the laws of the
    United States on June 10, 2009 and a wholly owned subsidiary of our
    Company
    “TQM” Total Quality Management, a management method used by an
    organization that is quality oriented, where all employees
    participate in the initiative, the purpose of which is to achieve
    long-term success by achieving customer satisfaction and by
    benefiting the organization itself, its members, and society
    “Track Record Period” The three years ended December 31, 2007, 2008 and 2009
    “Underwriters” The Hong Kong Underwriters and the International Underwriters
    “Underwriting Agreements” The Hong Kong Underwriting Agreement and the International
    Underwriting Agreement
    “U.S.” or “United States” The United States of America, its territories, its possessions and all
    areas subject to its jurisdiction
    “US$” or “U.S. dollars” United States dollars, the lawful currency of the United States
    “Vensys/Innowind” Vensys/Innowind Beteiligungs—GmbH&Co. Kommanditgesellschaft,
    a limited company incorporated under the laws of Germany
    “Vensys AG” Vensys Energy AG, a company incorporated under the laws of
    Germany on February 14, 2000 and a non-wholly owned subsidiary
    of our Company
    “Vensys Elektrotechnik” Vensys Elektrotechnik GmbH, a company incorporated under the laws
    of Germany on November 13, 1998 and a non-wholly owned
    subsidiary of our Company
    “Vensys Option” The option granted to Vensys/Innowind, Saarwind and Windpark as
    shareholders of the remaining 30.0% equity interest of Vensys AG in
    accordance with the Vensys Shares SPA and the Vensys Supplemental
    Agreements to exchange their remaining shares of Vensys AG into our
    Shares
    “Vensys Shares SPA” The share purchase agreement regarding our acquisition of a 70.0%
    equity interest in Vensys AG dated January 24, 2008 entered into
    among our Company, Vensys/Innowind, Saarwind, Goldwind
    Windenergy and Vensys AG
    – 21 –
    DEFINITIONS“Vensys Supplemental Agreements” The two supplemental share purchase agreements for the Vensys
    Shares SPA dated May 14, 2010 entered into among our Company,
    Vensys/Innowind, Saarwind, Windpark, Goldwind Windenergy and
    Vensys AG
    “White Form eIPO” The application for Hong Kong Public Offer Shares to be issued in the
    applicant’s own name by submitting applications online through the
    designated website of White Form eIPO www.eipo.com.hk
    “White Form eIPO Service Provider” Computershare Hong Kong Investor Services Limited
    “Windpark” VensysWindpark Beteiligungs-und Verwaltungsgesellschaft GmbH, a
    company incorporated under the laws of Germany
    “Wind Power Research Centre” Xinjiang Wind Power Research Centre (
    ), a business unit established under the laws of the PRC on
    July 1, 1986 and a Shareholder of our Company
    “WTG” Wind turbine generator
    “Xinjiang” The Xinjiang Uyghur Autonomous Region of the PRC
    “Xinjiang SASAC” State-owned Assets Supervision and Administration Commission of
    Xinjiang ( )
    “Xinjiang Wind Power” Xinjiang Wind Power Co., Ltd. ( ), (formerly
    known as Xinjiang Wind Power Company ( )), a stateowned
    enterprise incorporated under the laws of the PRC on April 11,
    1988, which was converted to Xinjiang Wind Power Co., Ltd. on
    October 13, 2005, and a Shareholder of our Company
    “XJ New Wind” Xinjiang New Wind Kegongmao Co., Ltd. (
    ), a company incorporated under the laws of the PRC on
    February 17, 1998 and the predecessor of our Company
    “XJ Tianyun” Xinjiang Tianyun Wind Power Equipment Distribution Co., Ltd.
    ( ), a company incorporated under
    the laws of the PRC on June 11, 2007 and a wholly owned subsidiary
    of our Company
    “Yuanfeng Investment” Shenzhen Yuanfeng Investment Co., Ltd. (
    ), a company incorporated under the laws of the PRC on
    November 24, 2006 and a Shareholder of our Company
    “Yuanjing Xinfeng” Shenzhen Yuanjing Xinfeng Investment Consultation Co., Ltd.
    ( ), a company incorporated
    under the laws of the PRC on November 13, 2006 and a
    Shareholder of our Company
    – 22 –
    DEFINITIONS“Yuanjing Xinneng” Shenzhen Yuanjing Xinneng Investment Consultation Co., Ltd.
    ( ), a company incorporated
    under the laws of the PRC on November 17, 2006 and a
    Shareholder of our Company
    Certain amounts and percentage figures included in this prospectus have been subject to rounding
    adjustments. Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of the
    figures preceding them.
    In this prospectus, if there is any inconsistency between the Chinese names of the entities, authorities,
    organizations, institutions or enterprises established in China or the awards, certificates given in China and their
    English translations, the Chinese language version shall prevail.
    – 23 –
    DEFINITIONSGLOSSARY OF TECHNICAL TERMS
    This glossary contains certain definitions of technical terms used in this prospectus as they relate to us and
    as they are used in this prospectus in connection with our business or us. Some of these definitions may not
    correspond to standard industry definitions.
    “AC” Alternating current, being electricity that changes direction
    periodically
    “active power control” The method of reducing the power output generated by wind turbines
    at any point in time. For pitch regulated WTGs, it is achieved by
    adjusting the angle of the blades facing the wind thereby changing the
    wind energy absorbed by wind turbines
    “attributable installed capacity” The aggregate installed capacity is calculated by multiplying an
    entity’s percentage ownership in the power project company by the
    total installed capacity of such power project company
    “availability” A percentage calculated by dividing the amount of time a WTG is not
    experiencing technical defaults over a certain period by the amount of
    time in such period
    “blade” The WTG component that drives the turbine rotor using wind energy
    “concession project” Awind power concession project for which the NDRC solicits bids. It
    involves: (1) the PRC Government designating the construction site
    and the project capacity; (2) a grid corporation acquiring all the power
    generated; (3) a fixed tariff price during the concession term;
    (4) determining the tariff price by public bidding; (5) selection of
    the wind power investor and WTG manufacturer through bidding; and
    (6) a grid corporation being responsible for connecting the wind farm
    to the grid
    “constant frequency” The technology that converts the changing power frequency from the
    generator of a WTG into a constant grid frequency
    “constant speed” Operation of a WTG whereby the rotational speed of the turbine rotor
    remains constant
    “DC” Direct current, being electricity which flows in one direction through
    the conductor
    “direct-drive” Adrive-train concept in which the need for a gearbox is eliminated and
    the turbine rotor directly drives the generator rotor
    “excitation” Using an electric current to create a magnetic field
    “full power rectification” The converter technology wherein the WTGconverter’s rated capacity
    is equal to the WTG’s rated capacity
    “gigawatt” or “GW” A unit of power. 1 GW equals 1,000 MW
    “greenhouse gas” The natural and man-made gaseous components of the atmosphere
    that absorb and release infrared radiation
    – 24 –“grid connection” When a WTG is connected to the grid and is transmitting power
    “hub” The component of the WTG to which the blades are fixed
    “hub height” The height of the hub center above the ground
    “hybrid-drive” A geared drive transmission using a low-speed gearbox
    “IEC Type I, II, III and S models” According to the IEC 61400-1 (2005) standard forWTG design, a type
    I model is defined as a WTG model able to operate in environments
    with a reference wind speed of less than 50m/s measured at the hub
    height of a WTG; a type II model is defined as a WTG model able to
    operate in environments with a reference wind speed of less than
    42.5m/s measured at the hub height of a WTG; and a type III model is
    a WTG model able to operate in environments with a reference wind
    speed of less than 37.5m/s measured at the hub height of a WTG; and a
    type S model is a WTG model able to operate in the specific
    environment defined by both the WTG manufacturer and the customer
    “kilowatt” or “kW” A unit of power. 1 kW equals 1,000 watts
    “kilowatt hour” or “kWh” The unit of measurement for calculating the quantity of power
    production output. One kilowatt hour is the work completed by a
    kilowatt generator running continuously for one hour at the rated
    output capacity
    “low voltage ride through capability” The ability of a WTG to continue to stay connected to the grid within a
    given period of time when the grid is experiencing abnormal voltage
    drops
    “megawatt” or “MW” A unit of power. 1 MW equals 1,000 kW
    “MW-level WTGs” WTGs with rated output capacity of equal to or greater than 1 MW
    “nacelle” The structure at the top of the tower just behind the blades that houses
    the key components of the wind turbine, including the turbine rotor
    shaft and generator
    “permanent magnet” A material that retains its magnetic properties without external
    magnetic field
    “permanent magnet generator” or
    “permanent magnet synchronous
    generator”
    A synchronous generator in which permanent magnet is used on the
    generator rotor
    “pitch control” or “pitch regulated” A method of controlling the power of a WTG by using the control
    system to adjust the angle of the blade (or inlet angle)
    “power curve” The curve showing the relation between the output power of a WTG
    and the wind speed
    “rated output capacity” The output capacity as per a WTG nameplate
    – 25 –
    GLOSSARY OF TECHNICAL TERMS“rated wind speed” The wind speed range at which a WTG can produce its rated output
    capacity
    “reactive power control” A method of transmitting or absorbing reactive power to stabilize the
    grid voltage
    “renewable energy” Energy sources that are sustainable, or for all practical purposes,
    cannot be depleted, such as geothermal, biomass, wind and sunlight.
    Unless otherwise specified, for purposes of this prospectus, renewable
    energy excludes conventional hydropower
    “SCADA” Supervisory Control and Data Acquisition
    “stall-regulated” A method to control and regulate the power generated by a WTG.
    When the wind speed exceeds the rated wind speed of the WTG, the
    blade stalls and no further increase in the energy is captured by the
    turbine rotor, thereby controlling the power output of the WTG
    “terawatt hour” or “TWh” The unit of measurement for calculating the quantity of power
    production output. 1 TWh equals 1 billion kWh
    “total installed capacity” (also referred to
    as “cumulative installed capacity” by
    BTM or in other industry reports)
    The sum of the rated output capacity for power generation equipment
    such as WTGs, installed
    “tower” The supporting structure which supports and elevates a turbine rotor
    and nacelle
    “turbine rotor” The component of a WTG that consists of a hub and blades and drives
    the generator rotor
    “unit capacity” The rated power of an individual WTG
    “variable pitch system” The electrical system in a WTG that ensures high efficiency at
    different wind velocities. This system is capable of real-time
    regulation of the WTG’s rotational speed when wind velocity
    changes through control of the blade angle for optimal operation
    and energy capture
    “wind farm” A power plant in which a group of WTGs are installed to generate
    electricity from wind power
    – 26 –
    GLOSSARY OF TECHNICAL TERMSFORWARD-LOOKING STATEMENTS
    We have included in this prospectus forward-looking statements that are not historical facts, but relate to our
    intentions, beliefs, expectations or predictions for future event. These forward-looking statements are contained
    principally in the sections entitled “Summary”, “Risk Factors”, “Industry Overview”, “Business”, and “Financial
    Information”, which are, by their nature, subject to risks and uncertainties.
    In some cases, we use the words “aim”, “anticipate”, “believe”, “continue”, “could”, “expect”, “intend”,
    “may”, “plan”, “potential”, “predict”, “project”, “propose”, “seek”, “should”, “will”, “would” and similar
    expressions or statements to identify forward-looking statements. These forward-looking statements include,
    without limitation, statements relating to:
    k our business strategies and plan of operations;
    k our capital expenditure and funding plans;
    k projects under construction and planning;
    k general economic conditions;
    k capital market development;
    k the trends of industry and technology;
    k certain statements in “Financial Information” with respect to trends in prices, volumes, operations,
    margins, overall market trends, risk management and exchange rates;
    k the regulatory environment for the electrical power industry in general and the level of policy support for
    renewable energy; and
    k other statements in this prospectus that are not historical fact.
    These forward-looking statements are subject to risks, uncertainties and assumptions, some of which are
    beyond our control. In addition, these forward-looking statements reflect our current views with respect to future
    events and are not a guarantee of future performance. Actual outcomes may differ materially from the information
    contained in the forward-looking statements as a result of a number of factors, including, without limitation, the risk
    factors set forth in “Risk Factors” and other risks.
    These forward-looking statements are based on current plans and estimates, and speak only as of the date they
    are made. We undertake no obligation to update or revise any forward-looking statement in light of new
    information, future events or otherwise. Forward-looking statements involve inherent risks and uncertainties
    and are subject to assumptions, some of which are beyond our control. We caution you that a number of important
    factors could cause actual outcomes to differ, or to differ materially, from those expressed in any forward-looking
    statements.
    Due to these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in
    this prospectus might not occur in the way we expect, or at all. Accordingly, you should not place undue reliance on
    any forward-looking information. All forward-looking statements contained in this prospectus are qualified by
    reference to these cautionary statements.
    – 27 –RISK FACTORS
    You should consider carefully all of the information set out in this prospectus and, in particular, should
    evaluate the following risks in connection with an investment in the Offer Shares before making an investment.
    You should pay particular attention to the fact that we are a company incorporated in the PRC and most of our
    business is conducted in the PRC. There are risks associated with investing in the H Shares not typical of
    investment in the capital stock of companies incorporated and/or engaging in business in Hong Kong or the
    United States. Any of the risks and uncertainties described below could have a material adverse effect on our
    business expansion, results of operations, financial condition or the trading price of the H Shares, and could
    cause you to lose your investment.
    We believe that there are certain risks involved in our operations and the Global Offering. Many of these
    risks are beyond our control and can be categorized into: (i) risks relating to our business; (ii) risks relating to
    the industry in which we operate; (iii) risks relating to the PRC; and (iv) risks relating to the Global Offering.
    RISKS RELATING TO OUR BUSINESS
    We may be affected if the government reduces or ceases its support and encouragement of the wind power
    industry.
    In recent years, the PRC Government has promulgated a series of laws and regulations to support and
    encourage the development of wind power. These include The Renewable Energy Law of the PRC, Medium-to-Long
    Term Development Plan for Renewable Energy, Notice of the NDRC on Related Requirements for the
    Administration of Wind Power Construction, and Notice of the NDRC on Perfecting the Policy Governing the
    Price of Wind Power Sold to the Grid. These laws, regulations and policies directly affect the prospects of the
    domestic wind power industry and wind power equipment manufacturing industry and are major factors that affect
    the demand for our products.
    The level of acceptance of wind power as a viable form of renewable energy by the government agencies that
    establish energy policies as well as the general public in markets in which we operate has a significant effect on us.
    The direct or indirect reduction or termination of such government support may have a negative impact on the PRC
    wind power market. In the event of changes in the support by the PRC Government of the industry in which we
    operate, or changes to the policies associated with our industry, our operations may be affected. Moreover, changes
    in government policies and support in those countries to which we plan to expand our business may also affect us. In
    the event of changes in these preferential policies by the PRC Government and/or the relevant authorities of other
    markets in which we intend to operate or changes in the level of public acceptance for wind power in such markets,
    wind power may become less attractive, and this could have a material and adverse effect on our business, results of
    operations and prospects.
    We may not be able to continue our rapid growth and implement our business expansion plans successfully.
    We have experienced significant growth in terms of production capacity, revenue and profits during the Track
    Record Period. We plan to secure further growth by increasing our sales, expanding the geographical coverage of
    our production bases, researching and introducing more advanced WTGs, improving the performance of our
    products, exploring business opportunities for our wind power services and wind farm investment, development and
    sales business, and expanding our international operations. The success of our plans for growth depends on certain
    factors, including, but not limited to, our ability to expand, construct or operate our production bases; implement
    and manage our business expansion plans; secure financing necessary for business expansion; operate in an efficient
    – 28 –manner; maintain and expand our existing customer base; manage relationships with suppliers; ensure timely and
    sufficient supply of parts and components; hire, train and retain qualified personnel and deal with challenges that
    may arise in new and existing markets and business areas. Some of the above factors are beyond our control.
    Although we have commenced active efforts in all the abovementioned areas, if we fail to successfully implement
    our business expansion plans, maintain and further enhance our domestic and international market share, further
    increase sales and promote newly developed products, develop businesses with strategic significance, or, if we
    encounter difficulties in any of the foregoing, our growth, business prospects, results of operations and financial
    condition may be materially and adversely affected.
    Moreover, substantial capital is necessary for the construction, maintenance and operation of new facilities,
    equipment purchases and R&D of new products and technologies. During the Track Record Period, our total capital
    expenditures were RMB395.8 million, RMB2,043.0 million and RMB2,078.3 million, respectively. If we fail to
    obtain adequate financing on acceptable terms, we may not be able to sufficiently fund our operations or implement
    our expansion strategy. As a result, we may be forced to adopt alternative strategies that may include delaying
    capital expenditures, refinancing of our indebtedness or seeking equity capital. These may subject us to loss of
    market competitiveness and future revenues, and thus materially and adversely affect our results of operations and
    financial condition.
    We face intense competition in our major markets.
    We face increasingly intense competition in the markets in which we operate. Now and in the near future,
    most of our business will continue to be concentrated in the PRC. The PRC wind power industry has seen rapid
    development since the introduction of a series of wind power incentives in 2005, and compared to 2004, when the
    PRC wind turbine market was dominated by eight or nine Chinese and international suppliers, there are now more
    than 80 wind turbine manufacturers that have entered the PRC market. Although the supply of WTGs in the PRC
    had in the past fallen short of demand, the production capacity for WTGs has exceeded demand recently as a result
    of the rapid increase in the number of wind turbine suppliers and the expansion of production facilities. Some of
    these manufacturers may have greater financial, sales and marketing, R&D, personnel, or other resources than us.
    Some of these new market entrants may achieve immediate market share through leveraging existing business
    relationships and acquisition of wind turbine technologies from third parties. Our competitors may also respond
    more quickly to changes in technology or customer requirements, or offer similar products at prices lower than ours.
    Furthermore, as defects in WTGs and wind power services may not appear in the early stages of using the product or
    service, new market entrants who may produce products or provide services of sub-standard quality may market
    their products and services for an extended period of time before potential customers can gain actual knowledge of
    the quality of their products and services. All of the foregoing factors have intensified market competition, and we
    may face pressure in product pricing and competition for orders. In particular, our historical WTG ASP are not
    necessarily representative of future trends for our product pricing, and we may adjust our selling prices downward
    due to pricing pressure. Any adverse or unforeseen change in our competitive environment may have a material and
    adverse effect on our business, results of operations, financial condition and prospects.
    We may not be able to obtain timely and stable supply of the core parts and components required for our business.
    Most of our parts and components are purchased domestically. Due to the relatively high technical threshold
    for the production of certain core parts and components, the number of qualified suppliers in the PRC is limited. To
    reduce the impact of this, we have in-house capability to develop, design and manufacture certain core parts and
    components. We also own shares of some promising parts and components suppliers, and we maintain close
    – 29 –
    RISK FACTORSrelationships with external suppliers that are able to manufacture and supply parts and components required by our
    WTGs in accordance with our technical parameters and quality standards.
    Although we have long-term relationships with most of our suppliers and believe that we are able to purchase
    the requisite parts and components on reasonable commercial terms from other qualified suppliers when necessary,
    we cannot assure you that the suppliers can meet all of our specified quality standards and technical specifications
    for increasing quantities in a timely manner and at acceptable prices. If our existing suppliers materially reduce or
    cease supply of parts and components to us, and we fail to source the parts and components that satisfy our quality
    standards and requirements from other suppliers, our business operations and financial performance may be
    materially and adversely affected.
    A significant portion of our revenue is derived from our major customers and changes in their requirements may
    have a material and adverse effect on our business.
    As most of our customers are China’s large power producers and other enterprises investing in renewable
    energy, our customer base is relatively concentrated. For each of the three years ended December 31, 2007, 2008
    and 2009, sales to our five largest customers in aggregate accounted for 39.8%, 37.7% and 38.7% of our total
    revenue, respectively.We anticipate that the revenue derived from these major customers will continue to represent
    a significant proportion of our total revenue in the future. If our customers, including our five largest customers,
    experience negative changes in their business, adjust their investment strategies or slow down the growth rate of
    their investment in wind power, it may result in a reduction or cessation of their purchase orders with us. If we fail to
    obtain a comparable level of purchase orders from new customers, our business, results of operations and financial
    condition may be adversely affected.
    We may not be able to develop new products that meet changing market demands or successfully introduce new
    products in a timely manner.
    WTG technology evolves rapidly. WTG unit capacity is progressively increasing with improved operational
    performance, and our customers are demanding more cost-effective WTGs. To maintain our market-leading
    position, we will be required, on a rapid and consistent basis, to design and develop new and improved WTGs that
    keep pace with technological developments in order to meet the higher demands of our customers. Therefore, we
    have devoted substantial resources to our R&D activities. However, we cannot assure you that our R&D activities
    will yield the anticipated results. If we encounter delays in technology development, fail to meet changing market
    demands or successfully introduce newly developed products to the market, and our competitors respond more
    rapidly than we do, our business, financial condition and results of operations may be materially and adversely
    affected.
    We may not be able to adequately protect our intellectual property rights.
    We rely primarily on patents and proprietary technologies to protect our technological know-how, which
    includes designs and technologies for our products and core components. Furthermore, certain know-how cannot be
    registered, and we rely on confidentiality and trade secrets protection obligations of our suppliers and employees to
    protect this know-how. We are also applying for the registration of certain trademarks and patents. Please see the
    section entitled “Business — Intellectual Property” in this prospectus for more details. We cannot assure you that
    these measures will be sufficient to prevent any infringement of our intellectual property rights or that our
    competitors will not independently develop alternative technologies that are equivalent or superior to our
    technologies. Furthermore, we cannot assure you that all our registration applications will be successful, or our
    – 30 –
    RISK FACTORSregistered intellectual property rights will not be subject to any objection. In the event that the steps we have taken
    and the protection afforded by law do not adequately safeguard our intellectual property rights, or we are not able to
    register or defend our intellectual property rights, our competitors may exploit our intellectual property in the
    manufacturing and sale of competing products, which could materially and adversely affect our business.
    If we fail to maintain an effective quality control system, our product quality and thus our business may be
    materially and adversely affected.
    The performance, quality and safety of our products are critical to our customers, our reputation and
    ultimately, our success. Accordingly, we have established and maintained stringent quality assurance standards and
    inspection procedures, including quality control of the parts and components purchased from external suppliers.
    Our quality control system has been accredited the ISO 9001:2008 certification. Please see the section entitled
    “Business —Quality Assurance” in this prospectus for further details. The effectiveness of our quality control
    system is determined by various factors, including the design of the system, implementation of quality standards,
    quality of training programs and the mechanism to ensure our employees’ adherence to our quality control policies
    and guidelines, especially our ability to monitor and manage our supplier quality system. If we fail to maintain an
    effective quality control system, we may produce defective products that expose us to product liabilities and
    warranty claims. As a result, our reputation and relationships with existing customers may be undermined, and our
    business may be materially and adversely affected.
    If we fail to effectively control costs, in particular the costs of parts and components, our results of operations and
    financial condition may be materially and adversely affected.
    In order to maintain our competitiveness and achieve profitability, we must effectively control our costs. A
    significant portion of our business with our customers is conducted pursuant to fixed price contracts, awarded on a
    competitive bidding basis. The profit margins realized on such fixed price contracts may vary from original
    estimates as a result of changes in costs and production volume over their term due to factors such as changes in the
    costs of components, materials or manpower, difficulties in obtaining adequate financing, unanticipated technical
    problems with parts and components being supplied, project or schedule modifications, delays caused by local
    weather conditions and suppliers’ failure to fulfill their obligations. All of our revenue during the Track Record
    Period was derived from fixed price contracts.
    Among these, fluctuations in the purchase prices of parts and components are a key factor affecting our costs.
    The parts and components used for manufacturing WTGs require substantial amounts of steel, copper, various other
    metals and composite materials. The prices and availability of these materials may be affected by factors beyond our
    control, including global demand for and supply of such materials, inflation and local economic cycles, price
    control measures imposed by the government or private companies, international geopolitical issues and instability
    of the government of the exporting countries.We experienced fluctuations in the prices of raw materials during the
    Track Record Period, and any increase in their prices will cause our costs to increase. For instance, a significant
    fluctuation in the prices of raw materials in 2008 affected the prices of the parts and components required for our
    products. During the contractual term, it is difficult to predict price trends of raw materials, and price fluctuations in
    raw materials may have a material and adverse effect on our financial condition and results of operations.We do not
    hedge our exposure to movements in the prices of steel, copper, rare earth materials and other raw materials.We are
    thus exposed to the risk of increases in the prices of these raw materials and components and to the extent we cannot
    pass on the price increases in these raw materials and components to our customers fully or in part, our business and
    financial condition could be affected. Although we believe that our resources, experience and project management
    skills allow us in most cases to estimate costs accurately and to control costs effectively, there can be no assurance
    – 31 –
    RISK FACTORSthat we will realize expected profits from all of our fixed price contracts. In the event this occurs, our results of
    operations and financial condition may be materially and adversely affected.
    Our revenue may fluctuate through the year due to seasonality of business.
    During the Track Record Period, our customers were located primarily in the northern part of China, where,
    due to weather conditions, the construction of wind farm projects tends to commence at the beginning of the year,
    with construction carried out through the year, and installation at the end of the year. Consequently, the quantity of
    our WTGs delivered and sales revenue in the third and the fourth quarters are generally greater than in the first and
    second quarters. As our revenue fluctuates seasonally, our interim financial results may not reflect our financial
    results or performance for the entire year. Comparisons of sales and operating results between different periods in a
    single financial year for our business segments, or between the same periods in different financial years, are not
    necessarily meaningful and should not be relied on as indicators of our performance. We try to mitigate the
    influence of such seasonal factors by increasing sales to other regions in the PRC and managing delivery schedules.
    The seasonal nature of our revenue requires us to control our operating capital carefully so as to provide our business
    with adequate cash for operations. Failure to manage seasonality in our business may cause our revenue and
    financial condition to be materially and adversely affected.
    We are subject to risks associated with changes in preferential tax treatment.
    We are subject to various PRC taxes, including the current statutory PRC enterprise income tax of 25% as
    determined in accordance with the relevant PRC tax rules and regulations. Please see the appendix entitled
    “Appendix VI—Taxation and Foreign Exchange” to this prospectus for further details. However, PRC national and
    local tax laws provide certain preferential tax treatments applicable to different enterprises, industries and locations.
    Our Company and some of our subsidiaries are currently taxed at preferential rates due to the nature of our business
    activities and the location of our projects. For instance, our Company has been accredited as a high and new
    technology enterprise and is presently entitled to the preferential enterprise income tax rate of 15%. Please see the
    section entitled “Financial Information — Results of Operations for the Track Record Period — Income Tax” in
    this prospectus for further details. Termination or revision of any such preferential tax treatments may materially
    and adversely affect our results of operations and financial condition.
    Failure to fulfill customer orders due to delays in our production process may have a material and adverse effect
    on our business prospects, results of operations and financial condition.
    The manufacturing and sales of our WTGs involves purchases of parts and components, assembly of the units,
    and transportation of finished products. Any unexpected delay in the process may affect our ability to deliver
    products on time.We cannot assure you that we can always fulfill customer orders on time. In addition, we provide
    letters of guarantee to our customers for our fulfilment of sales contracts. Please see the section entitled “Financial
    Information — Contingent Liabilities” in this prospectus for more details. Any failure to fulfil customer orders due
    to delays in our production process may affect our current sales, and undermine our reputation and market position
    and thus the quantity of future orders. Further, we may be subject to substantial contractual penalties or obligations
    in connection with the letters of guarantee we have provided. Any of these may have a material and adverse effect on
    our business prospects, results of operations and financial condition.
    – 32 –
    RISK FACTORSClauses in our contracts with customers may be modified.
    We sign contracts with our customers for the supply of our WTGs. However, we cannot assure you that we and
    our customers will not modify the clauses in our existing contracts due to delays in the execution of contracts and for
    other reasons, in particular with respect to the price, quantity and delivery time. This could occur due to factors
    beyond our control or the control of our customers, such as general changes in industry market prices, adverse
    economic conditions or difficulties in obtaining required government approvals and permits. Any material adverse
    change in contract clauses, such as price decreases, reduction of order quantity or change of delivery time, or
    difficulties encountered in performing the contracts may have a material and adverse effect on our results of
    operations, financial condition and cash flows.
    Availability of credit and fluctuations in the interest rates of our bank borrowings and other loans may affect our
    business expansion or financial performance.
    We have obtained bank loans to support our business expansion and provide financing for our development of
    wind farms. For the three years ended December 31, 2007, 2008 and 2009, we have had RMB470.0 million,
    RMB87.4 million and RMB332.2 million working capital-related bank borrowings and other loans and
    RMB153.0 million, RMB1,244.3 million and RMB2,291.8 million project-related bank loans outstanding,
    respectively. During the same periods, the effective interest rates associated with our working capital-related
    bank borrowings and other loans were 6.0%, 4.3% and 4.3%, respectively, and the effective interest rates associated
    with our project-related bank loans were 7.8%, 8.4% and 5.3%, respectively. Due to the economic stimulus plan
    implemented by the PRC Government and the global economic crisis, the one-year RMB benchmark loan rate was
    reduced several times in 2008.We believe that this interest rate may increase as the Chinese economy recovers from
    the global economic crisis. Our interest expenditure may increase significantly in the future, which may have a
    material and adverse effect on our financial performance.
    In addition, the PRC Government has recently adopted a number of measures in monetary policy, including
    increasing the reserve ratio of commercial banks, which may have the effect of restricting money supply and the
    availability of credit. If these measures result in PRC banks reducing their volumes of commercial loans, our access
    to financing to fund our business expansion may be adversely affected.
    We may not be able to obtain wind farm projects with suitable wind resources or realize the expected profit from
    our development of wind farm projects.
    The sustainable development of our wind farm investment, development and sales business depends on many
    factors, in particular, our ability to continuously obtain wind farm projects with suitable wind resources. Although
    we are actively engaging in the overseas expansion of our wind farm investment, development and sales business,
    our activities remain concentrated in the PRC market.We believe that, as the development of wind farm projects in
    the PRC increases and competition for premium quality wind farm projects grows, such premium quality wind farm
    projects will be more difficult to obtain. Moreover, even if we succeed in obtaining suitable wind farm projects and
    in developing these projects, there can be no assurance that we will be able to successfully complete construction of
    our wind farm projects or sell our completed wind farm projects, or that the wind farm projects we develop and sell
    will generate the expected profits. If we fail to obtain suitable wind farm projects or realize the expected profit from
    our development of wind farm projects, our business, profitability and prospects may be materially and adversely
    affected.
    – 33 –
    RISK FACTORSOur results of operations may be materially and adversely affected if we fail to retain or hire qualified personnel
    at reasonable costs.
    The success of our products depends on our ability to retain qualified R&D, production, quality control and
    after-sales service and operations personnel. These departments require the continued service of our skilled
    personnel and our ability to recruit additional skilled personnel in the future. Due to the rapidly growing demand for
    qualified personnel in China, competition for such personnel is intensifying. If we fail to retain or hire qualified
    personnel, we may experience difficulties in developing new products, applying new technologies, expanding
    production capacities, maintaining product quality or providing our customers with quality after-sales services,
    which may in turn have a material and adverse effect on our business and reputation.
    In addition, due to our relatively complex production process, it generally takes three to five months to train
    newly employed workers so that they may acquire the necessary skills, and some skilled workers are not easily or
    quickly replaceable. Hence, if a significant portion of our technically skilled workers terminate their employment
    relationships with us in a short period of time, we may encounter interruption of our production or services, which
    may substantially impact our operations.
    Moreover, in the global context, labor costs in China are relatively low. This is one of our competitive
    advantages over foreign competitors. In the event of significant increases in the salaries of qualified personnel in the
    PRC market, our labor cost may significantly increase and our profit margins and market competitiveness may be
    materially and adversely affected.
    Our success depends on the stability of our senior management team and successful implementation of our
    management incentive system.
    The experience and leadership of our senior management team have been critical to our success, especially
    with regard to our development strategy and R&D. For more information about our senior management, please see
    the section entitled “Directors, Supervisors and Senior Management” in this prospectus. Moreover, our
    management incentive system is one of the key factors that contributes to retaining our senior management
    team and allowing us to gain the most from their talents. Our future growth will require us to maintain a stable and
    competent senior management team, in particular, ensuring the continued service of our chairman and chief
    executive officer,Mr.Wu Gang. The competition for qualified senior management is intense. If we lose the services
    of any of these key management personnel, or fail to recruit and retain new talent, or fail to maintain an attractive
    management incentive system in the future, our planned growth may not be realized and our business prospects,
    results of operations and financial condition may be materially and adversely affected.
    Our international marketing and sales plans and strategies may not yield the desired results.
    While most of our sales revenue is generated from the PRC, we are actively developing our overseas
    businesses. This involves setting up sales offices, marketing activities, establishment or acquisition of production
    facilities, construction or acquisition of wind farms, provision of wind farm services and other activities. Some of
    our recent efforts abroad include establishment of a production base at the headquarters of our subsidiary in
    Germany and commencing sales of our products in Europe, setting up branches in the United States and Australia as
    well as the successful completion of a demonstration wind farm project in the United States to build up our track
    record there. Please see the section entitled “Business— Sales and Marketing” in this prospectus for more details
    on our overseas marketing activities. There is no assurance that our overseas growth strategies will be implemented
    successfully. Our global business expansion, being pursued through our branches in the United States, Australia and
    Germany, may be hindered by risks such as: low demand for our products, lack of a track record in these markets,
    – 34 –
    RISK FACTORSlack of availability of overseas financing on suitable terms to fund our international expansion, possible difficulties
    in the management of overseas personnel and business operations including a potential increase in labor costs due to
    our overseas expansion, lack of understanding of the local business environment, financial and management system
    or legal system, volatility in currency exchange rates, potentially more stringent product liability requirements,
    cultural differences, changes in political, regulatory or economic environments in the foreign countries or regions,
    as well as restrictions on foreign trade. Also, in certain markets, WTG manufacturers may be required to provide
    specific product warranties in order for the relevant wind farm developers to receive financing for their wind farm
    projects.We have provided warranties to our overseas customers, but in the event our warranties are deemed not to
    be in line with the requirements of financing providers in overseas markets, our customers may not be able to obtain
    the relevant financing, which would then affect their demand for our products and services. If we fail to manage the
    above risks effectively, our global expansion may be hindered, which may in turn result in a material and adverse
    effect on our business prospects, results of operations and financial condition.
    Moreover, the fluctuation in the global economy in the second half of 2008 resulted in credit tightening, an
    increased unemployment rate and liquidity problems for many industries. This had a material and adverse effect on
    the U.S. and other major economies and led to a global economic downturn, which may affect our expansion plans
    in the global market.
    If we are unable to obtain power generation business licenses for wind farms that we own and operate, there may
    be a material and adverse effect on our business.
    The Renewable Energy Law of the PRC clearly stipulates that power grids shall acquire wind power electricity
    in full. In accordance with the Provisions for the Administration of Electric Power Business Licenses issued in
    2005, unless otherwise provided by the SERC, a company may not engage in power generation, transmission,
    dispatch and sales without obtaining an electric power business license. In particular, our PRC legal advisor
    confirmed that power generating projects which became operational after August 1, 2006 shall obtain a power
    generation business license within three months from the commencement of operations. Since the processing time
    by the relevant PRC authorities of an application for a power generation business license tends to be relatively long,
    it is not unusual in the power industry for power generating projects to begin trial operation after completion of
    construction, apply for the license upon completing the trial operation period, and continue to operate after the
    application is submitted. The trial operation period is generally assumed to comprise 240 hours but is subject to
    various factors including weather conditions and the actual period of operation usually ends up being longer. Prior
    to obtaining this license, income generated from operation of wind farms may be confiscated and fines up to an
    amount five times of such income may be imposed. As of the Latest Practicable Date, we had obtained the power
    generation business licenses for all the wind farms which we currently own and operate. As we will continue to own
    and operate wind farms in the future, we will use our best endeavors to ensure compliance with the relevant laws and
    regulations as applied by the relevant regulatory authorities in the PRC and obtain the power generation business
    licenses for our wind farms in the future. However, procedures for granting licenses vary by local area, and certain
    provinces may deny requests for licenses for various reasons. If we are unable to obtain the requisite power
    generation business licenses, there may be a material and adverse effect on our business, including the forfeiture of
    revenue, imposition of fines or cessation of operations at the wind farms.
    We have not obtained valid title certificates for some of the properties and land that we own and occupy.
    Our applications for the title certificates in respect of some of our properties and land are currently being
    processed. Please see the section entitled “Business —Properties” in this prospectus for further details. There can
    be no assurance that we will be able to obtain valid title certificates for all the properties and land. Our rights as
    – 35 –
    RISK FACTORSowner or occupant of these properties and buildings may be adversely affected due to the absence of such valid title
    certificates. Moreover, we cannot assure you that there will not be challenges in respect of our rights in relation to
    the relevant properties and land that we use or occupy which may result in interference with our business operations
    carried out on the affected properties or land, and cause a material and adverse impact on our business, results of
    operations and financial condition.
    We are subject to the risk of product liability claims and in some cases may not have sufficient insurance
    coverage.
    Although we have purchased insurance coverage, due to the complex technical specifications of our products,
    we may be subject to substantial product liability claims due to quality defects or shutdown resulting from
    malfunctions of our WTGs. Moreover, we provide customers with contractual warranties for the operating
    performance of our WTGs. After preliminary inspection, we will normally provide a letter of guarantee issued
    by a bank amounting to up to 5.0% of the total contract price to our customer against fulfilment of our warranty
    obligation, who may request payment from the bank in the event our obligation is not met. The warranty period of
    our products is generally 24 months from the day on which the preliminary inspection certificate is issued, and in a
    few instances, the warranty period may be 30 to 60 months. As of March 31, 2010, our total amount of warranty
    provision outstanding was RMB490.8 million. Our Directors are of the view that we have made adequate provisions
    for product quality warranties. If our products fail to meet these quality standards and technical requirements during
    the warranty period, or if, after expiration of the warranty period, significant product defects are discovered, or
    technical defaults which result in WTG downtime occurring, or the performance of our products falls below the
    requisite technical standard, we may be exposed to warranty expenses and costly product liability claims or
    litigation. As of the Latest Practicable Date, we have not been sued for any mechanical failure, accident, breach of
    warranty or product fault. Although we have purchased product insurance coverage for the warranty period, there
    may be difficulty in receiving compensation from the insurance companies, or the processing time may be lengthy
    or we may not be able to receive sufficient compensation to cover our liability or damages in full. If we fail to
    receive compensation from the insurance companies for our losses, our business, results of operations and financial
    condition may be materially and adversely affected.
    Substantial damage to persons or loss of property may occur in the course of our production and construction
    processes.
    Our production and construction processes involve dangerous activities, including aerial, engineering and
    routine construction works.We are required to comply with the necessary safety requirements and standards. Please
    see the section entitled “Business —Safety and Environmental Protection” in this prospectus. Risks associated
    with our production and construction activities include work injury accidents or geological hazards, which may
    result in personal injuries or fatalities and damage to property and equipment. Accidents related to any of these may
    result in personal injury claims, subcontractor claims, cessation of business, or civil and criminal penalties.We may
    also be liable for claims from third-party contractors.We do not maintain third party liability insurance in respect of
    our operations as it is neither industry practice nor a mandatory requirement under PRC law. If we incur substantial
    losses or liabilities due to the above reasons and our insurance coverage is unavailable or inadequate to cover such
    losses or liabilities, our results of operations and financial condition may be materially and adversely affected.
    Our production and operations may be affected by factors beyond our control.
    Our manufacturing business may be interrupted for reasons beyond our control, which may include such
    natural disasters as bad weather conditions, flooding, cyclones, typhoons, blizzards, snowstorms, landslides,
    – 36 –
    RISK FACTORSearthquakes, and fire, as well as labor strikes, union strikes or social turmoil. Any major interruption of our business
    may have a material and adverse effect on our ability to manufacture and sell products or provide services. The
    transportation of WTGs and the construction, operation and maintenance of wind farms may be affected by bad
    weather conditions; in particular, in remote areas of China, the transportation of WTGs may be affected by poor
    infrastructure. If any of such events takes place, there may be a material and adverse effect on our production
    capacity, business, results of operations and financial condition.
    RISKS RELATING TO THE INDUSTRY IN WHICH WE OPERATE
    If major breakthroughs in other renewable energy technologies result in these technologies being superior to
    wind power, or the utilization of wind power is affected by the unpredictability of local weather conditions,
    demand for wind power projects may be affected.
    The cost and social effects of wind power may affect the demand for wind power projects. Wind power is
    currently considered to be the most cost-competitive source of renewable energy, with improving technology and
    decreasing cost. However, in the event of improved cost competitiveness of other forms of renewable energy or
    major breakthroughs in other forms of renewable energy, such alternative forms of energy may become more
    attractive than wind power and, accordingly, demand for wind power may then drop significantly.
    Moreover, the amount of wind power generated depends significantly on local weather conditions. As the
    status of wind resources may change, the effective utilization of wind power may be affected. This may result in a
    shift in demand toward other forms of renewable energy, such as solar, geothermal and tidal. If any of the above
    factors takes place, the wind power industry may be affected, and this may have a material and adverse effect on our
    business prospects, results of operations and financial condition.
    The lack of grid infrastructure may restrict or otherwise affect the development of wind farms and the timing of
    their development and therefore affect our ability to maintain or increase our historical level of operations, and
    the timing of revenue recognition from those operations.
    Wind farm sites are selected primarily with reference to wind resources. Many wind farms are far from major
    cities, making it difficult to transmit electric power to the major markets where demand for electric power is higher.
    To transmit electric power to areas of high demand in China, it will be necessary to build more grid infrastructure.
    As such infrastructure is expensive and has a large geographical span, the construction of wind farms requires
    adequate investment in and centralized planning of supporting grid facilities. The lack of grid infrastructure may
    restrict or otherwise affect the development of wind farms through preventing or delaying new construction or
    limiting the size of new wind farms. This may have a material and adverse effect on our ability to maintain or
    increase our historical level of operations, and the timing of revenue recognition from those operations.
    Demand for wind power is dependent upon the overall demand for electric power, and if the overall demand for
    electric power declines because of an economic downturn in the major markets, our business will be affected.
    Demand for wind power is closely related to overall demand for electric power. As the economy grows,
    economic activities such as industrial production and private consumption tend to grow, therefore increasing the
    demand for electric power. When the economy is in recession, however, activities such as industrial production and
    consumer demand may drop or come to a standstill, thereby decreasing the demand for electric power, including
    electric power generated from renewable energy. If the economy of the PRC, the United States and other major
    international markets no longer grows, or declines, there may be a drop in demand for electric power, including
    – 37 –
    RISK FACTORSpower generated from renewable energy such as wind power. This would have a material and adverse effect on our
    business, results of operations and financial condition.
    RISKS RELATING TO THE PRC
    The majority of our assets are located in the PRC and most of our revenue is derived from the PRC. Hence, our
    business operations and prospects are to a large extent affected by the economic, political and legal developments in
    the PRC.
    Changes in the economic, political and social conditions in the PRC may have a material and adverse effect on
    our results of operations and financial condition.
    The Chinese economy differs from that of most of the developed countries in many respects, including the
    degree of government involvement, control of capital investment, as well as the overall level of development. The
    PRC Government is committed to the continued reform of the economic system as well as the structure of the
    government. The PRC Government’s reform policies have emphasized the independence of enterprises and the use
    of market mechanisms. Since the introduction of these reforms, significant progress has been achieved in economic
    development, and enterprises have enjoyed an improved environment for their development. However, any changes
    in the PRC’s political, economic and social conditions may have a material and adverse effect on our present and
    future business operations, results of operations and financial condition.
    The slowdown of the Chinese economy may have a material and adverse effect on our results of operations and
    financial condition.
    Most of our revenue is derived from sales in the PRC. We rely on domestic demand for electric power,
    especially demand for wind power, to achieve growth in our revenue. Domestic demand for electric power is
    materially affected by industrial development, growth of private consumption and overall economic growth in
    China. The global crisis in financial services and credit markets in 2008 caused a slowdown in the growth of the
    global economy. Although there are signs of recovery in the global and Chinese economies, there is no assurance
    that any such recovery is sustainable. In addition, if the crisis in global financial services and credit markets was to
    persist, there is no certainty as to its impact on the global economy, especially the Chinese economy. As a result of
    global economic cycles, there is no assurance that the Chinese economy will grow in a sustained or steady manner.
    Any slowdown or recession of the Chinese economy may have a material and adverse effect on our results of
    operations and financial condition.
    The PRC’s legal system is still evolving, there exist uncertainties as to the interpretation and enforcement of PRC
    laws, and PRC laws are different from those of common law countries.
    Our Company is incorporated under the laws of the PRC and most of our activities are conducted in the PRC,
    hence our business operations are regulated primarily by PRC laws and regulations. PRC laws and regulations are
    based on written statutes, and past court judgments may be cited only for reference. Since 1979, the PRC
    Government has been committed to developing and refining its legal system and has achieved significant progress
    in the development of its laws and regulations governing economic matters, such as in foreign investment, company
    organization and management, business, tax and trade. However, as these laws and regulations are still evolving,
    and because of the limited number and non-binding nature of published cases, there exist uncertainties about their
    interpretation and enforcement.
    – 38 –
    RISK FACTORSIn addition, the PRC Company Law is different in certain important respects from company laws in common
    law countries or territories such as Hong Kong and the United States, particularly with regard to investor protection,
    including areas such as derivative actions by shareholders and other measures protecting minority shareholders,
    restrictions on directors, disclosure obligations, variations of class rights, procedures at general meetings and
    payments of dividends. Protection for investors under the PRC Company Law is increased, to a certain extent, by the
    introduction of the Mandatory Provisions and certain additional requirements that are imposed by the Listing Rules
    with a view to reducing the scope of differences between the company laws of Hong Kong and the PRC. The
    Mandatory Provisions and those additional requirements must be included in the articles of association of all PRC
    companies applying to be listed in Hong Kong. The Articles of Association have incorporated the provisions in the
    Mandatory Provisions and the Listing Rules. Despite the incorporation of those provisions, there is no assurance
    that you will enjoy an equal level of protection that you may be entitled to when investing in companies
    incorporated in common-law jurisdictions.
    The recurrence of Severe Acute Respiratory Syndrome or an outbreak of other epidemics, such as bird flu or
    Type A H1N1 influenza, may materially and adversely affect our results of operations and financial condition.
    Certain areas in the PRC, including the areas in which we operate, may be prone to infectious diseases such as
    Severe Acute Respiratory Syndrome, or SARS, H5N1 bird flu or Type A H1N1 influenza. The outbreak of
    infectious diseases in the past, depending on their scale, has damaged the regional and national economies in the
    PRC. In the case of a recurrence of SARS or other infectious diseases, especially in the areas in which we or our
    customers operate, the production and installation of WTGs, and the development, investment, operation and
    servicing of wind farms may be seriously affected, and there could be a material and adverse effect on our business
    prospects, results of operations and financial condition.
    Government control over the conversion of foreign exchange may affect our results of operations and financial
    condition.
    The Renminbi is not currently a freely convertible currency. As our operations are primarily conducted in the
    PRC and substantially all of our revenue is denominated in RMB, fluctuations in the RMB exchange rate against
    other currencies did not have a material impact on our results of operations during the Track Record Period.
    However, as we expand our business into international markets, our overseas income and expenditures may
    increase, so we anticipate our exposure to fluctuations in foreign exchange will increase.
    Pursuant to existing foreign exchange regulations in the PRC, we are allowed to carry out current account
    foreign exchange transactions (including dividend payouts) without submitting the certifying documents of such
    transactions to SAFE for approval in advance as long as they are processed by banks designated for foreign
    exchange trading. However, foreign exchange transactions for capital account purposes, including direct overseas
    investment and various international loans, may require the prior approval or registration with SAFE. If we fail to
    obtain SAFE’s approval to convert RMB into foreign currencies for such purposes, our capital expenditure plans,
    business operations and subsequently our results of operations and financial condition could be materially and
    adversely affected.
    We face foreign exchange and conversion risks, and fluctuation in the value of theRMBmay have a material and
    adverse effect on our business and your investment.
    The exchange rate between the RMB and the U.S. dollar and other currencies may fluctuate from time to time
    and be affected by, among other things, changes in China’s political and economic environment. Presently, the RMB
    – 39 –
    RISK FACTORSis no longer only pegged to the U.S. dollar, but is subject to a managed floating exchange rate regime based on
    market supply and demand with reference to a basket of currencies.We cannot predict how the RMB will fluctuate
    in the future. We face foreign exchange and conversion risks primarily through sales and procurement that are
    denominated in currencies other than the RMB. If the exchange rate of the RMB against other related foreign
    currencies were to appreciate, our export prices would increase, and the competitiveness of our products in
    comparison with products manufactured in other countries would decrease. On the other hand, if the exchange rate
    of the RMB against other related currencies were to depreciate, the price of our imported parts and components
    when converted into RMB would increase, which may have a material and adverse effect on us. Moreover, we will
    need to convert part of the proceeds denominated in foreign currencies from the Global Offering into RMB. The
    fluctuation in the exchange rate between the RMB and Hong Kong dollar and other currencies may have a material
    and adverse effect on our business, results of operations and financial condition, and thus your investment.
    It may be difficult to enforce judgments rendered by courts other than PRC courts against us or the Directors,
    Supervisors or senior management residing in China.
    Substantially all of our Directors, Supervisors and senior management reside within the PRC. Substantially
    all of our assets and the assets of our Directors, Supervisors and senior management are located within the PRC. The
    PRC does not have treaties providing for the reciprocal recognition and enforcement of judgments of courts with the
    United States, the United Kingdom, Japan and many other countries. Therefore, it may not be possible for investors
    to serve summons upon us or those persons in the PRC or to enforce against us or them in the PRC any judgments
    obtained from non-PRC courts. In addition, recognition and enforcement in the PRC of judgments of a court of any
    other jurisdiction in relation to any matter not subject to a binding arbitration provision may not be possible.
    The Articles of Association and the Listing Rules provide that disputes or claims for rights between holders of
    the H Shares and us, our Directors, Supervisors, senior management or holders of the A Shares, arising out of the
    rights and obligations provided in the Articles of Association, the PRC Company Law and the related laws and
    regulations and in relation to affairs of our Company, are to be resolved through arbitration in Hong Kong or the
    PRC, rather than by a court of law, except for disputes associated with the definition of shareholders or register of
    shareholders. Under the current arrangements for reciprocal enforcement of arbitral awards between the PRC and
    Hong Kong, awards made by PRC arbitral authorities, which are recognized under the Arbitration Ordinance of
    Hong Kong, can be enforced in Hong Kong. Hong Kong arbitration awards are also enforceable in the PRC.
    RISKS RELATING TO THE GLOBAL OFFERING
    Characteristics of the A Share and H Share markets may differ.
    The A Shares have been listed and traded on the SZSE since December 2007. Following the Global Offering,
    the A Shares will continue to be traded on the SZSE, and the H Shares will be traded on the Hong Kong Stock
    Exchange. Without approval from the relevant regulatory authorities, the A Shares and H Shares are neither
    interchangeable nor fungible, and there is no trading or settlement between the A share and the H share markets.
    Please see the subsection below headed “The conversion of A Shares to H Shares could have a material and adverse
    effect on the prevailing market price of the H Shares and our ability to raise capital in the future”. The A share and H
    share markets have different trading characteristics, including trading volume and liquidity, and investor bases,
    including different levels of participation of retail and institutional investors. As a result of these differences, the
    trading prices of our A Shares and H Shares may not be the same. Moreover, fluctuations in our A Share price may
    affect our H Share price and vice versa. Because of the different characteristics of the A share and H share markets,
    the historical prices of the A Shares may not be indicative of the performance of the H Shares. You should therefore
    – 40 –
    RISK FACTORSnot place undue reliance on the historical performance of the A Shares when evaluating an investment in the
    H Shares.
    The conversion of A Shares to H Shares could have a material and adverse effect on the prevailing market price
    of the H Shares and our ability to raise capital in the future.
    According to the stipulations by the State Council securities regulatory authority, A shares may be transferred
    to overseas investors, and such transferred shares may be listed or traded on an overseas stock exchange, provided
    that certain conditions are met and certain procedures are completed. Conversion of a substantial number of the A
    Shares to H Shares, or market anticipation that such conversion may occur, could materially and adversely affect the
    price of the H Shares. Further, assuming the Over-allotment Option is not exercised, 39,529,400 A Shares will be
    converted into H Shares and transferred to the NSSF in connection with the Global Offering. The NSSF has not
    entered into any lock up agreement with us or the Underwriters and would be free to sell the H Shares any time after
    the Global Offering. This may also materially and adversely affect the prevailing market price of the H Shares and
    our ability to raise capital in the future at a time and at a price favorable to us.
    As the Offer Price of the H Shares is higher than the net tangible asset value per share, you will experience
    immediate dilution.
    The Offer Price of the H Shares is higher than the net tangible asset value per share of the outstanding Shares
    issued to our existing Shareholders. Therefore, purchasers of the H Shares in the Global Offering will experience an
    immediate dilution in the net tangible asset value to HK$5.06 per Share (assuming an Offer Price of HK$21.40,
    being the mid-point of our indicative Offer Price range, and assuming the Over-allotment Option is not exercised),
    and the pro forma adjusted consolidated net tangible asset value per share of the Shares held by our existing
    Shareholders will increase. If, in order to expand our business in the future, we issue additional H Shares at a price
    below the net tangible asset value per share, the net tangible asset value per share of the H Shares held by the buyers
    of the H Shares may be diluted. As at the Latest Practicable Date, the share price of our AShares was RMB23.15 per
    A Share.
    The sales or potential sales of substantial amounts of the H Shares in the public market (including any future
    offering) may affect the prevailing market price of the H Shares and our ability to raise capital in the future, and
    future additional issuance of securities may dilute your shareholdings.
    The sales of substantial amounts of the H Shares or other securities related to the H Shares in the public
    market, or the issuance of new H Shares or other securities, or the market anticipation that such sales or issuance
    may occur, may cause fluctuations in the market price of the H Shares, and may materially and adversely affect our
    ability to raise capital at a time and at a price as we see fit in the future. Further, if we issue additional securities in
    future offerings, the shareholdings of the Shareholders may be diluted.
    There exist uncertainties about the Vensys Option and potential issuance of additional Shares pursuant to the
    exercise of the Vensys Option will cause dilution in your shareholdings.
    Pursuant to the Vensys Share SPA and the Vensys Supplemental Agreements relating to our acquisition of a
    70.0% equity interest in Vensys AG in 2008, we have granted the Vensys Option to each of the holders of the
    remaining 30.0% of the shares of Vensys AG (namely Vensys/Innowind, Saarwind and Windpark). Pursuant to the
    Vensys Option, Vensys/Innowind, Saarwind and Windpark may exchange the remaining 1.5 million shares of
    Vensys AG held by them in part or total into the Shares at a price of EUR11.78 per share of Vensys AG, and shall be
    – 41 –
    RISK FACTORSsubject to PRC laws, the relevant provisions of the PRC securities regulatory authority and the relevant rules of the
    stock exchange on which the Shares are listed at the respective date of the exercise of the Vensys Option. The
    number of our Shares to be exchanged upon the exercise of the Vensys Option will be calculated based on
    multiplying the number of shares of Vensys AG to be exchanged by the price of EUR11.78 divided by the market
    price of our Shares at the time the Vensys Option is exercised. Each of Vensys/Innowind, Saarwind and Windpark
    may request to exercise the Vensys Option from December 26, 2010 onwards. If Vensys/Innowind, Saarwind and
    Windpark fail to or are unable to exercise the Vensys Option before December 26, 2011, such option will
    automatically lapse. Please see the section entitled “Share Capital” in this prospectus for further details.
    There exist uncertainties about the enforcement and interpretation of the Vensys Option as set forth in the
    Vensys Share SPA including determination of the actual exchange ratio, the class of the Shares subject to exchange
    and the procedural steps required to exercise the Vensys Option. If any of Vensys/Innowind, Saarwind and
    Windpark chooses to exercise the Vensys Option and we have to issue additional Shares in order to exchange their
    remaining shares of Vensys AG into the Shares, the Shareholders would experience dilution in their holdings. The
    Vensys Option does not stipulate the class of Shares that we may issue if it is exercised, and we may therefore need
    to issue additional H Shares pursuant to exercise of the Vensys Option. Further, in the event of future market
    anticipation that such issuance may occur, the market price of the H Shares may fluctuate.
    There will be a five-Business-Day time gap between pricing and trading of the H Shares offered pursuant to the
    Global Offering.
    The Offer Price of the H Shares sold in the Global Offering will be determined on the Price Determination
    Date. However, the trading of the H Shares on the Hong Kong Stock Exchange will not commence until they are
    delivered, which is expected to be the sixth Business Day after the Price Determination Date. As a result, investors
    may not be able to sell or otherwise deal in the H Shares during that period. Consequently, holders of the H Shares
    may bear risks as adverse market conditions or other unfavorable circumstances may arise during the period
    between the Price Determination Date and the time trading begins (for instance, decrease in the price of the A
    Shares) and the price of the H Shares may be lower than the Offer Price at the start of trading.
    There is no assurance that we will adopt the same dividend policy as we have adopted in the past.
    We distributed dividends in the form of Shares and cash amounting to RMB500.0 million and
    RMB680.0 million during the two years ended December 31, 2007 and 2008, respectively. The Board of
    Directors on August 31, 2009 and the Shareholders in general meeting on September 25, 2009 approved a
    resolution that holders of our A Shares are entitled to our distributable profits accumulated prior to January 1, 2010,
    and holders of our H Shares and A Shares upon the completion of the Global Offering will be equally entitled to our
    distributable profits accumulated between January 1, 2010 and the Listing Date. On March 25, 2010, our
    Company’s 2009 annual general meeting approved the distribution of our Company’s consolidated actual
    distributable profits of RMB1,767.8 million as of December 31, 2009. As partial settlement of this
    distribution, on April 6, 2010, our Company issued 840 million A Shares and paid cash of RMB140.0 million
    to holders of our A Shares funded with cash from profits generated by our business. On May 26, 2010, our Board of
    Directors approved the distribution of RMB784.0 million in the form of a cash dividend paid out of our internal cash
    resources (and not out of our net proceeds from the Global Offering), subject to approval of our Shareholders in a
    general meeting to be held on June 12, 2010, the settlement date of which will be determined after the general
    meeting and is expected to be after the Listing. Our H Shareholders shall not be entitled to any portion of this cash
    dividend. Any future declaration of dividends will be proposed by the Board of Directors and the amount of any
    dividends will depend on various factors, including our results of operations, financial condition, future business
    – 42 –
    RISK FACTORSprospects and other factors that the board may determine to be important. For further details on our dividend policy,
    please see the section entitled “Financial Information — Dividend Policy” in this prospectus. There is no assurance
    that we will adopt the same dividend policy as we have adopted in the past.
    There has been no prior public market for the HShares, and the liquidity, market price and trading volume of the
    H Shares may be volatile.
    Prior to the Global Offering, there has been no public market for the H Shares. We have applied to the Hong
    Kong Stock Exchange for the listing of, and permission to deal in, the H Shares. However, there is no assurance that
    the Global Offering will result in the development of an active and liquid public trading market for the H Shares.
    The market price, liquidity and trading volume of the H Shares may be volatile.
    We cannot assure you that Shareholders will be able to sell their H Shares or achieve their desired price. As a
    result, Shareholders may not be able to sell their H Shares at prices equal to or greater than the price paid for their H
    Shares under the Global Offering. Factors that may affect the volume and price at which the H Shares will be traded
    include, among other things, variations in our revenue, earnings, cash flows and costs, announcements of new
    investments and changes in PRC laws and regulations.We cannot assure you that these developments will not occur
    in the future. In addition, shares of other companies listed on the Hong Kong Stock Exchange with significant
    operations and assets in the PRC have experienced price volatility in the past, and it is possible that the H Shares
    may be subject to changes in price not directly related to our performance.
    Certain industry statistics contained in this prospectus are derived from various publicly available official
    sources and may not be reliable.
    Certain statistical data and other information relating to the PRC and the industries in which we operate
    contained in, for instance, the section entitled “Industry Overview” in this prospectus, has been derived from
    various publicly available official publications. However, we cannot guarantee the quality of such source materials.
    Moreover, statistics derived from multiple sources may not be prepared on a comparable basis. Neither the Joint
    Sponsors, Underwriters or any of their Connected Persons or advisors, nor we or any of our Connected Persons or
    advisors has verified the accuracy of the information contained in such sources.We make no representation as to the
    accuracy of the information contained in such sources, which may not be consistent with other information
    compiled within or outside the PRC. Accordingly, these industry information and statistics contained herein may
    not be accurate and should not be unduly relied upon for your investment in us.
    Holders of the H Shares may be subject to PRC taxation.
    Under current PRC tax laws, regulations and rules, foreign individuals and foreign enterprises that are not
    PRC residents are subject to different tax obligations with respect to the dividends paid by us or the gains realized
    upon the sale or other disposition of H Shares. Foreign individuals who are not PRC residents are currently
    exempted from PRC individual income tax on dividends received from H shares and gains realized by such
    individuals upon the sale or other disposition of H shares. If the PRC Government withdraws the exemption in the
    future, such foreign individuals may be required to pay PRC individual income tax unless there are applicable tax
    treaties between the PRC and the jurisdictions in which the foreign individuals reside that reduce or exempt the
    relevant tax.
    For foreign enterprises that do not have establishments or premises in the PRC, or have establishments or
    premises in the PRC but their income is not related to such establishments or premises (“Non-resident
    Enterprises”), under the new PRC Enterprise Income Tax Law (the “New EIT Law”), they are subject to the
    – 43 –
    RISK FACTORSPRC enterprise income tax at a rate of 20% on their PRC-sourced income. The implementation rules to the New EIT
    Law provide that such tax rate will be reduced to 10%, subject to a further reduction according to applicable treaties
    on avoidance of double taxation. Further, pursuant to the Notice Concerning Withholding of Corporate Income Tax
    for Dividends Paid by Chinese Resident Enterprises to H Share Non-resident Enterprises Shareholders Outside the
    Mainland Territory (Guoshuihan (2008) No. 897), from 2008 onwards, the enterprise income tax on dividends paid
    by PRC enterprises to H shareholders that are Non-resident Enterprises shall be withheld at a uniform rate of 10%,
    subject to reduction according to applicable treaties on avoidance of double taxation. As such, dividends paid by us
    to our H Shareholders that are Non-resident Enterprises and gains derived from the sale or disposal in other forms of
    the H Shares by Shareholders that are Non-resident Enterprises are usually subject to the PRC enterprise income tax
    at the rate of 10%. As the New EIT Law and the implementation rules thereto are new, there remains significant
    uncertainty as to their interpretation and application by the PRC tax authorities. The implementation of enterprise
    income tax on capital gain remains uncertain. The PRC tax laws, rules and regulations may also change from time to
    time. If the tax rates stipulated in the New EIT Law and the related implementation rules are amended, the value of
    your investment in the H Shares will be materially affected. Please see the appendix entitled “Appendix VI—
    Taxation and Foreign Exchange” to this prospectus for further details.
    You should read the entire prospectus carefully and we strongly caution you not to place any reliance on
    any information contained in press articles or other media regarding us and the Global Offering.
    We strongly caution you not to place any reliance on any information contained in press articles or other
    media regarding us and the Global Offering. Prior to the date of this prospectus, there has been press and media
    coverage regarding us and the Global Offering, which included certain financial information, financial projections,
    valuations, capital expenditure and other information about us that do not appear in this prospectus. We have not
    authorized the disclosure of any such information in the press or media.We do not accept any responsibility for any
    such information and such information is not sourced from or authorized by our directors or our management. We
    make no representation as to the appropriateness, accuracy, completeness or reliability of any such information
    included in or referred to by the press or other media, nor the fairness or appropriateness of any forecasts, views or
    opinions expressed by the press or other media regarding us or the Global Offering. To the extent that any such
    information is inconsistent or conflicts with the information contained in this prospectus, we would not accept any
    responsibility for it and you should not rely on any such information. Accordingly, you are cautioned that, in making
    your decisions as to whether to purchase our H Shares, you should rely only on the financial, operational and other
    information included in this prospectus and the Application Forms. By applying to purchase our Offer Shares in this
    Global Offering, you will be deemed to have agreed that you will not rely on any information other than the
    information contained in this prospectus and the Application Forms.
    – 44 –
    RISK FACTORSWAIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULES
    CONNECTED TRANSACTIONS
    Members of our Group have entered into, and are expected to continue after the Listing, certain transactions,
    which will constitute non-exempt continuing connected transactions under the Listing Rules upon Listing. Our
    Company has applied to the Hong Kong Stock Exchange for waivers from strict compliance with the requirements
    regarding the announcements and independent shareholders’ approval in respect of such non-exempt continuing
    connected transactions under Chapter 14A of the Listing Rules. The details of such waivers are set out in the section
    entitled “Connected Transactions” in this prospectus.
    MANAGEMENT PRESENCE
    According to Rule 8.12 and Rule 19A.15 of the Listing Rules, a new applicant applying for a listing on the
    Hong Kong Stock Exchange must have a sufficient management presence in Hong Kong, and this normally means
    that at least two of its executive directors must be ordinarily resident in Hong Kong. Our operations are principally
    in the PRC and substantially all of the Directors currently reside in the PRC. We do not, and for the foreseeable
    future will not, have sufficient management presence in Hong Kong for the purpose of satisfying the requirements
    under Rule 8.12 of the Listing Rules. As a result, we have applied to the Hong Kong Stock Exchange for, and the
    Hong Kong Stock Exchange has granted us, a waiver in connection with Rules 8.12 and 19A.15 of the Listing Rules,
    on the following conditions to ensure that regular and effective communication is maintained between the Hong
    Kong Stock Exchange and us:
    1. We have appointed Wei Hongliang, our executive Director, and Ma Jinru, our company secretary, as
    our authorized representatives (the “Authorized Representatives”) for the purpose of Rule 3.05 of the
    Listing Rules. They will act as our principal channel of communication with the Hong Kong Stock
    Exchange. The Authorized Representatives will provide their usual contact details to the Hong Kong
    Stock Exchange to be readily contactable by the Hong Kong Stock Exchange, and will be available to
    meet with the Hong Kong Stock Exchange to discuss any matters on short notice;
    2. As and when the Hong Kong Stock Exchange wishes to contact the Directors on any matters, each of
    the Authorized Representatives will have means to contact all the Directors (including our independent
    non-executive Directors) promptly at all times.We will implement such measures that (a) each Director
    must provide his mobile phone numbers, office phone numbers, email addresses and fax numbers to the
    Authorized Representatives; and (b) in the event that a Director expects to travel and or otherwise be
    out of office, he will provide the phone number of the place of his accommodation to the Authorized
    Representatives;
    3. We will provide the mobile phone number, the telephone number of the business office, email address
    and fax number of every Director to the Hong Kong Stock Exchange; and
    4. Each of the Directors who is not ordinarily resident in Hong Kong possesses or can apply for valid
    documents to visit Hong Kong and can meet with the Hong Kong Stock Exchange upon reasonable
    notice.
    In compliance with Rule 3A.19 of the Listing Rules, we intend to appoint Taifook Capital Limited as the
    compliance advisor, which will act as our additional channel of communication with the Hong Kong Stock
    Exchange when our Authorized Representatives are not available. The compliance advisor will have access at all
    times to our Authorized Representatives, the Directors and other officers of our Company to ensure that it is in a
    position to provide prompt responses to any queries or requests from the Hong Kong Stock Exchange in respect of
    our Company.
    – 45 –SUBSCRIPTION FOR SHARES BY EXISTING SHAREHOLDERS
    Rule 10.04 of the Listing Rules requires that existing shareholders may only subscribe for securities provided
    no securities will be offered to them on a preferential basis and no preferential treatment will be given to them in the
    allocation of the securities.
    Our Company has applied for, and the Hong Kong Stock Exchange has granted, a waiver from strict
    compliance with Listing Rule 10.04 and the consent under paragraph 5(2) of Appendix 6 to the Listing Rules in
    relation to the placing of our H Shares with our existing A Shareholders or their associates under the International
    Offering.
    The waiver is conditional on each of our A Shareholders placed with our H Shares (i) holding less than 2% of
    our issued A share capital immediately prior to the Global Offering and exerting no influence over our Company;
    (ii) not being and not intending to be a Connected Person of our Company; and (iii) being subject to the same book
    building and allocation process as other investors in the International Offering, and no preferential treatment is
    given to them in the allocation.
    Any placing of our H Shares with our existing A Shareholders will be conducted in accordance with all
    applicable PRC and Hong Kong laws and regulations.
    CLAWBACK MECHANISM
    Paragraph 4.2 of the Practice Note 18 of the Listing Rules requires a clawback mechanism to be put in place,
    which would have the effect of increasing the number of Hong Kong Public Offer Shares to certain percentages of
    the total number of Offer Shares offered in the Global Offering if certain prescribed total demand levels are reached.
    An application has been made for, and the Hong Kong Stock Exchange has granted, a waiver from strict compliance
    with Paragraph 4.2 of Practice Note 18 of the Listing Rules such that the allocation of the Offer Shares between the
    Hong Kong Public Offering and the International Offering is subject to the following adjustments:
    k If the number of the Offer Shares validly applied for under the Hong Kong Public Offering represents ten
    times or more but less than 40 times the number of the Offer Shares initially available for subscription
    under the Hong Kong Public Offering, then Offer Shares will be reallocated to the Hong Kong Public
    Offering from the International Offering, so that the total number of the Offer Shares available under the
    Hong Kong Public Offering will be 59,294,400 Offer Shares, representing 15% of the Offer Shares
    initially available under the Global Offering;
    k If the number of the Offer Shares validly applied for under the Hong Kong Public Offering represents 40
    times or more but less than 50 times the number of the Offer Shares initially available for subscription
    under the Hong Kong Public Offering, then the number of Offer Shares to be reallocated to the Hong
    Kong Public Offering from the International Offering will be increased so that the total number of the
    Offer Shares available under the Hong Kong Public Offering will be 79,058,800 Offer Shares,
    representing 20% of the Offer Shares initially available under the Global Offering; and
    k If the number of the Offer Shares validly applied for under the Hong Kong Public Offering represents
    50 times or more the number of the Offer Shares initially available for subscription under the Hong Kong
    Public Offering, then the number of Offer Shares to be reallocated to the Hong Kong Public Offering
    from the International Offering will be increased, so that the total number of the Offer Shares available
    under the Hong Kong Public Offering will be 118,588,400 Offer Shares, representing 30% of the Offer
    Shares initially available under the Global Offering.
    – 46 –
    WAIVERS FROM STRICT COMPLIANCE WITH THE LISTING RULESINFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
    DIRECTORS’ RESPONSIBILITY FOR THE CONTENTS IN THIS PROSPECTUS
    This prospectus, for which the Directors collectively and individually accept full responsibility, includes
    particulars given in compliance with the PRC Company Law, the Companies Ordinance, the Securities and Futures
    (Stock Market Listing) Rules and the Listing Rules for the purposes of giving information to the public with regard
    to us. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the
    information contained in this prospectus is accurate and complete in all material respects and not misleading or
    deceptive, and there are no other matters the omission of which would make any statement in this prospectus or this
    prospectus misleading.
    CSRC APPROVAL
    CSRC has given its approval for the Global Offering and the making of an application by us to list the H
    Shares on the Hong Kong Stock Exchange on May 11, 2010. In granting such approval, CSRC accepts no
    responsibility for our financial soundness nor the accuracy of any of the statements made or opinions expressed in
    this prospectus or the Application Forms. No other approvals are required to be obtained for the listing of the
    H Shares on the Hong Kong Stock Exchange.
    THE HONG KONG PUBLIC OFFERING AND THIS PROSPECTUS
    This prospectus is published solely in connection with the Hong Kong Public Offering. For applicants under
    the Hong Kong Public Offering, this prospectus and the Application Forms set out the terms and conditions of the
    Hong Kong Public Offering.
    Neither the delivery of this prospectus nor any subscription or acquisition made under it shall, under any
    circumstances, create any implication that there has been no change in our affairs since the date of this prospectus or
    that the information in it is correct as at any subsequent time.
    UNDERWRITING
    For applicants under the Hong Kong Public Offering, this prospectus and the related Application Forms
    contain the terms and conditions of the Hong Kong Public Offering. The Global Offering comprises the Hong Kong
    Public Offering of initially 39,529,600 H Shares and the International Offering of initially 355,764,400 H Shares
    (subject, in each case, to reallocation on the basis described in the section entitled “Structure of the Global Offering”
    in this prospectus).
    The Listing is sponsored by China International Capital Corporation Hong Kong Securities Limited,
    Citigroup Global Markets Asia Limited and Hai Tong Capital (HK) Limited. The Hong Kong Public Offering
    is fully underwritten by the Hong Kong Underwriters under the terms of the Hong Kong Underwriting Agreement,
    subject to the agreement on the Offer Price between the Joint Bookrunners (on behalf of the Underwriters) and us on
    the Price Determination Date. The Global Offering is managed by the Joint Lead Managers. For further details of
    the Underwriters and the underwriting arrangements, please see the section entitled “Underwriting —
    Underwriting arrangements and expenses” in this prospectus.
    DETERMINATION OF THE OFFER PRICE
    The Offer Shares are being offered at the Offer Price which is expected to be determined by the Joint
    Bookrunners (on behalf of the Underwriters) and us on or around June 12, 2010, or such later date as may be agreed
    between the Joint Bookrunners (on behalf of the Underwriters) and us.
    – 47 –If the Joint Bookrunners (on behalf of the Underwriters) and us are unable to reach an agreement on
    the Offer Price on or before June 20, 2010, the Global Offering will not become unconditional and will lapse.
    SELLING RESTRICTIONS
    No action has been taken to permit a Hong Kong Public Offering of the Offer Shares or the general
    distribution of this prospectus and/or the related Application Forms in any jurisdiction other than Hong Kong.
    Accordingly, this prospectus may not be used for the purposes of, and does not constitute, an offer or invitation in
    any jurisdiction or in any circumstances in which such an offer or invitation is not authorized or to any person to
    whom it is unlawful to make such an offer or invitation. The distribution of this prospectus and the offering and sales
    of the Offer Shares in other jurisdictions are subject to restrictions and may not be made except as permitted under
    the applicable securities laws of such jurisdictions pursuant to registration with or authorization by the relevant
    securities regulatory authorities or an exemption therefrom. Each person acquiring the Hong Kong Public Offer
    Shares under the Hong Kong Public Offering will be required to confirm, or be deemed by his acquisition of Hong
    Kong Public Offer Shares to confirm, that he is aware of the restrictions on offers and sales of the Offer Shares
    described in this prospectus. In particular, the Offer Shares have not been offered or sold, and will not be offered or
    sold, directly or indirectly, in the PRC.
    The Offer Shares are offered for subscription solely on the basis of the information contained and
    representations made in this prospectus and related Application Forms, and on the terms and subject to the
    conditions set out herein and therein. No person is authorized in connection with the Global Offering to give any
    information, or to make any representation, not contained in this prospectus, and any information or representation
    not contained in this prospectus must not be relied upon as having been authorized by our Company, the Joint Global
    Coordinators, the Underwriters, any of their respective directors or any other persons or parties involved in the
    Global Offering. For further details of the structure of the Global Offering, including its conditions, and the
    procedures for applying for Hong Kong Public Offer Shares, please see the sections entitled “Structure of the Global
    Offering” and “How to Apply for the Hong Kong Public Offer Shares” in this prospectus and the relevant
    Application Forms.
    APPLICATION FOR LISTING ON THE HONG KONG STOCK EXCHANGE
    We have applied to the Listing Committee of the Hong Kong Stock Exchange for the listing of, and
    permission to deal in, the H Shares including any H Shares which may be issued by us pursuant to the Global
    Offering and upon the exercise of the Over-allotment Option. Except for the A Shares of our Company that have
    been listed on the SZSE and our pending application to the Hong Kong Stock Exchange for the listing of, and
    permission to deal in, the H Shares, no other part of our share or loan capital is listed on or dealt in on any other stock
    exchange and no such listing or permission to list is being or proposed to be sought in the near future.
    HONG KONG H SHARE REGISTER AND STAMP DUTY
    All H Shares issued pursuant to applications made in the Hong Kong Public Offering and the International
    Offering will be registered on our H Share register of members to be maintained in Hong Kong. Our register of
    members will also be maintained by us at our legal address in the PRC.
    Dealings in H Shares registered in our H Share register in Hong Kong will be subject to Hong Kong stamp
    duty.
    – 48 –
    INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERINGUnless determined otherwise by us, dividends payable in Hong Kong dollars in respect of H Shares will be
    paid to the Shareholders listed on our H Share register in Hong Kong, by ordinary post, at the Shareholders’ risk, to
    the registered address of each Shareholder.
    H SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS
    Subject to the granting of listing of, and permission to deal in, the H Shares on the Hong Kong Stock
    Exchange and our compliance with the stock admission requirements of HKSCC, the H Shares will be accepted as
    eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the date of
    commencement of dealings in the H Shares on the Hong Kong Stock Exchange or any other date as HKSCC may
    choose. Settlement of transactions between participants of the Hong Kong Stock Exchange is required to take place
    in CCASS on the second business day after any trading day. All activities under CCASS are subject to the General
    Rules of CCASS and CCASS Operational Procedures in effect from time to time. All necessary arrangements have
    been made for the H Shares to be admitted into CCASS.
    REGISTRATION OF SUBSCRIPTION, PURCHASE AND TRANSFER OF H SHARES
    We have instructed our H Share Registrar, and our H Share Registrar has agreed, not to register the
    subscription, purchase or transfer of any H Shares in the name of any particular holder unless and until such holder
    delivers to such H Share Registrar a signed form in respect of such H Shares bearing statements to the effect that the
    holder of the H Shares:
    (i) agrees with us and each of the Shareholders, and we agree with each of the Shareholders, to observe and
    comply with the PRC Company Law, the Special Regulations and the Articles of Association;
    (ii) agrees with us, each of our Shareholders, Directors, Supervisors, managers and officers, and we acting
    for ourselves and for each of our Directors, Supervisors, managers and officers agree with each of the
    H Shareholders, to refer all differences and claims arising from the Articles of Association or any rights
    or obligations conferred or imposed by the PRC Company Law or other relevant laws and
    administrative regulations concerning our affairs to arbitration in accordance with the Articles of
    Association, and any reference to arbitration shall be deemed to authorize the arbitration tribunal to
    conduct hearings in open session and to publish its award. Such arbitration shall be final and
    conclusive. Please see the appendices entitled “Appendix VII —Summary of Principal Legal and
    Regulatory Provisions” and “Appendix VIII —Summary of the Articles of Association” to this
    prospectus;
    (iii) agrees with us and each of the Shareholders that the H Shares are freely transferable by the holders
    thereof; and
    (iv) authorizes us to enter into a contract on his behalf with each of the Directors and officers whereby each
    such Director and officer undertakes to observe and comply with his obligation to the Shareholders as
    stipulated in the Articles of Association.
    PROFESSIONAL TAX ADVICE RECOMMENDED
    Applicants for the Offer Shares are recommended to consult their professional advisors if they are in any
    doubt as to the taxation implications of holding and dealing in the H Shares. It is emphasized that none of our
    Company, the Joint Bookrunners, the Underwriters, the Joint Sponsors, or the Joint Lead Managers, any of our or
    their respective directors, supervisors, officers, affiliates, agents or advisors or any other person involved in the
    – 49 –
    INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERINGGlobal Offering accepts responsibility for any tax effects or liabilities of holders of H Shares resulting from the
    subscription, purchase, holding or disposal of H Shares or the exercise of any rights attaching to H Shares.
    PROCEDURES FOR APPLICATION FOR HONG KONG PUBLIC OFFER SHARES
    The procedure for applying for Hong Kong Public Offer Shares is set out in the section entitled “How to
    Apply for Hong Kong Public Offer Shares” in this prospectus and in the Application Forms.
    OVER-ALLOTMENT AND STABILIZATION
    In connection with the Global Offering, Citigroup Global Markets Asia Limited, as stabilizing manager
    (“Stabilizing Manager”) or any person acting for it may over-allot or effect transactions with a view to prevent a
    decline in the market price of the H Shares for a limited period after the Listing Date. However, there is no
    obligation on the Stabilizing Manager or any person acting for it to do this. Such stabilization action, if taken, may
    be discontinued at any time and is required to be brought to an end after a limited period. In Hong Kong and certain
    other jurisdictions, activity aimed at reducing the market price is prohibited, and the price at which stabilization is
    effected is not permitted to exceed the Offer Price. Further details with respect to stabilization and the Overallotment
    Option are set out in the section entitled “Underwriting” in this prospectus.
    STRUCTURE OF THE GLOBAL OFFERING
    Details of the structure of the Global Offering, including its conditions, are set out in the section entitled
    “Structure of the Global Offering” in this prospectus.
    EXCHANGE RATE CONVERSION
    Solely for your convenience and information only, this prospectus contains translations of certain RMB
    amounts into Hong Kong dollars as well as RMB amounts and Hong Kong dollar amounts into U.S. dollars at
    specified rates. Unless otherwise stated or for transactions that have occurred at historical exchange rates, RMB
    amounts have been translated into Hong Kong dollars at the rate of RMB0.8772 to HK$1.00 and RMB amounts
    have been translated into U.S. dollars at the rate of RMB6.8281 to US$1.00, each of which was the PBOC Rate
    prevailing on the Latest Practicable Date. Any discrepancy in any table between totals and sums of amounts listed
    therein are due to rounding. No representation is made that any amounts in RMB, U.S. dollars or Hong Kong dollars
    can be or could have been at the relevant dates converted at the above rates or any other rates or at all on the date or
    dates in question or any other date.
    – 50 –
    INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERINGDIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
    DIRECTORS
    Name Residential Address Nationality
    Executive Directors
    Wu Gang ( ) No. 16
    Karamy West Road
    Saybag District
    Urumqi, Xinjiang
    PRC
    Chinese
    Guo Jian ( ) No. 1
    East Second Street Alley
    Saybag District
    Urumqi, Xinjiang
    PRC
    Chinese
    Wei Hongliang ( ) Room 308, No. 12
    Second Lane, Baiguang Road
    Xuanwu District
    Beijing
    PRC
    Chinese
    Non-executive Directors
    Li Ying ( ) Jia No. 1
    Fu Xing Road
    Haidian District
    Beijing
    PRC
    Chinese
    Gao Zhong ( ) Building 145
    Hot Spring West Road
    Shui Mogou District
    Urumqi, Xinjiang
    PRC
    Chinese
    Lv Houjun ( ) No. 60138
    Qing Xi Road
    Changning District
    Shanghai
    PRC
    Chinese
    Independent non-executive Directors
    Wang Yousan ( ) No. 6
    Zhong Shan Road
    Urumqi, Xinjiang
    PRC
    Chinese
    Shi Pengfei ( ) No. 118
    Hui Zhong Bei Li
    Chaoyang District
    Beijing
    PRC
    Chinese
    – 51 –Name Residential Address Nationality
    Li Man Bun, Brian David ( ) Grenville House
    No. 1-3
    Magazine Gap Road
    Hong Kong
    Chinese
    (Hong Kong)
    SUPERVISORS
    Name Residential Address Nationality
    Wang Mengqiu ( ) No. 155
    Dong Si Wu Tiao
    Dongcheng District
    Beijing
    PRC
    Chinese
    Wang Shiwei ( ) No. 82
    Yangtze Road
    Saybag District
    Urumqi, Xinjiang
    PRC
    Chinese
    Luo Jun ( ) Hui Huang Subdistrict
    Huang He Market Alley
    Urumqi, Xinjiang
    PRC
    Chinese
    Xiao Zhiping ( ) Yangtze Road
    Saybag District
    Urumqi, Xinjiang
    PRC
    Chinese
    Zheng Chengjiang ( ) No. 320
    Jian Kang North Road
    Miquan, Xinjiang
    PRC
    Chinese
    – 52 –
    DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERINGPARTIES INVOLVED
    Joint Global Coordinators China International Capital Corporation Hong Kong
    Securities Limited
    29/F, One International Finance Centre
    1 Harbour View Street
    Central, Hong Kong
    Citigroup Global Markets Asia Limited
    50/F, Citibank Tower
    3 Garden Road
    Central, Hong Kong
    Joint Bookrunners China International Capital Corporation Hong Kong
    Securities Limited
    29/F, One International Finance Centre
    1 Harbour View Street
    Central, Hong Kong
    Citigroup Global Markets Asia Limited
    50/F, Citibank Tower
    3 Garden Road
    Central, Hong Kong
    Credit Suisse (Hong Kong) Limited
    45th Floor, Two Exchange Square
    8 Connaught Place
    Central, Hong Kong
    Joint Sponsors China International Capital Corporation Hong Kong
    Securities Limited
    29/F, One International Finance Centre
    1 Harbour View Street
    Central, Hong Kong
    Citigroup Global Markets Asia Limited
    50/F, Citibank Tower
    3 Garden Road
    Central, Hong Kong
    Hai Tong Capital (HK) Limited
    21/F, Li Po Chun Chambers
    189 Des Voeux Road Central
    Central, Hong Kong
    Joint Lead Managers China International Capital Corporation Hong Kong
    Securities Limited
    29/F, One International Finance Centre
    1 Harbour View Street
    Central, Hong Kong
    Citigroup Global Markets Asia Limited
    50/F, Citibank Tower
    3 Garden Road
    Central, Hong Kong
    – 53 –
    DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERINGTaifook Securities Company Limited
    25/F, New World Tower
    16-18 Queen’s Road Central
    Hong Kong
    Credit Suisse (Hong Kong) Limited
    45th Floor, Two Exchange Square
    8 Connaught Place
    Central, Hong Kong
    Global Financial Advisors China International Capital Corporation Hong Kong
    Securities Limited
    29/F, One International Finance Centre
    1 Harbour View Street
    Central, Hong Kong
    CCB International Capital Limited
    34/F, Two Pacific Place
    88 Queensway
    Admiralty, Hong Kong
    PRC Financial Advisor Haitong Securities Co., Ltd.
    Haitong Securities Building
    No. 689, Guangdong Rd.
    Shanghai
    PRC
    Legal Advisors to our Company as to Hong Kong law and United States law:
    DLA Piper Hong Kong
    17/F, Edinburgh Tower
    The Landmark
    15 Queen’s Road
    Hong Kong
    as to PRC law:
    Xinjiang Tianyang Law Firm
    24th, 25th Floor
    Century Prosperous Hotel 36
    South Xinhua Road
    Urumqi, Xinjiang
    PRC
    Legal Advisors to the Joint Sponsors and the
    Underwriters
    as to Hong Kong law and United States law:
    Freshfields Bruckhaus Deringer
    11/F, Two Exchange Square
    Central, Hong Kong
    – 54 –
    DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERINGas to PRC law:
    Jingtian & Gongcheng Attorneys At Law
    34/F, Tower 3, China Central Place
    77 Jianguo Road
    Chaoyang District
    Beijing
    PRC
    Reporting Accountants Ernst & Young
    Certified Public Accountants
    18/F, Two International Finance Centre
    8 Finance Street
    Central, Hong Kong
    Property Valuer Jones Lang LaSalle Sallmanns Limited
    17/F Dorset House, Taikoo Place
    979 King’s Road
    Quarry Bay
    Hong Kong
    Receiving Bankers Bank of China (Hong Kong) Limited
    1 Garden Road
    Central, Hong Kong
    Standard Chartered Bank (Hong Kong) Limited
    15/F, Standard Chartered Tower
    388 Kwun Tong Road
    Kowloon, Hong Kong
    China Construction Bank (Asia) Corporation Limited
    16/F, York House
    The Landmark
    15 Queen’s Road Central
    Central, Hong Kong
    – 55 –
    DIRECTORS, SUPERVISORS AND PARTIES INVOLVED IN THE GLOBAL OFFERINGCORPORATE INFORMATION
    Legal address and head office in the PRC No.107
    Shanghai Road
    Economic & Technology Development District
    Urumqi, Xinjiang
    PRC
    Principal place of business in Hong Kong 17/F, Edinburgh Tower
    The Landmark
    15 Queen’s Road
    Hong Kong
    Company secretary Ma Jinru (Affiliated Person, HKICS)
    Authorized representatives Wei Hongliang (Executive Director)
    Room 308, No. 12
    Second Lane, Baiguang Road
    Xuanwu District
    Beijing
    PRC
    Ma Jinru (Company Secretary)
    No. 19
    Kangding Street
    Yizhuang Economic & Technology Development Zone
    Beijing
    PRC
    Compliance advisor Taifook Capital Limited
    25/F, New World Tower
    16-18 Queen’s Road Central
    Hong Kong
    Nomination Committee Wang Yousan (Chairman)
    Wu Gang
    Shi Pengfei
    Audit Committee Li Man Bun, Brian David (Chairman)
    Wang Yousan
    Gao Zhong
    Remuneration and Appraisal Committee Shi Pengfei (Chairman)
    Wang Yousan
    Li Ying
    Strategy Committee Wu Gang (Chairman)
    Guo Jian
    Wei Hongliang
    Gao Zhong
    Shi Pengfei
    H Share Registrar Computershare Hong Kong Investor Services Limited
    Shops 1712-1716,
    17th Floor, Hopewell Centre,
    183 Queen’s Road East
    Wanchai, Hong Kong
    Website address www.goldwind.cn (contents of this website do not
    form part of this prospectus)
    – 56 –Principal bankers China Construction Bank Corporation
    No. 25
    Finance Street
    Xicheng District
    Beijing
    PRC
    China Development Bank
    No. 29
    Fuchengmenwai Street
    Xicheng District
    Beijing
    PRC
    Bank of China Limited, Xinjiang Branch
    Bank of China Building
    No. 2
    Dongfeng Road
    Urumqi, Xinjiang
    PRC
    Citibank (China) Co. Ltd., Beijing Branch
    16-18F, Excel Center
    No. 6
    Wudinghou Street
    Xicheng District
    Beijing
    PRC
    Deutsche Bank (China) Co., Ltd., Beijing Branch
    27/F, Deutsche Bank Tower
    China Central Place
    No. 81, Jianguo Avenue
    Chaoyang District
    Beijing
    PRC
    Bank of Communications Co., Ltd., Xinjiang Branch
    No. 16
    Dongfeng Road
    Urumqi, Xinjiang
    PRC
    – 57 –
    CORPORATE INFORMATIONINDUSTRY OVERVIEW
    The information presented in this section is derived fromvarious publications. None of these publications
    was commissioned by us or the Joint Sponsors or their respective affiliates or advisors. While reasonable care
    has been taken in the extraction, compilation and reproduction of such information and statistics, neither we,
    the Joint Bookrunners, the Joint Sponsors, or the Underwriters, nor any of their respective affiliates or advisors,
    nor any party involved in the Global Offering have independently verified such information and statistics, and
    such parties do not make any representation as to their correctness, accuracy, completeness or fairness. The
    information in this section may not be consistent with, or may not have been compiled with the same degree of
    accuracy or completeness as, statistical or other information compiled elsewhere. You should not place undue
    reliance on statements herein.
    Power Generation
    The global demand for electricity has increased substantially with the rapid growth of the global economy, in
    particular the economic growth of developing countries and corresponding increases in energy consumption levels.
    According to statistics from the EIA, global power generation volume has increased from 14,848.7 TWh in 2001 to
    18,778.7 TWh in 2007 at a CAGR of 4.0%. Correspondingly, to meet the global demand for power generation, the
    world’s accumulated installed capacity has also increased, from 3,551.4 GW in 2001 to 4,428.4 GW in 2007 at a
    CAGR of 3.7%.
    Similarly, there has been a considerable rise in China’s power generation volume from 1,480.8 TWh in 2001
    to 3,663.9 TWh in 2009 at a CAGR of 12.0% as the development and industrialization of its economy progresses at
    an accelerated pace. To meet the demand for power generation in China, China’s accumulated installed power
    capacity has increased significantly, from 338.6 GW in 2001 to 874.1 GWin 2009 at a CAGR of 12.6%. Although
    the growth rate of China’s power generation volume and installed capacity has been much higher than the world
    average in recent years, as indicated in the following chart, China’s per capita power generation volume is still
    significantly lower than those of developed countries, suggesting its demand for power generation will continue to
    increase.
    Per capita power generation volume of various countries in 2008 (MWh)
    14.0 13.0
    7.7 7.0
    2.6
    United States Australia Germany Spain China
    Source: BP Statistical Review of World Energy 2009, United Nations Population Fund State of World Population 2008
    Renewable Power Generation
    With rising concern over energy shortages, the environmental threat posed by global warming and the
    emission of greenhouse gases, there has been growing pressure in the power generation industry for improved
    energy savings and emission reductions. This has translated into vast growth potential for the renewable power
    generation industry. According to the EIA, global accumulated installed capacity of renewable energy grew from
    – 58 –63.9GWin 2001 to 160.4GWin 2007, at a CAGR of 16.6%, and accounted for 3.6% of global installed capacity of
    all energy sources in 2007 as compared to 1.8% in 2001.
    Renewable energy is a viable alternative capable of meeting the energy needs of the growing Chinese
    economy and its sustained development, especially in view of the rapid depletion of finite conventional energy
    sources such as oil, coal and natural gas. Moreover, the emission of greenhouse gases in the PRC has increased in
    tandem with the rapid growth of its economy. According to the IEA’s World Energy Outlook 2008, China has
    surpassed the United States as the world’s largest source of carbon dioxide emissions from power generation
    through the use of coal, petroleum and natural gases, with 2,829 million tonnes of carbon dioxide emissions in 2006.
    In 2002, China formally ratified the Kyoto Protocol, promulgated a series of laws and regulations since 2005 to
    encourage the development and use of renewable energy, and also pledged on November 26, 2009 to cut its
    greenhouse gas emissions per unit of GDP by 40% to 45% by 2020 compared with 2005 levels. Please see the
    section entitled “Regulations” in this prospectus for further details. According to statistical data from CEIC, China’s
    installed capacity of renewable energy has grown rapidly in recent years at a CAGR of 60.4% between 2001 and
    2009.
    Global Wind Power Generation
    With more mature and reliable technology, and as one of the most price-competitive forms of renewable
    energy, wind power is generally perceived as having the greatest commercial value among renewable energy
    sources and is being vigorously promoted by various governments. For instance, in the United States, under its
    American Recovery and Reinvestment Act of 2009, up to US$93.0 million in incentives for wind energy has been
    set aside in the form of grants, loan guarantees and tax incentives.
    Accumulated installed wind power capacity registered rapid growth from 24.9 GW in 2001 to 160.1 GW in
    2009 at a CAGR of 26.2% according to statistics from BTM(1), whereas newly installed wind power capacity
    increased to 38.1 GW in 2009, a growth of 35.2% over the previous year. It is further estimated that installed wind
    power capacity will continue to grow rapidly in the future and the CAGR of the accumulated installed wind power
    capacity and newly installed wind power capacity will be 22.8% and 13.5% respectively, from 2009 to 2014.
    – 59 –
    INDUSTRY OVERVIEW
    (1) Founded in 1986, BTM is a private independent consultancy company based in Denmark and specializing in renewable energy, including
    wind energy. BTM states on its website that its staff has been working with wind energy utilization since 1979. Services provided by BTM
    include market assessment and business development, appraisal and due diligence investigations. It has published, among other things,
    InternationalWind Energy Development -World Market Update, a non-governmental publication, on an annual basis since 1995, which contains
    statistics and market updates regarding the global wind energy industry. Neither the Directors nor the Joint Sponsors commissioned BTM to
    prepare any research report and BTM is an Independent Third Party of our Group.The following charts show the growth of the accumulated global installed wind power capacity and newly
    installed wind power capacity from 2001 to 2009 as well as the estimated accumulated installed wind power
    capacity and newly installed wind power capacity in 2014.
    Accumulated global installed wind power capacity
    (MW)
    Newly installed global wind power capacity
    (MW)
    MW
    24,927 32,037 40,301 47,912
    59,399
    74,306
    94,005
    122,158
    447,689
    2001 2002 2003 2004 2005 2006 2007 2008 2014E
    160,084
    2009
    MW
    6,824 7,227 8,344 8,154
    11,542
    15,016
    19,791
    28,190
    71,650
    2001 2002 2003 2004 2005 2006 2007 2008 2014E
    38,103
    2009
    Note: The difference between the accumulated global installed wind power capacity for any two consecutive years is not equal to the newly
    installed global wind power capacity for the more recent of the same two years because some of the already installed WTGs were
    decommissioned.
    Source: BTM
    According to theWorld Meteorological Organization and the Chinese Academy of Meteorological Sciences,
    there is approximately 20,000 GWof wind energy resources globally available for use. Much of these wind energy
    resources are distributed across the northern and western coastal areas of Europe and parts of the Mediterranean
    Sea, East Asia and certain parts of the interior, northern and western coastal areas in Africa, the western and
    southern coastal areas in Australia, the coastal and certain interior areas in North America, especially the mountain
    areas, as well as the southern portion of South America. According to BTM, the top five wind power markets in
    2009 based on accumulated installed capacity were the United States, China, Germany, Spain and India, and growth
    in the global accumulated installed wind power capacity is expected to come primarily from China and the United
    States. It is estimated that the CAGR of the accumulated installed wind power capacity of these two countries will
    reach 32.3% and 23.3%, respectively, from 2009 to 2014, while installed wind power capacity in Europe will
    continue to grow, but at a slower rate. The following chart shows the accumulated installed wind power capacity of
    these top five wind power markets and their estimated accumulated installed wind power capacity by 2014 and the
    CAGR for 2009 to 2014.
    Accumulated installed wind power capacity in 2009 and 2014 (MW)
    2009 2014E 2009-2014E CAGR
    China U.S. India Spain Germany
    104,853 100,159
    35,159 27,327 29,784
    10,827 18,784 25,813
    32.3%
    23.3%
    20.3%
    9.7% 8.7%
    25,853
    39,213
    Source: BTM
    – 60 –
    INDUSTRY OVERVIEWWind Power Generation in China
    The wind power industry in the PRC has grown more rapidly than most other forms of renewable energy in
    recent years. According to the CEIC, as of December 31, 2009, wind power accounted for more than 99% of the
    accumulated installed capacity of renewable energy in the PRC. China also became the world’s largest wind power
    market in 2009 in terms of newly installed wind power capacity with 13.8 GW, and electricity generated from wind
    power accounted for 0.7% of total electricity generated in China.
    Despite such high growth rates, according to the EIA and BTM, China’s installed wind power capacity
    accounted for only 0.8% of China’s accumulated installed capacity in 2007, significantly less than the 16.8%,
    16.6% and 1.7% of Germany, Spain and the United States, respectively. Historically, China has exceeded installed
    wind power capacity targets set by its government on numerous occasions. For example, the PRC Government
    established a wind power development plan in accordance with the 11th Five-Year Plan for Renewable Energy
    issued by the NDRC with a target accumulated installed wind power capacity of 10 GW by the end of 2010, but in
    fact, China’s accumulated installed wind power capacity exceeded 12.1GWby the end of 2008. According to BTM,
    China’s accumulated installed wind power capacity is expected to grow more than four-fold from 2009 to 2014,
    representing a CAGR of 32.3%. Moreover, the Chinese Wind Energy Association(1) forecasted that China’s
    accumulated installed wind power capacity will grow almost ten-fold from 2009 to 2020, reaching 247.8 GW in
    2020, representing a CAGR of 22.8%. Even though industry reports have made positive forecasts on the Chinese
    wind power market, the Chinese wind power market has repeatedly out-performed forecasts. For example, in March
    2008, BTM forecasted China’s newly installed wind power capacity in 2008 would be 5.5GW, but the actual newly
    installed wind power capacity was 6.2 GW; in March 2009, BTM forecasted China’s newly installed wind power
    capacity in 2009 would be 7.3 GW, but the actual newly installed wind power capacity was 13.8 GW.
    The following charts show China’s accumulated installed wind power capacity and newly installed wind
    power capacity from 2001 to 2009 and estimated accumulated installed wind power capacity and newly installed
    wind power capacity by 2014.
    China’s accumulated installed wind power capacity
    (MW)
    China’s newly installed wind power capacity
    (MW)
    MW
    406 473 571 769 1,264 2,588
    5,875
    12,121
    104,853
    2001 2002 2003 2004 2005 2006 2007 2008 2014E
    25,853
    2009
    54 67 98 198 498
    1,334
    3,287
    6,246
    18,000
    2001 2002 2003 2004 2005 2006 2007 2008 2014E
    MW
    13,750
    2009
    Source: BTM
    – 61 –
    INDUSTRY OVERVIEW
    (1) Our independent non-executive Director, Mr. Shi Pengfei is the vice chairman of the Chinese Wind Energy Association. Neither our Group
    nor the Joint Sponsors commissioned the ChineseWind Energy Association nor Mr. Shi Pengfei to prepare any research report and the Chinese
    Wind Energy Association is an Independent Third Party of our Group.China possesses abundant wind energy resources. According to the assessment results of the United Nations
    Environment Program, China has technically feasible wind power resources of 3,000 GWand BTM estimated that
    wind energy will be the third largest energy source for power generation by 2030, after coal and hydropower.
    China’s wind energy resources are distributed extensively throughout the north of China as well as the coastal and
    island areas of China. According to statistics published by the ChineseWind Energy Association, the top five wind
    power markets in 2009 based on accumulated installed wind power capacity were Inner Mongolia, Hebei, Liaoning,
    Jilin and Heilongjiang, with 9,196.2 MW, 2,788.1 MW, 2,425.3 MW, 2,063.9 MWand 1,659.8 MW, respectively.
    The following map shows the distribution of wind energy resources in the PRC.
    Distribution of wind energy resources in China
    Note: Wind Power Density refers to the amount energy available at the site for conversion by a wind turbine and is measured in watts per
    square meter.
    Source: Chinese Academy of Meteorological Sciences
    In 2009, the NDRC classified the country into four categories of wind energy resource areas in the National
    Wind Power Generation Benchmark On-Grid Tariffs Schedule. Different benchmark power tariffs apply to each
    category to ensure adequate investment return for wind power investors, therefore it is estimated that this policy will
    effectively promote the rapid growth of newly installed wind power capacity in areas with poorer wind energy
    resources and construction conditions.
    – 62 –
    INDUSTRY OVERVIEWGrowth Drivers of the Global Wind Power Industry
    We believe that the following growth drivers will facilitate the development of the global wind power
    industry, thereby increasing the demand for our products and services:
    Energy independence and security considerations Increased concern about energy security and energy
    independence are pushing countries, particularly those with insufficient conventional energy resources, towards
    renewable energy sources which provide a local and secure supply and reduce risk of volatility in prices of
    conventional energy sources.
    Environmental concerns There is growing awareness of environmental protection issues and greenhouse gas
    emissions from the use of fossil energy. As one of the lowest greenhouse gas emission producing alternative energy
    sources and being relatively easy to develop on a large-scale basis, wind power has garnered widespread support.
    Rising global energy demand and increasing costs of fossil fuels Statistics published by the EIA have shown
    that future economic growth and an increase in energy consumption will lead to greater global demand for energy.
    This is expected to reduce the supplies of and eventually exhaust finite fossil fuel sources such as coal, petroleum
    and natural gas, resulting in price hikes. Countries are turning to renewable energy to mitigate these pressures and
    limit their impact.
    Governmental support for renewable energy and wind power Countries have enacted financial policies such
    as preferential tax rates and feed-in tariffs to encourage the development of renewable energy, in particular wind
    power. In addition, wind energy provides support to the pursuit of sustained economic development and creates
    employment opportunities for the local population.
    Cost advantages of wind power The cost of wind power is, to a substantial extent, lower than that of other
    forms of renewable energy, and under certain circumstances, gradually becoming cost competitive with
    conventional energy sources. Moreover, factors such as expansion in the scale of wind farm projects,
    technological advancements which improve the efficiency and availability of wind power equipment, greater
    economies of scale in the production of wind power equipment as well as more low cost financing opportunities for
    wind farm projects are expected to further reduce the cost of wind power.
    Technological advancements in wind power Investments in the R&D of wind power have resulted in major
    technological breakthroughs. Future wind power technological advancements will continue to improve the
    performance of wind power equipment while reducing the cost of wind power, thereby allowing greater
    development of global wind energy resources.
    Growth Drivers of the PRC Wind Power Industry
    In addition to the above main growth drivers of the global wind power industry, primary factors driving the
    growth of wind power generation in China include:
    Policy requirements China has implemented a series of wind power policies which have sped up the
    development of the wind power industry, including a target of having 3% and 8% of attributable installed capacity of
    renewable power generation by power producers with attributable installed capacity of over 5 GW by 2010 and
    2020, respectively. Please see the section entitled “Regulations —Overall Industry Regulation Planning and
    Guidance” in this prospectus for more details. Investment in wind power has consequently increased to better meet
    these new requirements.
    – 63 –
    INDUSTRY OVERVIEWPreferential support The PRC Government has launched a series of favorable policies for wind power
    including preferential tax rates, on-grid benchmark tariffs, facilitating bank loans, investment in R&D and
    stipulating that Chinese power grids must purchase all the power generated from renewable energy and
    construct infrastructure for transmission and distribution of such power. Please see the section entitled
    “Regulations” in this prospectus. Those favorable policies encourage strategic and financial investors to invest
    in wind farms, which could generate attractive returns.
    Improvements in grid infrastructure The PRC Government and state-owned grids have implemented several
    measures and indicated plans to significantly invest in the construction of ultra high voltage transmission
    infrastructure, and a smart grid featuring distributed power supply and storage. Such measures will help
    address the grid connectivity bottleneck currently faced by the wind power industry.
    Better ability to exploit wind resources Potential wind farm projects have recently been identified in China’s
    inland provinces such as Jiangxi, Henan, Shanxi and Shaanxi, and these areas have consequently become emerging
    markets for the wind power industry.With a better ability to exploit wind resources, more areas for development are
    expected to be identified in China.
    Wind Power Value Chain
    The wind power value chain consists of parts and components suppliers,WTGdesign houses,WTGsuppliers,
    operation and management service providers, wind farm project consultants, construction contractors as well as
    wind farm investors and developers. The following diagram illustrates the value chain of the wind power industry.
    Value chain of the wind power industry
    Parts & Components
    Supplier
    WTG Design House
    Wind Farm Project
    Consultant
    Operation
    Management Service
    Provider
    WTG Supplier Construction Contractor
    Wind Farm Investor / Developer
    – 64 –
    INDUSTRY OVERVIEWGlobal WTG Manufacturing Industry
    Competitive Landscape
    Presently, the global WTG manufacturing industry features a high degree of concentration. According to
    BTM, in 2009, the top ten WTG manufacturers accounted for the vast majority of the global newly installed wind
    power capacity. In addition, with the rapid development of the wind power market in China, three Chinese WTG
    manufacturers, namely our Group, SinovelWind Group Co., Ltd.(1) and Dongfang Electric Co., Ltd.(2), are among
    the list of the world’s top ten WTG manufacturers, as shown in the chart below:
    The top ten WTG manufacturers in 2009
    Sinovel, 9.2%
    Goldwind, 7.2%
    Dongfang, 6.5%
    REpower, 3.4%
    Suzlon, 6.4%
    Siemens, 5.9%
    Enercon, 8.5%
    Gamesa, 6.7%
    GE Wind, 12.4%
    Vestas, 12.5%
    Others, 18.5%
    Note: Each of the above percentages is calculated by dividing the new capacity sold by the respective manufacturer in 2009 by the newly
    installed capacity in the industry in 2009, and the sum of the above percentages is less than 100%.
    Source: BTM
    WTG Product Mix
    WTGs can be categorized by their unit capacity or by their ultimate installation location (onshore and
    offshore). Recent WTG technology trends have included increasing unit capacity of WTGs and more installations
    of offshore WTGs.
    – 65 –
    INDUSTRY OVERVIEW
    (1) SinovelWind Group Co., Ltd. is a PRC manufacturer of wind power generation equipment and principally engaged in the production and sales
    of WTGs.
    (2) Dongfang Electric Co., Ltd. is a PRC company whose business includes production and sales of hydropower, thermo power, nuclear power
    and wind power generation equipment.According to BTM, the average unit capacity of newly installed WTGs globally exceeded 1.6 MW in 2009
    and WTGs with unit capacity of over 1.5 MW accounted for 86.9% of the newly installed capacity in 2009, an
    increase of 17.9 percentage points from 2007. The following chart provides a breakdown of the newly installed
    capacity of WTGs globally by unit capacity for 2007, 2008 and 2009.
    Newly Installed Capacity of WTGs Globally by Unit Capacity
    29.8%
    1.3%
    63.7%
    5.3%
    2007
    Unit capacity below 750 kW Unit capacity between 750 kW and 1499 kW
    Unit capacity btween 1.5 MW and 2.5 MW Unit capacity above 2.5 MW
    0.5%
    13.1%
    80.4%
    6.0%
    2008
    1.1%
    12.0%
    81.8%
    5.1%
    2009
    Source: BTM
    BTM has also indicated that new installations of offshore WTGs are expected to increase significantly
    between 2010 and 2014, with annual newly installed capacity reaching 1,374 MW, 1,418 MW, 3,525 MW,
    3,216MWand 3,955MW, accounting for 3.3%, 2.9%, 5.9%, 4.9% and 5.5% of the annual newly installed capacity
    globally, respectively.
    WTG Technology Evolution
    With the continued increase in unit capacity, WTG technology has evolved substantially as indicated in the
    chart below, from stall regulated to pitch regulated from constant speed to variable speed, and from gearbox drive to
    gearless direct-drive technology, with a resulting increase in efficiency and reliability and lower maintenance costs.
    According to BTM, gearless direct-drive WTGs account for 13.9% of the global newly installed capacity in 2009,
    an increase of 2 percentage points from 2008.
    Limited Variable Speed
    Gearbox
    Pitch Regulated
    Stall Regulated
    Constant Speed
    Active Stall
    Variable Speed
    Gearless direct-drive
    Global WTG Technology Trends
    Time
    Source: European Wind Energy Association Wind Energy — The Facts (March 2009)
    – 66 –
    INDUSTRY OVERVIEWSupply Chain of Key Components
    Atypical WTGconsists of approximately 8,000 parts and components.WTGmanufacturers generally choose
    to purchase such parts and components from external suppliers or manufacture components in-house. Core parts
    and components of WTGs include:
    Blade Blades may be purchased or manufactured in-house by WTG manufacturers.
    Control system The control system usually consists of a converter system, a variable pitch system and a
    master control system and is generally manufactured in-house by WTG manufacturers.
    Generator The wind power generator is mostly manufactured by large generator manufacturers.
    Drive train system The drive train system mainly consists of the gearbox, bearings, a wheel hub and a spindle
    and is generally outsourced.
    Tower The tower is usually manufactured locally in close proximity to the project site.
    China’s WTG Manufacturing Industry
    Competitive Landscape
    Compared to Europe and North America, the PRC wind power industry is relatively new and Chinese WTG
    manufacturers generally chose to acquire foreign WTG technologies through licensing or the establishment of joint
    ventures. In 2005, the PRC Government introduced the requirement that at least 70% of the wind turbine
    components (by purchase value) are to be domestically manufactured (repealed in 2009) and this played a
    large role in promoting the initial development of the PRC wind power equipment manufacturing industry.With the
    gradual growth of the domestic manufacturers, they have managed to be more cost-competitive and are now able to
    supply auxiliary parts and components in a timely manner and offer localized after-sales services, resulting in a
    steady growth in their market share compared to foreign competitors. According to BTM, WTGs manufactured by
    domestic and Sino-foreign joint venture suppliers had already accounted for 87.7% of China’s newly installed wind
    power capacity in 2009. The following chart shows the market share of Chinese WTG manufacturers from 2004 to
    2009.
    Market Share of WTG Manufacturers in the PRC
    2004 2005 2006 2007 2008 2009
    Foreign Suppliers Domestic and Sino-foreign Joint Venture Suppliers
    57.5%
    75.0% 87.7%
    45.0%
    21.1% 27.7%
    78.9% 72.3%
    55.0% 42.5%
    25.0%
    12.3%
    Source: BTM
    Currently, there is a relatively high concentration of PRC WTG manufacturers. According to statistics
    published by the Chinese Wind Energy Association, the five largest WTG manufacturers in the PRC in terms of
    – 67 –
    INDUSTRY OVERVIEWaccumulated installed capacity as of December 31, 2009 were SinovelWind Group Co., Ltd., our Group, Dongfang
    Electric Co., Ltd, VestasWind Systems A/S(1) and Gamesa Corporación Tecnológica, S.A.(2)with a market share of
    21.9%, 20.7%, 12.9%, 7.8% and 7.1%, respectively.
    The investment cost for a wind farm project is not only determined by the price of WTGs but also that of
    ancillary equipment as well as construction, operation and maintenance costs. As WTGs have a 20-year lifespan
    and operate outdoors year-round, PRC wind farm investors and developers often consider the efficiency, reliability
    and maintenance costs of WTGs and the quality of after-sales services in addition to price before making a
    purchase. Therefore, those WTG manufacturers that are able to offer highly reliable WTG products with effective
    designs at lower production costs have a competitive advantage in the PRC market.
    WTG Product Mix and Technological Trends
    According to statistics published by BTM, the average unit capacity of newly installed WTGs in China has
    grown from 726 kW in 2003 to 1,360 kW in 2009, representing an increase of over 80%. In terms of accumulated
    installed capacity, the average unit capacity of WTGs in China has grown from 539 kW in 2003 to 1,170 kW in
    2009, representing an increase of over 100%, showing a clear trend towards larger-sized units. Among WTG
    models, 1.5 MW WTGs constitute the largest segment in China and the following chart shows the market share of
    the 1.5 MW WTGs from 2005 to 2009.
    Market Share of WTGs with 1.5 MW Unit Capacity in the PRC
    20.4%
    2005 2006 2007 2008 2009
    23.3%
    39.5%
    58.8%
    73.8%
    Source: Chinese Wind Energy Association
    In November 2007, Asia’s first offshore 1.5 MW direct-drive permanent magnet WTG, which was
    manufactured by us, was installed in Bohai Bay, PRC. With growing attention paid to offshore wind resources,
    an increasing number of Chinese WTG manufacturers are expected to manufacture offshore WTG products.
    According to the Chinese Wind Energy Association, China’s newly installed capacity of offshore WTGs, will be
    114 MW, 215 MW, 260 MW, 380 MW, 700 MWand 1000 MW from 2010 to 2015, respectively, representing a
    CAGR of 54.4%.
    Prior to 2008, WTGs installed in China mainly adopted the gearbox-driven technology. However, as the
    advantages of gearless direct-drive WTGs have been gradually recognized by Chinese wind power investors, the
    proportion of installed capacity of WTGs adopting the direct-drive technology has been increasing. According to
    the ChineseWind Energy Association, the market share of direct-drive WTGs in China grew from 0.2% in 2005 to
    17.5% in 2009, and it was forecasted that the increase will continue.
    – 68 –
    INDUSTRY OVERVIEW
    (1) Vestas Wind Systems A/S is a Danish manufacturer of wind power generation equipment.
    (2) Gamesa Corporación Tecnológica, S.A. is a Spanish manufacturer of power generation equipment, mainly wind power generation equipment.Entry Barriers
    We believe the entry barriers to the PRC WTG manufacturing industry are as follows:
    Track record Buyers exercise great care in selecting WTG manufacturers and historical performance is
    perceived as a reliable indicator of product quality and capabilities of a WTG manufacturer. WTG manufacturers
    with a longer operating history generally have a competitive advantage as it takes three to five years to bring a WTG
    from the design stage to actual production.
    Technological expertise The design and manufacture of WTGs with large capacities are highly complex,
    involving a wide variety of technologies, including aerodynamics, multi-body dynamics, simulation technology and
    testing technologies. In order to develop aWTGseries suitable for the PRC’s diverse geographical climates and able
    to meet the needs of Chinese customers, WTG manufacturers must possess both practical experience and
    technological expertise.
    Supply chain WTG manufacturers must possess strong supply chain management capability and maintain
    long-term relationships with parts and components suppliers for the design and manufacture of WTGs. As the
    technical barriers for the manufacture of various core components are high, WTG manufacturers will require a
    substantial amount of time to collaborate with domestic suppliers so as to ensure a stable and high quality supply. In
    particular, foreign WTG manufacturers may encounter greater difficulties in establishing a supply chain in China.
    Financial strength The WTG manufacturing industry requires significant initial investment. Such initial
    investment may not be recovered in the near term and profitability is realized only after a certain level of production
    scale has been attained, so WTG manufacturers must have a strong capital position and ready access to financing.
    Qualified personnel The wind power industry being an emerging industry, there is a general lack of
    personnel with extensive industry experience who are well-versed in the technologies involved. For small-scale
    manufacturers or new entrants, their technical personnel may lack the practical experience and technical expertise
    possessed by the technical personnel of large manufacturers or those with a longer operating history.
    Remediation capability Risks of design and product defects arise as the unit capacity and volume of WTGs
    produced increase. With the mass deployment of WTGs in the PRC and the related contractual warranties and
    obligations involved, any significant PRC WTG manufacturer must have the financial and technical capability to
    remediate technical defaults on a large scale, facing a possible sudden decline in customer orders or being exposed
    to product liability claims.
    – 69 –
    INDUSTRY OVERVIEWREGULATIONS
    OVERVIEW
    Our business, which includes our three business segments, (i) WTG R&D, manufacturing and sales, (ii) wind
    power services, and (iii) wind farm investment, development and sale, is extensively regulated by PRC policies,
    relevant laws and regulations and other competent government authorities. These laws and regulations mainly relate
    to the supervision of the wind power industry, the administration of special funds for wind power equipment, the
    management of wind power concession projects and policies governing the grid tariff of wind power generation. In
    addition, all our operations in the PRC are subject to fees and taxes, as well as safety and environmental laws and
    regulations.
    Major Regulatory Authorities
    The State Council. As the highest administrative body, the State Council is responsible for examining and
    approving certain specific industrial and development projects classified as “encouraged” in the Guidance
    Directory of Industrial Restructuring.
    The NDRC. The NDRC has several functions, which include: (i) formulating and implementing major
    policies related to economic and social development in the PRC; (ii) examining and approving investment projects
    that exceed a certain level of investment or fall under special industrial categories, including foreign invested
    projects; (iii) supervising reforms conducted by state-owned enterprises; (iv) formulating and coordinating the
    implementation of industrial and investment policies for the renewable resources industries, such as the solar power,
    hydropower and wind power generation industries; and (v) among other things, setting power tariffs, accepting and
    approving CDM projects.
    The National Energy Administration (“NEA”). The NEA is a national administration managed by the
    NDRC. Its duties include (i) formulating energy development strategies, plans and policies along with the
    submission of recommendations on energy system reforms; (ii) implementing the management of oil, natural
    gas, coal and electric power; (iii) proposing policy measures for the development of renewable energy and energy
    conservation by the energy industries; (iv) reviewing international cooperation projects in the energy industries; and
    (v) managing the nationwide development and construction of offshore wind power projects.
    The Ministry of Finance. The Ministry of Finance determines policies for wind power project construction
    and manages the special funds for wind power equipment.
    The SERC (together with the local power bureaus). The SERC and the local power bureaus are responsible
    for (i) regulating the operations of the power market, power transmission and supply as well as businesses for noncompetitive
    power services; (ii) participating in the formulation of power technologies, safety, quotas, and quality
    standards, and the supervision and examination thereof; (iii) issuing and managing electric power business licenses;
    and (iv) coordinating with environmental protection authorities on the supervision and examination of the
    implementation by the power industry of environmental protection policies, regulations and standards.
    The State Administration of Work Safety. The State Administration of Work Safety Supervision and the
    local work safety supervision and management authorities are responsible for (i) supervising and managing the safe
    production of large wind power equipment; and (ii) implementating and supervising laws and regulations governing
    energy equipment operations and project construction safety.
    The State Administration of Quality Supervision. The State Administration of Quality Supervision and the
    local authorities for quality supervision, inspection and quarantine are responsible for (i) supervising and managing
    product quality and safety matters (including mandatory inspections and risk monitoring); (ii) monitoring and spotchecking
    by the state; and (iii) managing the production licenses of industrial products.
    – 70 –The State Environmental Protection Ministry. The State Environmental Protection Ministry supervises and
    controls environmental protection works and monitors the environmental systems of the entire country.
    State Oceanic Administration. The State Oceanic Administration is responsible for the management and
    supervision of the usage of sea areas and environmental protection in relation to the development and construction
    of offshore wind power projects.
    Major Regulations
    Major industrial policies, laws and regulations governing the production and sale of wind power equipment
    include The Energy Conservation Law of the PRC, The Renewable Energy Law of the PRC, The Electric Power Law
    of the PRC, The Medium and Long-Term Development Plan for Renewable Energy, Notice from the NDRC
    Regarding the Issuance of the 11th Five-Year Plan for the Development of Renewable Energy, A Development Guide
    Directory for the Renewable Energy Industry, Relevant Management Regulations on Power Generation by
    Renewable Energy, Management Measures for Preliminary Work on Wind Power Concession Projects, Interim
    Measures for Management of Special Funds for the Development of Renewable Energy, Interim Measures for
    Management of Special Funds for the Industrialization of Wind Power Generation Equipment, Measures on
    Supervision and Administration of Grid Enterprises in the Purchase of Renewable Energy Power, Notice from the
    NDRC Regarding Perfection of Policies Regarding the Grid Tariffs of Wind Power Generation, and Interim
    Measures for the Adjustment and Assignment of Additional Revenue from Electricity Tariff from Renewable Energy.
    Overall Industry Regulation Planning and Guidance
    The Energy Conservation Law of the PRC promulgated by the Standing Committee of the 8th NPC on
    November 1, 1997, as amended on October 28, 2007, has been implemented since April 1, 2008. Under this
    legislation, the conservation of resources is recognized as a basic national policy of China. The PRC Government
    implements an energy development strategy that concurrently promotes conservation and development, and
    recognizes energy conservation as a priority.
    The Renewable Energy Law of the PRC was promulgated on February 28, 2005, and has been implemented
    since January 1, 2006. The amendment of The Renewable Energy Law of the PRC was passed by the 12th meeting of
    the Standing Committee of the 11th NPC on December 26, 2009. It outlines a regulatory framework for the
    development and use of renewable energy. The main purpose of this legislation is to promote the development and
    use of renewable energy, increase energy supply, improve the energy structure, safeguard the safety of energy,
    protect the environment and eventually achieve sustainable economic and social development in China.
    The law stipulates that power grids shall sign grid connection agreements with renewable power generation
    enterprises, acquire the full amount of their grid-connected power and provide power grid connection services in
    relation to power generated by renewable energy sources. Meanwhile, the law has also preliminarily formulated
    measures for the management of on-grid tariffs for renewable energy. Under this law, the higher costs incurred for
    purchasing electricity generated by renewable energy as compared to costs calculated on the basis of the average
    on-grid tariff for electricity generated by conventional energy sources shall be compensated by amounts collected
    from a renewable energy tariff imposed on the sale of electricity nationwide. Grid connection costs and relevant
    expenses reasonably incurred by a power grid in purchasing electricity generated by renewable energy may be
    included in its power transmission costs and recovered through the retail electricity price.
    In addition, the law provides for the establishment of a renewable energy development fund, which shall be
    used for compensation payments of additional costs and the support of five production and construction activities in
    – 71 –
    REGULATIONSrelation to renewable energy. It also provides that financial institutions may offer preferential loans with financial
    discounts for renewable energy development and utilization projects, which are listed in the renewable energy
    industry development guidance catalogue and which fulfill credit requirements. In addition, the state shall adopt a
    tax incentive policy for projects that are listed in the renewable energy industry development guidance catalogue.
    On August 31, 2007, the NDRC issued the Medium and Long-Term Development Plan for Renewable Energy,
    which indicates that China should strive to achieve the goal of having at least 10% and 15% of the total energy
    consumption in the PRC being made up of consumption of renewable energy (including hydropower) by 2010 and
    2020, respectively. In regions covered by a major power grid, the percentage of power generated by renewable
    energy sources shall reach at least 1% and 3% of the total power generated by the power grid by 2010 and 2020,
    respectively. Meanwhile, for investors with attributable installed capacity of over 5 GW for power generation, the
    percentage of the attributable installed capacity of renewable power generation must reach over 3% and 8% of the
    attributable installed power capacity owned by them by 2010 and 2020, respectively. Moreover, with respect to wind
    power generation, the plan also requires full leverage of the economic strength of the more developed coastal
    regions and the natural resources of China’s “the three northern regions”, being the northwestern, northern and
    northeastern regions, to construct large and mega wind power stations. The plan also calls for other regions in China
    to construct medium and small wind power stations as appropriate.
    The Notice from the NDRC Regarding the Issuance of the 11th Five-Year Plan for the Development of
    Renewable Energy was promulgated by the NDRC and took effect on March 3, 2008. According to this notice,
    during the 11th Five-Year Plan period, newly installed wind power capacity in China was approximately 9 GWand
    the total install capacity of wind power in China is expected to reach 10GWby 2010. In addition, annual production
    capacity for wind power equipment and whole units manufactured domestically will reach 5 GW, and the
    production capacity of parts and components is expected to reach 8 GW by 2010, laying a solid foundation for
    the rapid development of wind power after 2010. Together with the construction of power supply facilities in
    regions with no electricity supply, a small wind power equipment industry and market should be actively developed.
    This notice anticipates that by 2010, the number of small WTGs in use will reach 300,000 units, with a total capacity
    of 75 MW, and the annual equipment production capacity will reach 8,000 sets. It further anticipates that
    approximately 30 key large wind farms that exceed 100 MW and five wind power bases at the 1,000 MW
    level will be constructed. This notice is aimed at fully leveraging the advantage of “the three northern regions” in
    wind power resources and constructing large and mega wind farms in those regions.
    A Development Guide Directory for the Renewable Energy Industry was promulgated by the NDRC on
    November 29, 2005. The document sets out 88 types of renewable energy projects (including hydropower) which, if
    other requirements are met, will be entitled to favorable tax rates, preferential loans with discounts and special
    funds. The directory provides an itemized description of the technologies of the renewable energy (including
    hydropower) projects, so as to facilitate the provision of information by competent government authorities and the
    development of policies and measures to support such projects.
    The Relevant Management Regulations on Power Generation by Renewable Energy was promulgated by the
    NDRC on January 5, 2006, and provides that: (i) management of projects for power generation from renewable
    energy (including hydropower), including electricity generated from wind power, will be implemented in a
    hierarchical fashion by the central and local governments, while the NRDC is responsible for the planning and
    policy development of projects for power generation from renewable energy (including hydropower) at the state
    level, in addition to the management of projects that require state examination or approval. The competent
    authorities of provincial governments in charge of energy are responsible for the management of projects for power
    generation from renewable energy (including hydropower) within their own jurisdictions; (ii) wind power
    – 72 –
    REGULATIONSgeneration projects at 50 MWand above will require examination and approval by the NDRC while other projects
    will require the examination and approval by competent authorities of provincial governments in charge of
    investments and filing with the NDRC. Projects involving power generation from biomass, geothermal, ocean and
    solar energy that require state policy and funding support should be filed with the NDRC; (iii) grid tariffs of projects
    for power generation from renewable energy (including hydropower) shall be set by competent authorities of the
    State Council in charge of pricing, taking into account the characteristics of different types of renewable energy
    (including hydropower) for power generation and different regions, on the principle of promoting the development
    and utilization of renewable energy (including hydropower) on a reasonable and economical basis, and shall be
    adjusted and disclosed to the public at appropriate times based on the progress of the technologies that develop and
    utilize renewable energy (including hydropower); and (iv) power generation enterprises shall actively invest in and
    construct projects for power generation from renewable energy (including hydropower) and comply with
    obligations imposed by the state in relation to the power generation quotas for renewable energy sources
    (including hydropower), while the quota targets and management measures for power generation shall be
    separately provided for, and large power generation enterprises shall invest in renewable power generation
    projects as a priority.
    The Management Measures for Preliminary Work on Wind Power Concession Projects, which was
    promulgated in 2003 by the NDRC, expressly provides that a wind power concession project refers to a wind
    power generation project, the construction of which requires a public bid for investor selection. Preliminary work of
    wind power concession projects includes wind energy resource evaluation, wind farm site selection and wind farm
    pre-feasibility study.
    Production of Wind Power Equipment
    Management of special funds
    On February 13, 2006, the State Council submitted its Several Opinions on Accelerating Revival of the
    Equipment Manufacturing Industry. These opinions are designed to enhance the competitiveness of the PRC’s
    equipment manufacturing industry and are aimed at domestic equipment manufacturing enterprises that have a
    competitive edge, independent intellectual property rights and key technologies, in order to meet the demands of
    key sectors such as energy, transportation, raw materials and national defense. These include the production of
    large-scale renewable energy equipment, such as WTGs, in order to meet the domestic demand for electric power
    construction.
    The Interim Measures for Management of Special Funds for the Development of Renewable Energy has been
    implemented since May 30, 2006. These measures state that the PRC Government will set up “special funds for the
    development of renewable energy” whereby five categories of renewable energy construction or relevant projects,
    such as scientific and technical research on the development and utilization of renewable energy and localized
    production of equipment, will be supported by subsidies and discount loans.
    The Interim Measures for Management of Special Funds for the Industrialization of Wind Power Generation
    Equipment was promulgated by the Ministry of Finance on August 11, 2008, and provides funding support for the
    industrialization of enterprises in the PRC that manufacture wind power generation equipment (including whole
    machines and impellers, gearboxes, power generators as well as parts and components such as inverters and
    bearings) with PRC investments and controlled by PRC investors. Funds for such industrialization come mainly in
    the form of subsidies to enterprises for the production of the first 50 units of MW-level WTGs which are newlydeveloped
    and produced after industrialization. The subsidies also cover ancillary parts and components. The
    amount of subsidies is based on installed capacity and other standards provided.
    – 73 –
    REGULATIONSDomestically manufactured wind power equipment components
    On July 4, 2005, the NDRC promulgated the Notice of the NDRC in Relation to the Relevant Requirements of
    the Management of Wind Power Construction, which stipulates that at least 70% of wind turbine components (by
    purchase value) shall be manufactured domestically. This requirement had a relatively large effect on promoting the
    initial development of the PRC wind power equipment manufacturing industry. As a result of significant
    improvements in the production standards and after-sales service capabilities of domestic manufacturers, the
    pricing and after-sale services of domestically manufactured WTGs are now more competitive. In 2009, the PRC
    Government removed the restriction on the proportion of wind turbine components that must be domestically
    manufactured, which resulted in the PRC WTG market becoming completely market-oriented.
    Prevention of overcapacity in wind power equipment industry
    On September 26, 2009, the State Council promulgated the Notice of the NDRC and other Departments of
    Certain Opinions in Relation to Curbing Overcapacity and Repeated Construction in Some Industries and Guiding
    the Healthy Development of Industries, in which the PRC Government stated that in its implementation of
    regulations on prevention of overcapacity in the wind power equipment industry, it will “exercise strict control over
    the blind expansion of the production of wind power equipment, encourage leading enterprises to become larger and
    stronger” and limit price competition. As such, we are of the view that this policy will not have any material adverse
    effect on leading wind power equipment manufacturers in the PRC, including our Group.
    Wind Power Project Development
    Power Generation Business License
    On September 28, 2005, the chairman’s Office Meeting of the SERC promulgated the Provisions on the
    Administration of Electric Power Business Licenses (the “Licensing Provisions”), which stipulates that the PRC
    electric power industry must adopt a market access license system. According to the Licensing Provisions, the
    electric power business licenses are divided into three categories, namely power generation, power transmission and
    power supply, each corresponding to enterprises engaging in the businesses of power generation, power
    transmission and power supply. No PRC company or individual is allowed to participate in any electric power
    activities without having obtained an electric power business license issued by the SERC unless otherwise
    stipulated by the SERC. Electric power activities include but are not limited to power generation, power
    transmission, power distribution and power supply. According to the Notice Regarding Expediting the Issuance
    of Electric Power Business Licenses promulgated by the SERC, power plants that were constructed and commenced
    operations between December 1, 2005 and July 31, 2006 must obtain a power generation business license by the end
    of 2006. For power plants that commenced operations after August 1, 2006 which have newly constructed power
    generation projects, their operators must obtain power generation business licenses within three months after both
    the new and existing projects commence operations. Pursuant to the Licensing Provisions, an application for a
    power generation business license can only be filed after the relevant administrative approvals in respect of
    inspection of the power generation project upon completion, inspection of the power generation equipment upon
    commencement of operations, as well as environmental compliance matters have been obtained.
    Offshore Wind Power Projects
    On January 22, 2010, the NEA and the State Oceanic Administration jointly promulgated the Interim
    Measures for Management of the Development and Construction of Offshore Wind Power Projects, which stipulate
    that offshore wind power projects are the projects located at sea areas where the coastal line is below the average
    – 74 –
    REGULATIONSlevel of spring tide and high tide over a multiple year period and on deserted islands in the corresponding sea area.
    According to the measures, the enterprises engaged in the development and investment of the offshore wind power
    projects will be selected through a tender process on a priority basis. Such enterprises shall be Chinese funded
    enterprises or Sino-foreign joint venture enterprises controlled by Chinese investors (with equity interest of above
    50.0%). In addition, offshore wind power projects shall not commence construction until approvals of such projects
    and the right to use such sea area has been obtained.
    Supervision of Power Supply
    On November 26, 2009, the chairman’s Office Meeting of the SERC promulgated the Measures for
    Supervision of Power Supply, which stipulates that enterprises with electric power business licenses and
    engaging in power supply business should be subject to the supervision of the SERC and its agencies. The
    scope of supervision includes the enterprise’s power supply capacity, quality of the power supply, safety conditions
    of the power supply, circumstances of fulfilling obligations relating to universal service of electric power as well as
    situations relating to the handling of power consumption business.
    Dispatch
    In the PRC, except for power generated by facilities not connected to the power grids, all power is distributed
    through power grids. In such cases, a distribution center manages and is responsible for distributing power to various
    power grids. The operations of such distribution centers are subject to supervision under the Power Grid Dispatch
    Management Regulations promulgated and implemented on November 1, 1993 by the State Council (the “Dispatch
    Regulations”) and their implementing measures.
    The Dispatch Regulations and their implementing measures provide that distribution centers shall be divided
    into five levels, namely national power grid, multi-provincial power grid, provincial power grid, municipal power
    grid and county power grid levels. Based on comprehensive consideration of relevant factors such as daily power
    load demand, internal water level, fuel supplies, capacity of power grid equipment and equipment servicing
    requirements, the distribution centers will prepare a daily power generation curve for implementation by the various
    power plants, including active power, reactive power and voltage.
    Distribution centers prepare power generation and power supply distribution plans in accordance with plans
    issued by the state, relevant power supply and power grid synchronization agreements, and the equipment capacities
    of power grids.
    Power Generation Prices and Quotas
    The determination of the price of electric power is represented as a matter of principle in the relevant
    provisions of The Electric Power Law of the PRC (the “Electric Power Law”). In short, the price of electric power
    should represent a rational compensation for the cost of power generation and provide a reasonable return on
    investment. The price should take into account a fair allocation of expenditure, encourage the construction of power
    generation projects and go through an annual examination and approval process by the NDRC and provincial
    pricing authorities.
    In addition to the relevant provisions of the Electric Power Law, on July 3, 2003, the State Council approved
    the Reform Plan for the Price of Electric Power (the “Reform Plan”), which notes that the long term goal is to
    establish a standardized and transparent pricing mechanism for electric power on the power grid.
    – 75 –
    REGULATIONSOn March 28, 2005, the NDRC promulgated the Interim Measures for the Administration of the Power Grid
    Electric Power Price. These measures took effect on May 1, 2005, and provide regulatory guidance with respect to
    the above reform plan. For power plants located within power grids in areas where a pricing mechanism for power
    based on competitive bidding has not been implemented, competent authorities in charge of price shall determine
    and disclose the power tariff of the power grids to the public. This price is based on the production cost and a
    reasonable return on investment. For power plants located in areas where a pricing mechanism for power based on
    competitive bidding has been implemented, the power tariff comprises two components: (a) theWTGcapacity tariff
    as determined by the NDRC, which is based on the average cost of investment in various power generation units
    within the power grids in the same area; and (b) the power tariff determined through a competitive bidding process.
    In addition, the NDRC plans to gradually achieve the transition from WTG capacity tariff to power tariff.
    The Interim Trial Measures for the Administration of the Price of Renewable Energy Power Generation and
    Expense Allocation was issued by the NDRC and has been implemented since January 1, 2006. These measures
    correspond to the Notice Regarding the Relevant Requirements for the Construction and Management of Wind
    Power. These measures also provide that the power price of wind farms shall be measured and determined by
    competent authorities of the State Council in charge of prices based on actual circumstances of various regions on
    the principle of cost plus profit, and shall be made public. The notice provides that the power price of wind power
    concession construction projects shall be determined through a tendering process, but cannot be higher than the
    power price level set by competent authorities of the State Council in charge of prices. Meanwhile, such measures
    determine the price allocation mechanism for wind power projects.
    The Measures on Supervision and Administration of Grid Enterprises in the Purchase of Renewable Energy
    Power was implemented on September 1, 2007, which further enforces The Renewable Energy Law of the PRC (the
    “Renewable Energy Law”) and the relevant regulations. The measures effectively promote power grid
    synchronization for power generation from renewable energy in China and regulate the actions carried out by
    power grids in relation to their acquisition of the full amount of electricity generated from renewable energy. The
    electric power regulatory authorities implement the regulation of eight aspects of the design of renewable energy
    projects, covering the construction of projects for power generation from renewable energy by power grids, dispatch
    of power generated from renewable energy on a priority basis by power distribution authorities, and acquisition of
    the full amount of the electricity generated from renewable energy by power grids. The power regulation authorities
    may disclose to the public any acts by electric power enterprises or power distribution authorities in violation of
    state rules on the acquisition of the full amount of the electricity generated from renewable energy, and how such
    acts are being dealt with.
    The Interim Measures for the Adjustment and Assignment of Additional Revenue from Electricity Tariff from
    Renewable Energy provides that power grid access fees for wind farms shall be incorporated into a surcharge on the
    electric power price of renewable energy in order to compensate wind farms. The Notice from the NDRC Regarding
    Perfection of Policies Regarding the Grid Tariffs of Wind Power Generation, which has been implemented since
    August 1, 2009, provides that the benchmark power prices for wind power, based on the degree of wind energy
    resources and the project construction conditions, will be from RMB0.51 per kWh to RMB0.61 per kWh.
    The Notice for Regulating Relevant Issues of Electric Energy Trading Price Management, which was
    promulgated by the NDRC, the SERC and the NEA on October 11, 2009, clarified the trading prices between power
    generation enterprises and power grids, and prices for cross-provincial and cross-regional electric energy trading.
    According to the notice, once the power generation unit is put into commercial operation, other than crossprovincial
    and cross-regional trading of electric energy and as otherwise provided by the state, on-grid tariffs
    formulated by the competent governmental department in charge of pricing should apply to its on-grid power
    – 76 –
    REGULATIONSoutput. Prior to commercial operation of the power generation unit, on-grid tariffs approved by the competent
    department in charge of pricing is applicable from the date on which power generation units for renewable energy
    sources establish connection to the grid. When power generation enterprises commence the ramp-up process or
    voluntarily stop operations, and have to purchase electricity from power grids as a result, the applicable price should
    be in accordance with the large-scale industrial class power tariff standards in the local catalog price list. Prices of
    cross-provincial and cross-regional trading of electric energy shall consist of power delivery prices, power
    transmission prices (costs) and transmission losses.
    In addition to the above, the relevant departments promulgate notices from time to time regarding matters
    relating to additional allocation and subsidies of renewable energy tariffs for a certain period pursuant to the abovementioned
    laws and regulations. An example is the Notice from the NDRC and the SERC Regarding the Trading
    Scheme for Subsidies and Quota of Power Tariffs for Renewable Energy from January to June, 2009 promulgated by
    the NDRC and the SERC on December 17, 2009, which regulates relevant matters such as projects with subsidies
    for renewable energy tariffs, the amount of such subsidies, and trading of power tariffs with quotas from January to
    June, 2009.
    Mandatory Purchase and Priority Right of Distribution
    According to the Relevant Management Regulations on Power Generation by Renewable Energy, the SERC
    and its authorized agencies should supervise the power grids in respect of their mandatory purchase and gridconnection
    obligations. Power grids that are unable to, or fail to, perform the above responsibilities will be
    penalized. The SERC may also require power grids to compensate losses suffered by the relevant renewable energy
    enterprises and remedy their non-performance within a designated period of time. If the power grids refuse, they
    may be subject to a fine in an amount not exceeding two times the amount of the renewable power generation
    enterprises’ losses. These measures took effect on September 1, 2007.
    On August 2, 2007, the State Council approved its Measures for Energy Conservation in the Dispatch of
    Power Generation (Trial), with the aims of improving the utilization of natural resources, encouraging conservation
    of energy and achieving sustainable development. According to these measures, power generation companies that
    use non-adjustable renewable energy sources (including hydropower) such as wind, solar energy and hydropower
    enjoy the highest priority with respect to distribution of renewable energy resources.
    The right to priority in the dispatch of power generation units is determined by laws and regulations, and
    power is dispatched according to the following order: (i) non-adjustable power generation units that use renewable
    energy (including hydropower); (ii) adjustable power generation units that use renewable energy (including
    hydropower); (iii) nuclear energy power generation units; (iv) thermal power units and power generation units with
    integrated utilization of resources; (v) gas power generation units; (vi) other coal fuelled power generation units
    with no thermal load, which include thermal power units with no thermal loads; and (vii) fuel oil power generation
    units.
    CDM
    The arrangements of the CDM was established by the Kyoto Protocol under the United Nations Framework
    Convention on Climate Change, which principally states that industrialized countries contributing to a reduction of
    greenhouse gas emissions can invest in projects in developing countries that reduce greenhouse gas emissions, and
    obtain emission credits, known as CERs, therefrom. Investors from industrialized countries can use such CERs to
    offset their domestic emission reduction goals or sell them to others, which provide an alternative to the high costs
    of emissions reduction in their own countries.
    – 77 –
    REGULATIONSIn 1993 and 2002, China ratified and signed the United Nations Framework Convention on Climate Change
    and the Kyoto Protocol, respectively, but these did not give rise to responsibilities of a binding nature to achieve
    emission reduction goals. Among the relevant government authorities in the PRC, the State Climate Change
    Countermeasure Coordination Group Office is responsible for the formulation of policies and overall coordination,
    while the State CDMCommission is responsible for the examination and approval ofCDMprojects implemented in
    China.
    The NDRC and the MOST, the Ministry of Foreign Affairs and the Ministry of Finance of the PRC jointly
    promulgated the Measures for Operation and Management of CDMProjects on October 12, 2005. The measures set
    out the rules and requirements for the examination and approval of CDM projects. The contents include but are not
    limited to:
    (a) entities which are permitted to conduct CDM projects in the PRC are restricted to companies that are
    wholly owned or controlled by a PRC partner. Therefore, a company controlled by foreign investors is
    prohibited from conducting CDM projects in the PRC;
    (b) the examination and approval of a CDM project is conducted according to the following procedures:
    (i) the NDRC appoints experts from a relevant organization to make an evaluation; (ii) the State CDM
    Project Review Council reviews and approves the CDM project; and (iii) the NDRC, MOST and the
    Ministry of Foreign Affairs jointly issues a certificate of approval; and
    (c) with respect to any CDM project approved after October 12, 2005, (i) the PRC Government has the
    right of recourse for reduction of emissions; (ii) ownership of the credits generated by a CDMproject is
    vested in the owners of the CDM project; and, (iii) the fees imposed by the PRC Government is based
    on the proceeds generated from the sale of CERs under a CDM project, as against the different rates
    under the category of the CDM project. With respect to renewable energy, the development and
    utilization of which are encouraged by government policies (such as wind power projects), the PRC
    Government will only charge 2.0% of the transfer amount of greenhouse gas emission reductions.
    Safe Production and Labor Protection
    In accordance with laws and regulations such as The Law of Safe Production of the PRC, which has been
    implemented since November 1, 2002 and amended on August 27, 2009, and Regulations on Safe Production
    Licenses, which has been implemented since January 13, 2004, the State Administration of Work Safety performs
    comprehensive supervision and management of safe production work in the PRC. Organizations engaging in
    production and operation activities in the PRC must comply with the laws and regulations governing safe
    production, strengthen safe production management, establish and refine their safe production responsibility
    system, improve safe production conditions and ensure safe production. According to the Interim Regulations on
    Investigations into Accidents in Power Production, electric power enterprises must make a report to the SERC upon
    the occurrence of any major personal accident, power grid accident, equipment accident or fire accident, or power
    plant dam collapse as well as any power outage accident that has a serious effect on the society.
    Environmental Protection
    The PRC environmental protection laws and regulations that apply to our wind power equipment production
    and wind power project construction business include The Environmental Protection Law of the PRC, The Law of
    the PRC on Prevention and Control of Water Pollution, The Law of the PRC on the Prevention and Control of
    – 78 –
    REGULATIONSAtmospheric Pollution, The Law of the PRC on Prevention of Environmental Pollution Caused by Solid Waste and
    The Law of the PRC on Appraising Environment Impacts.
    The Environmental Protection Law of the PRC (the “Environmental Protection Law”) was promulgated on
    December 26, 1989 by the Standing Committee of the NPC and is the most important environmental protection law
    in the PRC. This law formulated the basic principles of coordinating the development of economic growth, social
    advancement and environmental protection, and outlines the powers and duties of the various levels of government
    in the PRC.
    Under the Environmental Protection Law, in order to prevent environmental pollution and to protect the
    ecological environment, the State Ministry of Environmental Protection is authorized to develop nationwide
    standards for environmental quality and emissions, and is responsible for monitoring the environmental protection
    system of the PRC. The environmental protection authorities at various levels of the PRC Government (at and above
    the county level) are responsible for environmental protection work within their own jurisdictions. Local
    environmental protection authorities have the power to formulate local standards that are more rigorous than
    national standards, and enterprises must comply with the more rigorous standard as between the state and local
    environmental protection standards. The Environmental Protection Law provides that any enterprise that may cause
    pollution or generate other harmful substances in its operations must adopt environmental protection measures in its
    operations by creating an environmental protection responsibility mechanism and adopting effective measures to
    control and properly dispose of exhaust gas, wastewater, waste residue, waste dust and other wastes.
    In addition, any newly-constructed project, expansion project or renovation project and other equipment
    installation project that directly or indirectly discharges pollutants into the environment must comply with
    applicable state environmental protection regulations governing such project. The entity undertaking such
    project must submit a pollutant discharge declaration to the competent authorities, setting out in details the
    relevant matters such as the volume and type of discharge, the locations of the discharge and handling methods for
    examination purposes. The competent authorities may permit an operator which constructs a project to discharge a
    certain amount of pollutants, but if the pollutant discharge standards provided by the state or local governments are
    exceeded, a pollutant discharge fee must be paid and a pollutant discharge permit for discharge in the volume set out
    above must be obtained. In addition, even if the discharge standards have not been exceeded, an operator which
    discharges any pollutant into a body of water must pay a pollutant discharge fee. Discharge of pollutants is subject to
    supervision of the competent environmental protection authorities. If an operator fails to pay a pollutant discharge
    fee in accordance with the relevant provisions, the local environmental protection administrations are authorised to
    impose a penalty in an amount equivalent to of several times of the pollutant discharge fee, order the operator to
    cease operations, or adopt other measures for remedy.
    To facilitate the thorough implementation and performance of the Renewable Energy Law of the PRC, and to
    support the development of wind power, standardize and accelerate the development and construction of wind
    farms and promote sustainable social and economic development in accordance with applicable state laws and
    regulations, and taking into account the characteristics of the construction of wind farms, the NDRC, the Ministry of
    Land and Resources and the State Ministry of Environmental Protection have jointly developed the Interim
    Measures for Management Of Land Used for Wind Power Farm Project Construction and Environmental
    Protection. These interim measures took effect on August 9, 2005 and provide that the construction of wind
    energy projects must comply with the PRC environmental impact assessment system. Under this system, the local
    competent authorities at the provincial level where such construction is located are in charge of environmental
    protection and are responsible for the review, examination and approval of the environmental impact assessment of
    wind energy projects. If the wind energy project is constructed on land which involves the natural reserves of the
    – 79 –
    REGULATIONSstate, local competent authorities in charge of environmental protection must seek the opinion of the Ministry of
    Environmental Protection before issuing an approval.
    Those who violate the Environmental Protection Law and various other environmental protection regulations
    may be given warnings and ordered to pay damages and fines. Any entity that carries out construction work or
    production activities prior to examination and approval by the environmental protection authorities of pollution and
    waste control and treatment facilities may be ordered to cease production or operations, and may be subject to fines.
    If any major property loss or personal injury or death arises as a result of any violation of such laws, the persons
    violating environmental protection laws and regulations may be held criminally responsible.
    Taxes
    Enterprises Income Tax
    According to the New EIT Law which took effect on January 1, 2008, PRC enterprises typically pay an
    enterprise income tax at the rate of 25% and enterprises identified as high-and-new-technology enterprises
    requiring key state support enjoy a preferential enterprise income tax rate of 15%. Our Company has been
    identified as a high-and-new-technology enterprise and has obtained the relevant certificate, as such, we are subject
    to an enterprise income tax rate of 15%. In addition, according to the New EIT Law and the Notice Regarding
    Implementation of Transitional Favorable Policies for Enterprise Income Tax promulgated by the State Council on
    December 26, 2007, the preferential tax treatments for enterprises located in western China still apply. Our
    subsidiaries located in western China shall pay enterprise income tax at the preferential tax rate of 15%.
    According to the Notice for Issues Regarding the Withholding of Enterprise Income Tax for Dividends
    Distributed by Resident Enterprises in China to Non-resident Enterprises Holding H-shares of the Enterprises
    promulgated by the State Administration of Taxation on November 6, 2008, enterprise income tax shall be withheld
    at a uniform tax rate of 10% on dividends for 2008 and the subsequent years which are distributed by PRC resident
    enterprises to foreign H shareholders that are non-resident enterprises, except where the jurisdiction in which the
    foreign investor is established has a different withholding arrangement under a tax treaty with the PRC.
    According to the Notice on Issues on Implementation of the Directory of Favorable Enterprise Income Tax for
    Public Infrastructure Projects from the Ministry of Finance and the State Administration of Taxation, enterprises
    that were set up after January 1, 2008, which carry out public infrastructure works are entitled to a three-year
    enterprise income tax exemption period beginning from the first year in which they generate revenue. Furthermore,
    they are entitled to a 50% enterprise income tax relief in the next three subsequent years. Thus, a wind power project
    that receives an approval document from the governmental authorities on January 1, 2008 or thereafter is entitled to
    foregoing preferential tax policies starting from the first year it generates revenue from the sale of wind power.
    Value-Added Tax
    In accordance with the Notice Regarding Policy Issues on the Comprehensive Use of Resources and Value-
    Added Taxes of Other Products, we enjoy a preferential treatment of a 50% instant rebate on value-added tax levied
    on our sale of electricity generated by wind energy.
    The value-added tax reform was implemented on January 1, 2009. The amended value-added tax regulations
    and their implementing regulations allow an ordinary payer of value-added tax to offset input value-added tax
    against output value-added tax for the fixed assets purchased or made by it in accordance with the calculations based
    on the relevant value-added tax credit receipts.
    – 80 –
    REGULATIONSOn December 25, 2008, the Ministry of Commerce and the State Administration of Taxation jointly
    promulgated the Notice on Cessation of Tax Refund Policies for Enterprises with Foreign Investment that
    Purchase Chinese-Made Equipment. This notice provides that, starting from January 1, 2009, the tax refund
    policies on value-added tax for foreign-invested enterprises which purchase equipment made in the PRC would be
    revoked unless such enterprises had purchased such equipment prior to June 30, 2009, or had received special valueadded
    tax invoices and declared a tax refund with the relevant tax authorities during the previous transaction period,
    in which case they would still be entitled to a refund of the value-added tax.
    – 81 –
    REGULATIONSOUR HISTORY AND CORPORATE STRUCTURE
    Background
    The history of our Company traces back to February 1998 when XJ NewWind, our Company’s predecessor,
    was established in the PRC as a limited liability company. At that time, it was held as to 90.0% by Xinjiang Wind
    Power and 10.0% by four individuals.
    On December 31, 2000, the then shareholders of XJ New Wind passed a resolution to convert XJ New Wind
    from a limited liability company into a joint stock limited liability company.With the approval of the government of
    Xinjiang, XJ New Wind was converted into a joint stock limited liability company on March 26, 2001 and XJ New
    Wind was renamed as Xinjiang Goldwind Science & Technology Co., Ltd. ( ) which
    had a registered share capital of RMB32.3 million.
    Major Increase in Share Capital
    On December 21, 2004, with the approval of the general meeting of our Company and the government of
    Xinjiang, the share capital of our Company was increased from RMB32.3 million to RMB70.0 million. On
    December 16, 2005, upon approval by the general meeting of our Company and the government of Xinjiang, the
    share capital of our Company was further increased from RMB70.0 million to RMB100.0 million. In March 2007,
    our 2006 annual general meeting approved an increase of the share capital of our Company from RMB100.0 million
    to RMB450.0 million by way of capitalization of our 2006 undistributed profits, legal accumulation fund and
    surplus accumulation fund.
    Pre-A Share Offering Investments by 26 Non State-Owned Corporate Entities
    Prior to our A Share offering, 26 non state-owned corporate entities who are Independent Third Parties
    became Shareholders of our Company. In particular, CB Fund(1), Yuanjing Xinfeng(2), Yuanjing Xinneng(3) and
    Yuanfeng Investment(4) became the Shareholders of our Company as detailed below.
    On September 16, 2005, we entered into an agreement with the original Shareholders and four new investors,
    including CB Fund and China Everbright Investment Management Company (“China Everbright”) and two other
    Independent Third Parties(5) for the subscription of 30 million Shares by the new investors. CB Fund and China
    Everbright subscribed for 8 million Shares and 7 million Shares, respectively, at a consideration of
    RMB40.0 million and RMB35.0 million, which were negotiated and determined at arm’s length. Our
    Company’s 2005 extraordinary general meeting approved the increase of our share capital and the subscription
    by the four new investors.
    In accordance with the equity transfer agreement dated May 25, 2006, China Everbright transferred 7 million
    Shares to China Everbright Growth Investment (Shenzhen) Company Limited (“China Everbright Growth
    Investment”), an Independent Third Party for total consideration of RMB35.0 million.
    – 82 –
    (1) CB Fund was established on November 18, 2004. Its business scope is investment in the equity of unlisted enterprises; subscription for bonds
    issued by the PRC Government and other fixed return bonds on the primary market; providing management consultancy services to invested
    enterprises; and other business activities approved by the competent authorities.
    (2) Yuanjing Xinfeng was established on November 13, 2006. Its business scope is project investment consultancy.
    (3) Yuanjing Xinneng was established on November 17, 2006. Its business scope is project investment consultancy.
    (4) Yuanfeng Investment was established on November 24, 2006. Its business scope is investment in industrial projects or companies and
    investment consultancy.
    (5) These two Independent Third Parties disposed of their interests in our Company prior to our A share offering.In accordance with the equity transfer agreements dated November 30, 2006 entered into amongst China
    Everbright Growth Investment, Yuanjing Xinneng, Yuanjing Xinfeng and Yuanfeng Investment, China Everbright
    Growth Investment transferred 2 million Shares, 4.85 million Shares and 150,000 Shares, being 7 million Shares in
    aggregate, to each of Yuanjing Xinneng, Yuanjing Xinfeng and Yuanfeng Investment, respectively.
    CB Fund, Yuanjing Xinfeng, Yuanjing Xinneng and Yuanfeng Investment are all third parties independent of
    our Company and independent of our state-owned Shareholders. Save for Yuanjing Xinfeng being the wholly
    owned subsidiary of SeaBright China Special Opportunities (I) Limited (“SeaBright”), and shareholders of
    Yuanfeng Investment being investment managers of SeaBright, their beneficial owners are independent of one
    another and they are not parties acting in concert. CB Fund, Yuanjing Xinfeng, Yuanjing Xinneng and Yuanfeng
    Investment are not controlled or owned by any governmental entities.
    After various increases in our Company’s share capital and the numerous share transfers by or amongst the
    Shareholders of our Company, the shareholding structure of our Company immediately prior to our A Share
    offering was as follows:
    No. Shareholders Type of Shares
    Number of
    Shares
    Approximate
    percentage of
    shareholding
    (%)
    1. Xinjiang Wind Power . . . . . . . . . State-owned shares 91,350,000 20.3
    2. China Water . . . . . . . . . . . . . . . . State-owned shares 78,750,000 17.5
    3. Wind Power Research Centre(1) . . State-owned shares 10,710,000 2.4
    4. Solar Energy Co.(1) . . . . . . . . . . State-owned shares 5,188,950 1.2
    Subtotal: . . . . . . . . . . . . . . . . . . 185,998,950 41.4
    5. 26 domestic corporate entities . . . Non state-owned legal person shares 134,710,763 29.9
    6. 30 PRC individuals . . . . . . . . . . . Natural person shares 129,290,287 28.7
    Total . . . . . . . . . . . . . . . . . . . . . 450,000,000 100.0
    (1) Wind Power Research Centre and Solar Energy Co. are controlled by the Finance Department of Xinjiang
    Listing on the SZSE and Further Increase in Share Capital
    On December 5, 2007, our Company’s application for our initial public offering and listing of our A Shares on
    the SZSE was approved by the CSRC. On December 13 and 14, 2007, our Company issued 50,000,000 A Shares to
    the public in the PRC, including 40,000,000 A Shares by way of on-line offering that were listed on the SZSE on
    December 26, 2007, and the remaining 10,000,000 A Shares by way of off-line placing that were listed on the SZSE
    on March 26, 2008 after a three-month lock up period. After the issuance of the A Shares, the share capital of our
    Company increased to RMB500.0 million. 450,000,000 Shares held by the Shareholders before the initial public
    offering on the SZSE were subject to trading restrictions and were not freely tradable. XinjiangWind Power, China
    Water, Wind Power Research Centre, CB Fund, Yuanjing Xinfeng, Yuanjing Xinneng and Yuanfeng Investment
    were subject to trading restrictions for three years (which will expire on December 25, 2010), and the remaining
    corporate Shareholders (including Solar Energy Co.) and 30 individual Shareholders were subject to trading
    restrictions for one year, which expired on December 25, 2008. Our PRC legal advisor has confirmed that all of our
    Shares were tradable upon our listing on the SZSE, and our Company is not required to carry out any share reform.
    Our Company’s 2007 annual general meeting approved the increase of the share capital of our Company by
    capitalizing our capital reserve fund and undistributed profits. Accordingly the share capital of our Company was
    – 83 –
    OUR HISTORY AND CORPORATE STRUCTUREfurther increased from RMB500.0 million to RMB1,000.0 million. The increase of share capital was registered with
    the Administration for Industry and Commerce of Xinjiang on March 3, 2008.
    Our Company’s 2008 annual general meeting approved the increase of the share capital of our Company by
    capitalizing our undistributed profits. Accordingly, the share capital of our Company was further increased from
    RMB1,000.0 million to RMB1,400.0 million. The increase of share capital was registered with the Administration
    for Industry and Commerce of Xinjiang on May 11, 2009.
    Our Company’s 2009 annual general meeting further approved the increase of our Company’s share capital by
    capitalizing our undistributed profits. Accordingly, our Company’s share capital was further increased from
    RMB1,400.0 million to RMB2,240.0 million. The increase of share capital was registered with the Administration
    for Industry and Commerce of Xinjiang on April 13, 2010.
    Acquisition of Vensys AG
    On January 25, 2008, a resolution approving the acquisition of Vensys AG was passed at our Company’s
    annual general meeting for the year 2007, it was also approved that our Company’s wholly owned subsidiary,
    Goldwind Windenergy, would acquire from Vensys/Innowind and Saarwind their 70.0% shareholding interest in
    Vensys AG, totaling 3,500,000 shares. The purchase price would be EUR11.78 per share and the total purchase
    price would be EUR41,240,000. On January 24 and 25, 2008, Vensys/Innowind, Saarwind (both Vensys/Innowind
    and Saarwind as the sellers), GoldwindWindenergy (as purchaser), our Company (as related party of purchaser) and
    Vensys AG entered into the Vensys Shares SPA. Vensys/Innowind, Saarwind, Windpark, Goldwind Windenergy,
    Vensys AG and our Company entered into the Vensys Supplemental Agreements on May 14, 2010. The acquisition
    of Vensys AG was completed in April 2008.
    At the same time, according to the Vensys Shares SPA and the Vensys Supplemental Agreements mentioned
    above, our Company granted each of the shareholders of the remaining 30.0% shareholding interest of Vensys AG
    (i.e. Vensys/Innowind, Saarwind and Windpark) the Vensys Option. Please see the section entitled “Share
    Capital —Option to Exchange Vensys AG’s Shares” in this prospectus for more details.
    Apart from the acquisition of Vensys AG mentioned above, given the nature of our Company’s business, we
    have also acquired numerous subsidiaries solely for the purpose of carrying out certain projects. Particulars of these
    acquisitions are set out in the appendix entitled “Appendix I— Accountants’ Report” to this prospectus.
    – 84 –
    OUR HISTORY AND CORPORATE STRUCTUREThe Shareholding Structure of our Company
    The following table sets out the shareholding structure of our Company as at the Latest Practicable Date and
    immediately before the Global Offering on the assumption that the A Shares have not been transferred to NSSF
    (Please see the section entitled “Share Capital — Transfer of the State-owned Shares to the NSSF” in this
    prospectus for more details):
    No. Shareholder Type of Shares
    Number
    of Shares
    Approximate
    shareholding (%)
    1 Xinjiang Wind Power A Shares 409,248,000 18.3
    2 China Water A Shares 352,800,000 15.8
    3 CB Fund A Shares 161,280,000 7.2
    4 Yuanjing Xinfeng A Shares 97,776,000 4.4
    5 Wind Power Research Centre A Shares 47,980,800 2.1
    6 Yuanjing Xinneng A Shares 40,320,000 1.8
    7 Yuanfeng Investment A Shares 3,024,000 0.1
    8 Directors and senior management A Shares 97,505,208 4.4
    9 Other public Shareholders A Shares 1,030,065,992 45.9
    Total 2,240,000,000 100.0
    – 85 –
    OUR HISTORY AND CORPORATE STRUCTUREOur Group Structure Chart
    The following chart sets out our shareholding structure and our principal subsidiaries immediately before
    completion of the Global Offering and on the assumption that A Shares have not been transferred to NSSF
    according to the Transfer Measures (Please see the section entitled “Share Capital —Transfer of the State-owned
    Shares to the NSSF” in this prospectus for more details):
    Xinjiang
    Changyuan
    Water Group
    Ltd.
    China Water
    Investment
    Co., Ltd(9)
    Xinjiang
    SASAC
    Xinjiang Wind
    Power Co., Ltd.
    China Water
    Resources
    Investment
    Group
    Company
    China-Belgium
    Direct Equity
    Investment Fund
    Shenzhen
    Yuanjing Xinfeng
    Investment
    Consultation
    Co., Ltd.
    Shenzhen Yuanjing
    Xinneng
    Investment
    Consultation Co.,
    Ltd.
    Shenzhen
    Yuanfeng
    Investment Co. ,
    Ltd.
    Directors and
    senior
    management
    Other
    public A
    Shareholders
    Xinjiang Goldwind Science & Technology Co., Ltd.
    Vensys
    Energy AG
    Vensys
    Elektrotechnik
    GmbH
    18.3% 15.8%
    40.0% 60.0 %
    17.7% 9.4%
    38.9%
    33.9%
    100.0%
    7.2% 4.4% 2.1% 1.8% 0.1%
    100.0%
    100.0%
    100.0%
    4.4% 45.9%
    100.0% 100.0% 75.0% 83.3% 100.0% 100.0%
    100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
    China Three Gorges
    70.0%
    90.0%
    90.0% 51.0% 100.0% 66.0% 51.0% 56.0% 51.0 %51.0%100.0% 100.0%100.0% 100.0%100.0% 51.0% 100.0%100.0% 100.0% 51.0% 100.0%
    Xianghuang Qi Tianrun Wind Power Co., Ltd.
    Inner Mongolia Bayannur Fuhui Wind Energy Electricity Co., Ltd.
    Tacheng Tianrun Wind Power Co., Ltd.
    Buerjin Tianrun Wind Power Co., Ltd.
    Shangdu Tianrun Wind Power Co., Ltd.
    HamiTianrun New Energy Co., Ltd.
    Guazhou Tianrun Wind Power Co., Ltd
    Boli Double Star Wind Power Development Co., Ltd.
    Tongyu Fuhui Wind Energy Co., Ltd.
    Beijing Xingqiyuan Energy Conservation Technology Co., Ltd.
    Sunite Youqi Tianrunlong Wind Power Co., Ltd.
    Yichun Taiyangfeng New Energy Co., Ltd.
    Urumqi Tianrun Wind Power Co.,Ltd
    Chifeng Huifeng New Energy Co., Ltd.
    Chifeng Tianrun Xinneng New Energy Co., Ltd.
    TianRun Uilk,
    LLC
    Uilk Wind Farm
    LLC
    TianRun USA, Inc. 75.0% 97.0%
    Changjiang
    New Energy
    Development
    Co., Ltd.
    100.0%
    Damao Qi Tianrun Wind Power Co., Ltd.
    Tacheng Tianrun New Energy Co., Ltd.
    Qianguo Fuhui Wind Energy Co., Ltd.
    Xinjiang
    Wind Power Research
    Centre
    100.0%
    SASAC
    Jiangsu
    Goldwind
    Wind Power
    Equipment
    Manufacture
    Co., Ltd.
    Urumchi
    Goldwind
    Tianyi
    Wind Power
    Co., Ltd.
    Beijing
    Goldwind
    Tiantong
    Import and
    Export
    Trading
    Co., Ltd.
    Xi'an
    Goldwind
    Science &
    Technology
    Co., Ltd.
    Nanjing
    Goldwind
    Science &
    Technology
    Co., Ltd.
    Goldwind
    USA, Inc
    Goldwind
    Australia
    Pty Ltd.
    Tianrun
    Wind Power
    (Beijing)
    Logistics
    Co., Ltd.
    Beijing
    Tianrun
    New Energy
    Investment
    Co., Ltd.(8)
    Xinjiang
    Tianyun
    Wind Power
    Equipment
    Distribution
    Co., Ltd.
    (7)
    Beijing
    Goldwind
    Science &
    Creation
    Wind Power
    Equipment
    Co., Ltd.
    (1)
    Inner
    Mongolia
    Goldwind
    Science &
    Technology
    Co., Ltd.(2)
    Gansu
    Goldwind
    Wind Power
    Equipment
    Manufacture
    Co., Ltd.(3)
    Goldwind
    Windenergy
    GmbH(4)
    Beijing
    Techwin
    Electric
    Co., Ltd.(5)
    Beijing
    Tianyuan
    Science &
    Creation
    Wind Power
    Technology
    Co., Ltd.
    (6)
    (4)
    (10)
    – 86 –
    OUR HISTORY AND CORPORATE STRUCTURENote:
    (1) Beijing Goldwind Science & Creation Wind Power Equipment Co., Ltd. is a wholly owned and principal operating subsidiary of our
    Company and its principal business is the manufacture and sale of wind power equipment and components.
    (2) Inner Mongolia Goldwind Science & Technology Co., Ltd. is a wholly owned and principal operating subsidiary of our Company and its
    principal business is the manufacture and sale of wind power equipment and components.
    (3) Gansu Goldwind Wind Power Equipment Manufacture Co., Ltd. is a wholly owned and principal operating subsidiary of our Company
    and its principal business is the manufacture and sale of wind power equipment and components.
    (4) Goldwind Windenergy GmbH is a wholly owned and principal operating subsidiary of our Company and its principal business is
    investment holding; Vensys Energy AG is a subsidiary of Goldwind Windenergy GmbH and its principal business is the provision of
    technical services and manufacture and sale of wind power equipment and components.
    (5) Beijing Techwin Electric Co., Ltd. is a non-wholly owned and principal operating subsidiary of our Company and its principal business is
    the manufacture and sale of wind power components.
    (6) Beijing Tianyuan Science & CreationWind Power Technology Co., Ltd. is a non-wholly owned and principal operating subsidiary of our
    Company and its principal business is the provision of wind farm construction and technical services and sale of wind power components.
    The shareholding structure of Beijing Tianyuan is as follows:
    Name of Shareholder
    Approx. % of
    shareholding
    Wang Hai ( ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.44
    Yang Jian ( ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.22
    Cao Lian Shan ( ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.78
    Wu Yu Zhu ( ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.33
    Cai Rui Gang ( ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.27
    Wang Jing ( ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.00
    Wu Jun ( ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.11
    Zou Jian Ming ( ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.11
    Liu Xiang ( ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.89
    Song Jian Jun ( ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.11
    Zhang Zhen ( ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.67
    Lu Xiao Yong ( ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.78
    Wang Xin Ju ( ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.96
    Our Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83.33
    Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0
    (7) Xinjiang Tianyun Wind Power Equipment Distribution Co., Ltd. is a wholly owned and principal operating subsidiary of our Company
    and its principal business is transportation.
    (8) Beijing Tianrun New Energy Investment Co., Ltd. is a wholly owned and principal operating subsidiary of our Company and its principal
    business is wind farm investment, development and sales.
    (9) The shareholders of China Water Investment Co., Ltd are
    Name of Shareholder
    Approx. % of
    shareholding
    Bureau of Comprehensive Development of Ministry of Water Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.875
    Sinohydro Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33.125
    China Water Affairs Group Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.375
    Shanxi Wanjiazhai Yin Huang Project Parent Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.25
    Inner Mongolia Energy Power Investment Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5
    Zhejiang DY-Link Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.625
    China Institute of Water Resources and Hydropower Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.625
    Beijing Neng Da Power Investment Co., Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.625
    (10) The shareholding structure of Uilk Wind Farm LLC is:
    Name of Shareholder
    Approx. % of
    shareholding
    Tianrun Uilk, LLC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
    Uilk Wind I, LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
    Uilk Wind II, LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
    Uilk Wind III, LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
    Please see the appendix entitled “Appendix IX— Statutory and General Information” to this prospectus for details of our other non-wholly
    owned subsidiaries with shareholders holding more than 10% equity interests.
    – 87 –
    OUR HISTORY AND CORPORATE STRUCTUREThe following chart sets out our shareholding structure and our principal subsidiaries immediately after
    completion of the Global Offering on the assumption that the Over-allotment Option has not been exercised, the
    A Shares have not been transferred to NSSF according to the Transfer Measures and there is no change in the
    shareholding of our A Shares other than the conversion and transfer of state-owned Shares to the NSSF:
    Xinjiang
    Changyuan
    Water Group
    Ltd.
    Xinjiang Wind
    Power Co., Ltd.
    China Water
    Resources
    Investment
    Group Company
    China-Belgium
    Direct Equity
    Investment Fund
    Shenzhen
    Yuanjing Xinfeng
    Investment
    Consultation
    Co., Ltd.
    Shenzhen Yuanjing
    Xinneng
    Investment
    Consultation Co.,
    Ltd.
    Shenzhen
    Yuanfeng
    Investment Co.,
    Ltd.
    Directors and
    senior
    management
    Other H Shares
    Shareholders
    Other A Shares
    Shareholders
    Xinjiang Goldwind Science & Technology Co., Ltd.
    Vensys
    Energy AG
    Vensys
    Elektrotechnik
    GmbH
    14.8% 12.8%
    17.7%
    9.4%
    38.9%
    33.9%
    100.0%
    100%
    6.1% 3.7% 1.7% 1.5% 0.1%
    100.0%
    100.0%
    100.0%
    3.7% 39.1% 16.5%(1)
    100.0% 100.0% 75.0% 83.3% 100.0% 100.0%
    100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
    China Three Gorges
    SASAC
    70.0%
    90.0%
    90.0% 51.0% 100.0% 66.0% 51.0% 56.0% 51.0% 51.0% 100.0% 100.0% 100.0% 100.0% 100.0% 51.0% 100.0% 100.0% 100.0% 51.0%100.0%
    Xianghuang Qi Tianrun Wind Power Co., Ltd.
    Inner Mongolia Bayannur Fuhui Wind Energy Electricity Co., Ltd.
    Tacheng Tianrun Wind Power Co., Ltd.
    Buerjin Tianrun Wind Power Co., Ltd.
    Shangdu Tianrun Wind Power Co., Ltd.
    Hami Tianrun New Energy Co., Ltd.
    Guazhou Tianrun Wind Power Co., Ltd
    Boli Double Star Wind Power Development Co., Ltd.
    Tongyu Fuhui Wind Energy Co., Ltd.
    Beijing Xingqiyuan Energy Conservation Technology Co., Ltd.
    Sunite Youqi Tianrunlong Wind Power Co., Ltd.
    Yichun Taiyangfeng New Energy Co., Ltd.
    Urumqi Tianrun Wind Power Co.,Ltd
    Chifeng Huifeng New Energy Co., Ltd.
    Chifeng Tianrun Xinneng New Energy Co., Ltd.
    TianRun Uilk,
    LLC
    U ilk Wind Farm
    LLC
    TianRun USA, Inc. 75.0% 97.0%
    Changjiang
    New Energy
    Development
    Co., Ltd.
    100.0%
    Damao Qi Tianrun Wind Power Co., Ltd.
    Tacheng Tianrun New Energy Co., Ltd.
    Qianguo Fuhui Wind Energy Co., Ltd.
    Xinjiang
    Wind Power Research
    Centre
    Beijing
    Goldwind
    Science &
    Creation
    Wind Power
    Equipment
    Co., Ltd.
    Inner
    Mongolia
    Goldwind
    Science &
    Technology
    Co., Ltd.
    Gansu
    Goldwind
    Wind Power
    Equipment
    Manufacture
    Co., Ltd.
    Goldwind
    Windenergy
    GmbH
    Beijing
    Techwin
    Electric
    Co., Ltd.
    Beijing
    Tianyuan
    Science &
    Creation
    Wind Power
    Technology
    Co., Ltd.
    Xinjiang
    Tianyun
    Wind Power
    Equipment
    Distribution
    Co., Ltd.
    Beijing
    Tianrun
    New Energy
    Investment
    Co., Ltd.
    Tianrun
    Wind Power
    (Beijing)
    Logistics
    Co., Ltd.
    Goldwind
    Australia
    Pty Ltd.
    Goldwind
    USA, Inc
    Nanjing
    Goldwind
    Science &
    Technology
    Co., Ltd.
    Xi'an
    Goldwind
    Science &
    Technology
    Co., Ltd.
    Beijing
    Goldwind
    Tiantong
    Import and
    Export
    Trading
    Co., Ltd.
    Urumchi
    Goldwind
    Tianyi
    Wind Power
    Co., Ltd.
    Jiangsu
    Goldwind
    Wind Power
    Equipment
    Manufacture
    Co., Ltd.
    China Water
    Investment
    Co., Ltd
    Xinjiang
    SASAC
    40% 60%
    (1) Includes an approximate 1.5% shareholding interest held by NSSF
    – 88 –
    OUR HISTORY AND CORPORATE STRUCTUREMilestones in our History
    We have achieved the following important milestones in our development into a leading WTG manufacturer:
    1998 XJ New Wind was established.
    We commenced the development of our 600 kW WTGs on the basis of technologies originally licensed
    from suppliers in Germany and then through adaptation, further development, integration and
    innovation of such technologies. Please see the subsection entitled “Business — R&D—Product
    Technology R&D” in this prospectus for more details.
    Our first domestically-made 600 kW WTGs successfully commenced operation in Dabancheng,
    Xinjiang.
    1999 The 600 kW WTGs localization project passed the joint examination and inspection conducted by the
    MOST and Xinjiang Science Bureau. The assessment opinion concluded that such R&D work was the
    first of its kind in China and considered technologically advanced. The project was respectively given
    the Xinjiang Science and Technology Advancement First Prize Award and the PRC Science and
    Technology Advancement Second Prize Award.
    2000 Our products began to be sold in the PRC market.
    2001 Our Company was established as a joint stock limited liability company upon completion of the
    restructuring.
    We began to develop our 750 kW WTGs.
    2002 Our production base in Urumqi, Xinjiang was completed and commenced operation with an annual
    production capacity of 200 units of 600 kWand 750 kW WTGs, which were launched on the market in
    batches.
    2004 We won the bid for the first wind power concession project of the PRC.
    We obtained approval from the MOST for the establishment of our “National Wind Power Engineering
    Technology Research Centre”.
    2005 Our 1.2 MW WTG models commenced operation in the wind farm at Dabancheng, Xinjiang.
    2006 The World Wind Energy Association awarded the “2006 World Wind Energy Award” to our Company
    and our Chairman, Mr. Wu Gang in recognition of our contribution to the development of the
    international wind power industry.
    Based on our accumulated installed capacity of WTGs in 2006, we were ranked tenth amongst global
    WTG manufacturers.
    We won the bid for the wind power project in Guanting, Beijing, becoming the green power supplier for
    the Beijing Olympics.
    We were ranked seventh amongst “100 Chinese Companies toWatch in 2007” by Forbes Magazine and
    rated as one of the companies with the greatest growth potential in China.
    2007 The A Shares were listed on the SZSE.
    We shifted to independent development of our products and key technologies, and began sales of our
    1.5 MW WTG product.
    We manufactured Asia’s first offshore 1.5 MW direct-drive permanent magnet WTG, which was
    installed in Bohai Bay, PRC.
    We completed the establishment of our nationwide production and service network in China.
    – 89 –
    OUR HISTORY AND CORPORATE STRUCTURE2008 Our market share based on accumulated installed capacity was ranked first among WTG manufacturers
    in the PRC for three consecutive years.
    We successfully acquired German-based Vensys AG, which owned the advanced direct-drive
    technology and launched its 1.5 MW WTGs in the European market.
    We commenced international sales of our products, primarily targeting markets in the United States,
    Australia and Europe. Please see the subsection entitled “Business— Sales and Marketing —Overseas
    Business” in this prospectus for more details.
    2009 Our newly-developed 2.5 MWand 3.0 MW WTG prototypes were produced and achieved successful
    grid connection.
    – 90 –
    OUR HISTORY AND CORPORATE STRUCTUREBUSINESS
    OVERVIEW
    We are a leading manufacturer of wind turbine generators and provider of complete wind power solutions in
    China. Our primary business is WTG R&D, manufacturing and sales. We also engage in the provision of
    comprehensive wind power services and the development of wind farms for sale to wind farm operators and
    investors. As an enterprise with one of the longest track records in the PRC wind power equipment manufacturing
    industry, we possess substantial technical expertise, strong independent R&D capabilities, and have successfully
    introduced innovative leading edge wind turbine technologies to the PRC market. Most of our core management
    team have specialized in wind power for many years, and possess significant industry experience in wind energy
    development and operation, giving us a deep understanding of our client base and their operational needs. Our
    comprehensive quality assurance system and after-sales service operations have also contributed to achieving our
    dominant market position. According to the International Wind Energy Development — World Market Update
    published by BTM, the accumulated installed capacity of WTGs manufactured by us reached 5.3 GW as of
    December 31, 2009, representing a market share in the PRC of approximately 21%. In 2009, our market share in the
    PRC in terms of newly installed capacity increased approximately 2 percentage points as compared to the previous
    year to approximately 20%, ranking us the fifth largest WTG manufacturer globally and the second largest in the
    PRC. The WWEA awarded us the World Wind Energy Award 2006 for our contribution to the development of the
    international wind power industry.
    k For our WTG R&D, manufacturing and sales business, we focus on the research, design, manufacturing
    and sales of premium quality WTGs with high efficiency and availability. Our main product is currently
    the 1.5 MW direct-drive permanent magnet WTG, and we also produce the 750 kW stall-regulated
    WTG. Throughout our corporate history, our customers have primarily been China’s large power
    producers and other enterprises investing in renewable energy, and our products and services have been
    sold across the PRC, with over 5,800 of our WTGs installed in 19 of China’s provinces as of March 31,
    2010. Apart from our business in the domestic market, we have also embarked on sales of our WTGs in
    international markets. For the three years ended December 31, 2007, 2008 and 2009, the revenue
    generated from our WTG R&D, manufacturing and sales business segment was RMB3,079.2 million,
    RMB6,299.3 million and RMB10,347.4 million, respectively, and accounted for 99.7%, 98.2% and
    97.0% of our total revenue.
    k For our wind power services business, we offer customers a complete range of services covering the
    whole process of developing a wind farm project, from preliminary investment consultancy and preconstruction
    project services such as feasibility studies and wind measurement, to project construction
    services such as EPC contracting, to post-construction operation and maintenance services such as
    equipment servicing and wind farm operation and maintenance. As of March 31, 2010, we had provided
    preliminary investment consultancy and pre-construction services for 275 projects, project construction
    services for 123 wind farms, and post-construction operation and maintenance services for 72 wind
    farms with total installed capacity of 4,129.1 MW. For the three years ended December 31, 2007, 2008
    and 2009, the revenue generated from our wind power services business segment was RMB9.8 million,
    RMB29.5 million and RMB215.4 million, respectively, and accounted for 0.3%, 0.4% and 2.0% of our
    total revenue.
    k For our wind farm investment, development and sales business, we are able to provide wind farm
    operators and investors completed wind farms that we have invested in and developed, and equipped
    with our WTGs. As of March 31, 2010, we developed 14 wind farms with total installed capacity of
    628.5 MWand attributable installed capacity of 471.5 MW, of which four completed wind farms were
    – 91 –sold.We generate income from sale of equity interests in the project companies we set up to develop the
    wind farms, and income from such sale is recorded under other income and gains. During the Track
    Record Period, income from sale of completed wind farms was nil, RMB263.1 million and
    RMB189.8 million, respectively. For our completed wind farms yet to be sold, we put them into
    operation and generate revenue from the tariffs received from the power generated. As of March 31,
    2010, we have two completed wind farms yet to be sold. For the three years ended December 31, 2007,
    2008 and 2009, our revenue for this business segment was nil, RMB88.5 million and RMB103.7 million,
    respectively, and accounted for 0.0%, 1.4% and 1.0% of our total revenue.
    We have strategically leveraged the depth of our R&D and manufacturing, services and wind farm
    development capabilities to achieve synergies among our three business segments and formed an advanced
    model as a provider of complete solutions covering multiple aspects of the wind power industry value chain. No
    other PRC WTG manufacturer is engaged in the provision of complete wind power solutions on a scale similar to
    ours.
    Our main product technology is the direct-drive permanent magnet full-power rectification technology, which
    holds four significant advantages over other wind turbine technologies, namely high efficiency, high reliability,
    superior grid connectivity and low spare parts and consumable materials requirements.We believe these advantages
    are greatly valued by our customers and the power grids for whom they generate electricity. We have successfully
    introduced our specialized wind turbine series, which adopt this technology and are efficiently adapted to the PRC’s
    diverse operating conditions, including low and high temperatures, high altitude, low wind velocity and coastal
    areas.
    We possess a comprehensive technology development system and have established three R&D centers in
    Beijing and Urumqi, PRC and Neunkirchen, Germany, where the headquarters of our subsidiary, Vensys AG, is
    based, with specialized research teams that focus on developing next generation technology and product
    improvements. We are also engaged in the in-house design and manufacture of core parts and components.
    This reduces our production cost and also enables us to obtain independent rights for key wind turbine technologies.
    We have completed the design and production of our 2.5 MW direct-drive permanent magnet WTG and 3.0 MW
    hybrid-drive WTG prototypes and achieved successful grid connection. Our 5.0 MW WTG is currently under
    development. We independently developed ourMW-level WTGs through extensive R&D activities focused on our
    advanced direct-drive permanent magnet full-power rectification technology, whereas most Chinese WTG
    manufacturers generally acquire wind turbine technologies through licensing. The strength of our R&D
    capabilities is further evidenced by our ownership of six proprietary technologies, 25 patents, and 39 pending
    patents as of the Latest Practicable Date. In addition to achieving widespread customer acceptance, we have been
    called upon by the relevant PRC authorities to lead the drafting of eight national and local wind power industry
    technical standards, and are currently involved in the drafting of a further three such national standards.
    We undertook an initial public offering and listing of our A shares on the SZSE in 2007. During the Track
    Record Period, we have experienced significant growth in revenues and maintained good profitability. For the three
    years ended December 31, 2007, 2008 and 2009, our revenue was RMB3,089.0 million, RMB6,417.3 million and
    RMB10,666.5 million, respectively, and our profit attributable to owners of our Company was RMB624.6 million,
    RMB906.4 million and RMB1,745.6 million, respectively, growing at a CAGR of 85.8% and 67.2%, between 2007
    and 2009, respectively. During the same period, our sales volume of WTGs was 754.5 MW, 1,372.5 MW and
    2,035.5 MW, respectively, growing at a CAGR of 64.3% between 2007 and 2009.
    – 92 –
    BUSINESSOUR COMPETITIVE STRENGTHS
    We are a leader in the PRC WTG manufacturing industry with extensive sector experience, and have played
    an active role in the rapid growth of China’s wind power market.
    We are a leading WTG manufacturer in the PRC, one of the largest and most rapidly growing wind power
    markets globally. The accumulated installed capacity of WTGs manufactured by us reached 5.3 GW as of
    December 31, 2009, representing a market share in the PRC of approximately 21%. In 2009, our market share in the
    PRC in terms of newly installed capacity increased approximately 2 percentage points as compared to the previous
    year to approximately 20%, ranking us the fifth largest WTG manufacturer globally and the second largest in the
    PRC. Over 5,800 WTGs manufactured by us have been deployed in 19 of China’s provinces under diverse operating
    conditions as of March 31, 2010.
    As one of the PRC’s pioneers in the wind power industry, our R&D, operations and service teams have
    accrued significant experience in designing, manufacturing and operating WTGs as well as developing and
    constructing wind farms across the PRC. This enables us to provide our customers with timely, integrated solutions
    covering multiple aspects of the wind power industry chain. We believe we are an important partner to our
    customers, which include the PRC’s largest power producers, due to the high quality and performance of our WTGs,
    and our ability to assist customers with many aspects of the wind power industry value chain.
    We possess superior technology and strong independent R&D, design and product development capabilities.
    Our state-of-the-art technology and strong R&D capabilities are key to our market leading position in the
    PRC. Our main product is the 1.5 MW direct-drive permanent magnet WTG, which adopts the direct-drive
    permanent magnet full-power rectification technology. This technology holds significant advantages over other
    wind turbine technologies such as higher efficiency, higher reliability, superior grid connectivity and lower spare
    parts and consumable materials requirements. Most Chinese WTG manufacturers generally acquire WTG
    technologies through licensing, however, we independently developed our MW-level WTGs. We have also
    launched the widest product range among all PRC WTG manufacturers. These series are adapted to the
    diverse operating conditions in the PRC, including low and high temperatures, high altitude, low wind velocity
    and coastal areas. We believe our WTGs built on these technologies will continue to experience wide market
    acceptance and will continue to grow in market share.
    Our professional R&D team has extensive wind power industry experience and a comprehensive combination
    of knowledge and expertise, and combined with our establishment of a superior technology development platform,
    makes us well-equipped to carry out development work. Our R&D centers in Beijing and Urumqi, PRC and at our
    Vensys AG headquarters in Neunkirchen, Germany, with specialized research teams, focus on continuously
    improving our technologies and products for adaptation to different operating environments and timely meeting of
    customer needs using the latest technologies. Our R&D work includes research on key specialized wind turbine
    technologies such as high-power permanent magnet generator technology, transmission technology, control
    strategy, electric control technology and grid connectivity technology. Further development of these
    technologies will improve the performance and reliability of our WTGs. In addition, we also possess in-house
    design capabilities for core parts and components. Mass production of our independently-designed converter,
    variable pitch and master control systems will commence in 2010.We have complete testing measures in place for
    parts and components and assembled WTG units to ensure the high quality of our WTGs.
    We believe the combination of our established technology and production capabilities, enhanced through our
    acquisition of German-based Vensys AG in 2008, results in continuous improvements in our direct-drive permanent
    – 93 –
    BUSINESSmagnet full-power rectification technology, and enables our products to maintain a leading position in the PRC
    wind power industry and enter global markets.
    We have an advanced business model as a provider of complete wind power solutions and continue to discover
    new value along the entire wind power industry value chain.
    We have in place an advanced business model as a complete wind power solutions provider with our marketleading
    WTG R&D, manufacturing and sales business segment at the core, fully complemented by our two other
    businesses: wind power services and wind farm investment, development and sales. This enables us to benefit from
    multiple aspects of the wind power industry value chain. Leveraging our extensive experience in designing and
    manufacturing WTGs, as well as constructing wind farms in the PRC, we not only are able to provide customers
    with high quality WTGs, but also have developed a complete suite of wind power services and wind farm
    development solutions, allowing us to meet our customers’ needs in multiple aspects of the wind power industry
    value chain.
    Our comprehensive portfolio of wind power services includes preliminary investment consultancy and
    project services, project construction services and post-construction operation and maintenance services. Our
    service teams ensure fast, timely and tailored servicing of our WTGs to provide superior WTG availability for our
    customers and also provide services needed at every stage of a wind farm project to assist customers with
    developing more efficient wind farms. Our integrated business model also allows us to apply our industry
    experience and technical expertise to all aspects of wind farm design and construction — from wind
    measurement, filing of the relevant governmental applications, project planning and construction and
    installation of WTGs to operation of the wind farm —enabling us to develop cost-efficient wind farms. This
    allows us not only to provide wind farm operators and investors with completed wind farms but also obtain income
    from electricity generated.
    The synergies achieved between our three business segments are significant. The provision of wind power
    services allows us to cultivate existing and potential customer relationships which benefits our WTG R&D,
    manufacturing and sales business. Our manufacturing industry background and experience in operation and
    maintenance services have assisted our wind farm investment, development and sales business. Our wind farm
    investment, development and sales business has also contributed to an increase in our WTG sales, and according to
    these customers’ needs, our operational and maintenance teams will also provide wind power services. This creates
    new attractive sources of profit growth for us and contributes to enhancing our market position.
    We are able to provide customers with comprehensive, timely and efficient after-sales services.
    We offer our customers comprehensive service through the integration of our service, logistics and technical
    support units to ensure the high availability of our WTGs.We believe the quality of after-sales services we provide
    have made our WTGs among the best performers in the PRC market, resulting in our wide customer acceptance and
    leading market position. Our 12 service centers form a nationwide service and spare parts supply network to ensure
    prompt customer response time, with engineers generally arriving at customer sites within 12 hours of customer
    requests and maintenance or replacement of conventional spare parts occurring generally within 24 hours. To ensure
    that first-rate services are provided to customers, and to ensure the service level and technical competency of the
    field service personnel, we carry out personnel training, assessment and certification. Field service personnel with
    appropriate technical certification are allocated to each project site based on the actual technical requirements of the
    project. In addition, we have also developed and implemented the SCADA system for our customers to centrally
    monitor and compile statistics on the operation of our WTGs. We use all of the foregoing to develop the best
    – 94 –
    BUSINESSoperational solutions and the most suitable maintenance measures, allowing us to provide superior service to our
    customers.
    We have strong capabilities to design and manufacture core components in-house and optimize our supply chain,
    enabling us to reduce cost of production while assuring quality.
    We have developed independent in-house design and manufacturing capabilities for certain core parts and
    components, which, combined with the optimization of our supply chain, enables us to reduce our cost of sales and
    ensure timely delivery of our products to customers. We believe we have realized significant cost savings through
    our research, design and manufacture of core parts and components, such as the converters, variable pitch and
    master control systems for our WTGs. As we fully oversee the entire design and production process of such
    customized parts and components, we are also able to more effectively implement quality control systems and
    ensure product quality while controlling costs.
    Traditionally our industry has faced several supply chain-related challenges, with frequent difficulties related
    to timely supply of high-quality parts and components. We have attempted to address these issues by committing
    significant R&D, operations and quality control personnel to develop reliable suppliers and strengthen our
    relationships with key suppliers. Our teams work together with these suppliers to effectively leverage their
    respective expertise and advantages, ensure their quality and technical specifications meet our standards, and better
    control our parts and components’ costs. Further, we have established a quality control system encompassing our
    entire design and production process through supervising the design and manufacturing process of our suppliers,
    allowing us to realize efficient control of our parts and components costs. The resulting close relationship from such
    mutual cooperation provides a secure supply chain for our business, which enables us to effectively control our
    production costs and achieve higher cost efficiency for our customers.
    We have an experienced management team, and are continuously recruiting new talent.
    Our senior management, core operations, strategic planning and investment management personnel were
    some of China’s first professionals to enter the wind power field, most of whom have specialized in wind power for
    many years and have been with us since our incorporation. Their deep familiarity with the development of the PRC
    wind power industry, the evolution of WTG technologies, design and manufacturing of core parts and components,
    wind power services as well as their extensive experience in developing and operating wind farms, including the
    then largest wind farm in Asia at Dabancheng, Xinjiang in 1989, are essential to our long term success. Our
    operations teams in all of our business segments are led by professionals with significant experience in their fields.
    In addition, many members of our senior management team have technical backgrounds and extensive experience
    in enterprise management.
    Mr. Wu Gang, our chairman and chief executive officer, has more than 22 years of experience in the wind
    power industry and currently is the deputy director of the Chinese Renewable Energy Industries Association. He
    was awarded the World Wind Energy Award in 2006 for his leadership of our Group in contributing to the
    development of the international wind power industry. His vision have been critical to our growth, making us a
    leading enterprise in China’s WTG manufacturing industry.
    Our active, open corporate culture and accelerated pace of growth have attracted international and domestic
    talent to join us and enrich our management and operation teams.We believe this advantage will continue to attract
    new talent for us and be significant for maintaining our technological superiority, expanding our market share and
    increasing our profitability in the future.
    – 95 –
    BUSINESSOUR STRATEGIES
    We seek to maintain and further enhance our position in the business of WTG R&D, manufacturing and sales,
    continue to be a leading provider of complete wind power solutions, expand our business globally and create
    maximum customer value. Our specific strategies are as follows:
    Maintain and enhance market leading position in China.
    We are a leading WTG manufacturer in the PRC. We seek to grow our customer base while servicing our
    existing major clients, which include the PRC’s large power producers and other enterprises investing in renewable
    energy. Their participation in the PRC wind power market has grown rapidly in recent years and this is expected to
    continue given the gradual depletion of traditional fossil fuel energy sources, progressive maturity of the renewable
    energy industry and policy support of the PRC Government. We believe that our customers most value the high
    efficiency and availability of our WTGs, and we are committed to continually improving the performance of our
    WTGs and providing new and advanced WTG models, which are cost efficient and tailored to their specific needs.
    We also seek to maintain and increase sales to our existing customer base through providing after-sales and valueadded
    services suited to their specific needs and fully demonstrating their value to our customers.
    We will also continue to fully leverage our extensive experience, ability to provide integrated solutions
    covering multiple aspects of the wind power industry value chain to our existing and new customers, and a
    management team with strong strategic vision and execution abilities to further enhance our leading market share in
    China. We are also in the process of establishing more production facilities and strategically expanding our
    production capacity in regions with abundant wind resources to support our customers as they develop these
    markets, or concentration of component suppliers, such as our construction of new production bases in Dafeng and
    Nanjing, Jiangsu province, and Xi’an, Shaanxi province, PRC. Through providing our customers with more
    advanced WTG products, high-quality comprehensive services and integrated solutions, and a reasonable
    distribution of production capacity to meet our customers’ needs, we believe we will be able to increase our
    sales in the PRC and maintain our leading market position.
    Continue to focus on technology and product innovation to develop more advanced WTGs.
    We believe that our superior R&D abilities and focus on technology and product innovation will continue to
    drive our success. We intend to research and develop our next generation products, while delivering our currently
    dominant products, to provide an innovative product line based on our detailed analysis of market needs. We are
    committed to developing WTGs with higher efficiency and reliability, better climate adaptability and greater cost
    efficiency. To that end, we will continue to introduce more advanced WTG series customized for optimum
    performance under diverse operating conditions.We have also developed larger WTGs. Specifically, the prototypes
    of our 2.5MWdirect-drive permanent magnet WTG and 3.0MWhybrid-drive WTG have achieved successful grid
    connection and will begin commercial production in 2010. Further, we are also developing our 5.0 MW WTG
    model. Offshore wind farm deployment of our WTGs is also a driving focus of our innovation, with our 1.5 MW,
    2.5MW, 3.0MWand 5.0MWWTGs all being able to be used at sea.We have also committed significant resources
    to refining the development, operation and maintenance of offshore WTGs in anticipation of servicing this growing
    market segment.
    We will continue to increase our R&D efforts, with our technological innovation mainly focusing on key
    specialized WTG technologies, including permanent magnet generator technology, transmission technology,
    control strategy, electric control technology and grid connectivity technology. We will further refine our R&D
    operation mechanism to better stimulate our technical personnel’s potential and facilitate their development. In
    – 96 –
    BUSINESSaddition to expanding our R&D centers in Beijing and Urumqi, PRC and Neunkirchen, Germany, where the
    headquarters of our subsidiary, Vensys AG, is based, we will continue to engage in technology exchanges and
    partnerships with leading domestic and international academic institutions and industry groups. Through leveraging
    our R&D base in Germany, we seek to better understand the adoption of cutting edge European wind technology to
    the PRC WTG market, and continue to keep our R&D team at the forefront of global WTG technology.
    Continuously reduce costs and further optimize our supply chain.
    We will continue to strive to reduce costs through investment in cost control measures and optimization of our
    supply chain. We intend to (i) expand the scale of our sales, sourcing and operations so as to achieve greater
    economies of scale, (ii) lower transportation costs through maintaining better geographic distribution of our
    production bases, (iii) further strengthen our in-house design and manufacturing capabilities for certain core parts
    and components, such as our construction of a new production base in Beijing, PRC to manufacture electric control
    systems, (iv) continue to implement stringent quality control measures and effectively reduce costs incurred due to
    product defects and technical malfunctions, and (v) strengthen management capabilities to increase operational
    efficiency, including management of our supply chain.
    Further, we will continue to maintain close relationships with our suppliers and cooperate with high-quality
    suppliers in the PRC and globally to ensure the stability, quality and cost-effectiveness of our parts and components
    supply chain. As with our production bases, our new manufacturing facilities and facilities under construction are
    located in close proximity to major parts and components suppliers or marketing regions under development, thus
    lowering our logistics costs. Capital investments in, and joint ventures with, some of our suppliers are also used to
    bring us closer to our suppliers and their management. We believe the continuous fostering of mutually beneficial
    relationships with our suppliers is a competitive advantage, and can contribute to enterprise innovation and mutual
    growth. We will continue to increase the cost efficiency achieved by optimization of our supply chain through
    effective cost control measures and good supplier relationship management.
    Actively grow our wind power services and wind farm investment, development and sales businesses.
    We believe our wind power services and wind farm investment, development and sales businesses represent
    new sources of profit growth with great potential for us, and the synergies between them and our WTG R&D,
    manufacturing and sales business make our products and services more attractive to our customers. As such, we
    intend to expand these businesses to maximize customer value. In light of market demand and public support for
    renewable energy, PRC power producers and other investors are rapidly entering the renewable energy markets, and
    in particular the wind power market. BTM predicts that the accumulated installed capacity of WTGs in the PRC will
    realize a CAGR of 32.3% from 25.9 GW in 2009 to 104.9 GW in 2014. As a result, we believe that there is
    significant growth potential for our wind power services business, which will in the long term provide us a
    competitive advantage both in the PRC and overseas markets. We intend to improve our existing services and
    develop new value-added services such as maintenance services for parts and components and advisory services.
    We will also continue with the localization of our services to provide our customers with reliable support, ensuring
    that their needs are attended to in the shortest time possible.
    We have accumulated expertise in all aspects of the development, construction, operation and maintenance of
    wind farms in the PRC. As investment and development of wind farms require a certain level of professional
    expertise, the construction cycle of wind farm projects is lengthy and the risk of unsuccessful development exists,
    some wind power investors prefer to obtain completed wind farms ready for operation. Recognizing the
    corresponding potential for our wind farm investment, development and sales business, our senior management
    – 97 –
    BUSINESShas fully leveraged our internal resources, our WTG R&D, design and product development capabilities, our ability
    to provide professional operation and maintenance services and external strategic partnerships to further expand
    and explore more opportunities in wind farm investment and cooperation with investors. We intend to continue
    actively promoting these services to our existing and new customers. As a result, we expect these new attractive
    revenue streams to contribute to our growth in the future.
    Expand into attractive international markets.
    Besides maintaining our domestic market share, we seek to expand our operations globally into attractive
    international markets. Our target markets are the United States, Australia and Europe: the United States is currently
    the largest wind power market in the world, Australia possesses high growth potential, and Europe is a developed
    and growing market that allows us to fully leverage our subsidiary, Vensys AG’s existing advantages for market
    penetration. We believe the growth opportunities in the United States, Australia and Europe are significant, given
    the public and policy support for renewable energy in those regions. BTMestimates that CAGR of installed capacity
    of WTGs in the United States, Australia and Europe from 2009 to 2014 will be 23.3%, 22.4% and 16.7%,
    respectively.
    Our initial efforts abroad have included establishment of production facilities, sales offices and service
    networks in Germany, the United States and Australia for manufacturing and sales of our WTGs and development of
    wind farm projects. We have successfully completed a wind farm project in the United States, and are actively
    pursuing other potential projects. We have established a production base at the headquarters of our subsidiary,
    Vensys AG in Neunkirchen, Germany and began sales of our products in Europe. We have also dispatched
    management teams to these regions to understand market conditions, and have set up a dedicated team responsible
    for the long-term development of our international business. We are also actively participating in foreign aid
    projects organized by the PRC Government. Our international expansion presents opportunities to increase the
    market for our existing WTG models, and we expect this expansion may involve the establishment or acquisition of
    further production facilities overseas. With our product, technology and cost advantages, we believe that our
    overseas expansion can be successfully achieved.
    OUR BUSINESS SEGMENTS
    Our business segments consist of (i) WTG R&D, manufacturing and sales, (ii) wind power services, and
    (iii) wind farm investment, development and sales. As of March 31, 2010, there are over 5,800 of our WTGs
    installed in China, we had provided preliminary investment consultancy and pre-construction services for
    275 projects, project construction services for 123 wind farms, and post-construction operation and
    maintenance services for 72 wind farms with total installed capacity of 4,129.1 MW, and the total installed
    capacity and attributable installed capacity of wind farm projects developed by us was 628.5 MWand 471.5 MW,
    respectively.
    WTG R&D, MANUFACTURING AND SALES
    Our focus is on the research, design and manufacturing of premium quality WTGs with high efficiency and
    availability. We have accumulated substantial experience in developing the PRC wind power market, and we
    believe that we have derived significant competitive strengths in terms of R&D, production process technology and
    quality of our wind turbine products and services. Our products and services coverage extends over 19 provinces in
    the PRC, and according to BTM, the accumulated installed capacity of WTGs manufactured by us as of
    December 31, 2009 was approximately 5.3 GW with a market share of approximately 21%.
    – 98 –
    BUSINESSWe recognize revenue for this business segment from the sale of individual WTGs as well as spare parts sales,
    when the significant risks and rewards of ownership have been transferred to the buyer. Our costs of sales in respect
    of this business segment consist mainly of raw materials and components for our WTGs, including blades,
    generators, structural parts and electric control systems. During the Track Record Period, our revenue from this
    business segment was RMB3,079.2 million, RMB6,299.3 million and RMB10,347.4 million, respectively,
    representing a CAGR of 83.3% for the same period. Please see the section entitled “Financial Information” in
    this prospectus for more details.
    Our Product Portfolio
    Our primary product range during the Track Record Period consisted of the 1.5 MW direct-drive permanent
    magnet WTG and the 750 kW stall-regulated WTG. Our products are fully adaptable and suitable for different
    geographical regions and climates, including high and low temperature, high altitude, low wind velocity and coastal
    areas.
    Since inception, we have developed seven distinct WTG product series, from 600 kW to 3.0 MW, using
    increasingly advanced technologies. Through our experience in product development, we have established a full
    team of R&D and operations personnel with a deep understanding of WTG technologies. The 1.5MWWTG series
    has become our main product although we still continue to sell our 750 kW WTG series. In November 2007, Asia’s
    first offshore 1.5MWdirect-drive permanent magnet WTG, which was manufactured by us, was installed in Bohai
    Bay, PRC.
    The following table sets out the technical specifications of our 1.5 MW WTGs and 750 kW WTGs.
    Product Category WTG Model
    Turbine Rotor
    Diameter
    (meter)
    Hub
    Height
    (meter) IEC Models (Type)
    1.5 MW WTG GW70/1500 70 65 I / II
    65
    GW77/1500 77 85 II / III
    GW82/1500 82 70 III
    85
    750 kW WTG GW48/750 48 50 I / II / S
    60 I/ II
    65 II
    GW50/750 50 50 I / II
    60 I / III
    65 II
    GW52/750 52 50 II
    GW50/750 (60hz) 50 50 II
    The table below sets out the sales details of our primary products during the Track Record Period.
    Installed capacity sold
    (MW)
    2007 2008 2009
    Year ended December 31,
    WTG
    1.5 MW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85.5 519.0 1,591.5
    750 kW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 669.0 853.5 444.0
    Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 754.5 1,372.5 2,035.5
    – 99 –
    BUSINESSWe have also completed the design and production of our 2.5MWand 3.0MWWTG prototypes, which have
    achieved successful grid connection. We are developing our 5.0 MW WTG. We expect to begin commercial
    production of our 2.5MWand 3.0MWWTGs during 2010. Please see the subsection below entitled “— R&D” for
    details on our 2.5 MW, 3.0 MW and 5.0 MW WTGs.
    WTG Design and Development
    We have comprehensive wind turbine design and development capabilities and own numerous proprietary
    technologies and patents, which we have leveraged through our history to develop seven distinct series of WTGs.
    We believe we are a leading large-scale PRC WTG manufacturer capable of independently developing new and
    advanced models of WTGs. Our main product technology is the direct-drive permanent magnet full-power
    rectification technology. Through our extensive research and design experience, we have developed our current
    series of high-performance wind turbines, and further enhanced their ability to operate in diverse geographic
    regions of the PRC.
    Direct-Drive Permanent Magnet Full-Power Rectification Technology
    Direct-drive permanent magnet full-power rectification technology consists of a wind-driven turbine rotor
    turning a permanent magnet synchronous generator, which does not require a gearbox to operate. The generator
    produces alternating current which is delivered to the grid via AC-DC-AC conversion by a full-power converter. The
    key advantages of the direct-drive permanent magnet full-power rectification technology are:
    High efficiency — Unlike double-fed turbines, direct-drive wind turbines eliminate the gearbox
    component, which reduces transmission loss and allows higher generation
    levels, especially at low wind velocities. Permanent magnet technology
    further improves efficiency.
    High reliability — Gearboxes have a relatively higher operational failure rate. The direct-drive
    technology eliminates the gearbox component and its ancillary parts, and
    simplifies the transmission structure, thereby ensuring higher reliability. The
    WTG also has considerably fewer moving parts when in operation at low speed,
    which increases its reliability.
    Superior grid
    connectivity
    — Wind turbines may trip off-line in the event of major grid disturbances, but with
    the low-voltage ride through (LVRT) capability, WTGs adopting the directdrive
    permanent magnet full-power rectification technology are able to stay
    connected to the grid during such grid disturbances, and can also easily perform
    the functions of active power control and reactive power control, thus better
    fulfilling grid requirements.
    Low spare parts and
    consumable materials
    requirements
    — Gearless direct-drive technology reduces the number of WTG parts and
    components and eliminates costs associated with gearbox oil replacement,
    which lowers operation and maintenance costs considerably.
    – 100 –
    BUSINESSSeries Design
    To keep pace with the rapid growth of the wind power market and to meet the requirements of the relevant
    market segments, we focus on developing WTGs suited to diverse geographical and climate conditions. Since our
    inception, we have created and introduced a wide range of WTG models under our customised series, which are
    adapted for diverse operating conditions including low and high temperatures, high altitude, low wind velocity and
    coastal areas:
    High temperature — Designed with improvements to the cooling and radiation capabilities of the
    wind turbine’s components and sub-systems. Use of a self-regulating system
    enables the cooling system to continue functioning in the event of a wind turbine
    system failure without the need for a cooling fan or pump.
    Low temperature — Designed for sub-zero environments of -20 to -40 degrees Celsius through the
    selection of suitable mechanical parts and materials, blade structure, lubrication
    system, electric control system, and materials for protecting components.
    High altitude — Designed for areas with altitudes of over 2,000 meters through improvements in
    blade length, cooling and insulation of the electric control system and the motor,
    prevention of turbine corrosion and moisture resistance.
    Low wind velocity — Designed with a larger wind wheel diameter for higher energy capture ability as
    well as optimized control strategy and other complementary solutions to ensure
    operation at low wind velocity.
    Coastal — Designed for use in humid, high-salt areas with focus on prevention of salt
    corrosion, electrical protection and insulation. Improvements were made to the
    structural designs of the wind turbine and relevant parts and components and
    special anti-corrosion solutions were applied to the easily-corrodible
    components.
    We own several proprietary technologies relating to WTG control strategy and systems. In addition, we have
    developed a self-adaptive turbine activation and cut-off control strategy which is able to identify the environmental
    conditions and technical factors in different operating terrains and self-tune the model parameters intelligently to
    optimize energy capture.
    Design and Manufacture of Core Parts and Components
    In order to optimize our WTGs, reduce reliance on upstream suppliers, and control costs effectively, we also
    concentrate on continuous enhancement of our R&D, design and manufacturing capabilities for certain core parts
    and components of WTGs, including electric control systems and generators, to ensure the quality and stability of
    the supply of our core parts and components.
    Electric Control System
    Along with advances in wind power technology and the gradual increase in wind turbine capacity, control
    technology is becoming a pivotal element for large wind turbines. In view of the complex operating conditions of
    WTGs, the design performance, reliability and stability of the electric control system are major factors affecting the
    wind turbine’s efficiency.
    – 101 –
    BUSINESSThe electric control system in our MW-level WTGs generally comprises a master control system, converter
    system and variable pitch system, as illustrated in the diagram below. Our 750 kW WTG model operates with a
    master control system only.
    Converter system
    Master control
    system
    Variable
    pitch
    system
    Generator
    The generator plays the important role in a WTG of converting mechanical energy into electrical energy. In
    comparison to a conventional generator, the permanent magnet generator used in our direct-drive WTGs does not
    require an exciter and the elimination of excitation loss results in a higher efficiency. Further, the high magnetic
    energy of the rare-earth permanent magnet materials enables a reduction in the weight of the generator.
    We own or have applied for multiple patents in magnetic poles arrangements and the cooling and shaft
    designs of the external generator rotor for the 1.5 MW WTGs. The unique seal design of our generator for the first
    1.5 MW offshore WTG in Asia, which was manufactured by us in 2007, has ensured its stable operation since
    installation. Our next product, the 2.5 MW generator, possesses all the advantages of the existing 1.5 MW directdrive
    permanent magnet synchronous generator with enhanced features such as higher power density, outstanding
    sealing performance, high reliability and lower weight to unit capacity ratio, and is able to operate in severe weather
    conditions.
    Production
    Production Facilities
    In addition to our headquarters and production base in Urumqi, Xinjiang, we operate several other production
    bases located in Beijing, Inner Mongolia and Gansu provinces in the PRC and an overseas base in Germany through
    our subsidiaries. As of December 31, 2009, the total gross floor area of our production bases was 101,596.4 square
    meters. In addition, we have set up integrated assembly plants in Chengde, Hebei province and Yinchuan, Ningxia
    province through an associate company and consignment manufacturing by a third party to supplement our
    production capacity.
    – 102 –
    BUSINESSThe geographic distribution of our production bases is primarily driven by the surrounding target markets, and
    they are generally located in close proximity to areas with abundant wind resources and concentration of parts and
    components suppliers. Our production bases currently cover most of the significant PRC wind power markets. We
    have also established strategic supply-chain relationships so as to directly source critical parts and components from
    suppliers near our production bases. We believe this further reduces our costs, enhances our production control
    ability and increases our market competitiveness. The following table sets forth certain basic information relating to
    each production facility as of December 31, 2009:
    Production base Products
    Production
    commencement
    Annual capacity as
    of December 31,
    2009(1)
    Available gross floor
    area as of
    December 31,
    2009
    (sq.m)
    Phase I, Urumqi, Xinjiang 750 kW WTG, turbine
    rotor and nacelle for
    1.5 MW WTG
    2002 500 units of 750 kW
    WTGs, 300 units of
    turbine rotor and nacelle
    19,410.1
    Phase II Urumqi, Xinjiang 1.5 MW WTG 2008 600 units 12,646.5
    Beijing, China 1.5 MW WTG 2007 900 units 42,041.4
    Baotou, Inner Mongolia 1.5 MW WTG 2008 900 units 12,370.5
    Jiuquan, Gansu Turbine rotor and nacelle
    for 1.5 MW WTG
    2009 800 units of turbine rotor
    and nacelle
    6,058.9
    Chengde, Hebei(2) 750 kW WTG, turbine
    rotor and nacelle for
    1.5 MW WTG
    2004 500 units of 750 kW
    WTGs, 600 units of
    turbine rotor and nacelle
    —
    Yinchuan, Ningxia(3) 750 kW WTG, turbine
    rotor and nacelle for
    1.5 MW WTG
    2006 500 units of 750 kW
    WTGs, 500 units of
    turbine rotor and nacelle
    —
    Neunkirchen, Germany 1.5 MW WTG 2009 100 units 9,069.0
    Notes:
    (1) Our production capacity may differ in accordance with changes in product mix.
    (2) Assembly plant established through our associate company.
    (3) Assembly plant established through our consignment manufacturing arrangements with a third party local enterprise, Ningxia Tianjing
    Power Equipment Co., Ltd., for exclusive production and assembling of certain components for our 1.5MWWTGs. Under the consignment
    manufacturing contract, which is for a term of one year to be renewed annually, they exclusively produce these components under our direct
    supervision in accordance with our technical specifications and quality standards.
    Our production capacity for our main product, the 1.5MWWTG was 1,500 units as at the beginning of 2009
    and for most of the year ended December 31, 2009. Subsequently in the last quarter of 2009, we realized an annual
    production capacity of 2,500 units of 1.5 MW WTGs, as part of our strategy to meet the estimated demand for our
    1.5 MW WTGs in 2010. In 2009, we produced 1,391 units of 1.5 MW WTGs.
    We also had an annual production capacity of 1,500 units of 750 kW WTGs, which was achieved before the
    1.5 MW WTG became our main product in 2009. Due to our switch in our product focus and also a decrease in
    demand for the 750 kW WTG given new models such as our 1.5 MW WTG, we intend to gradually use the spare
    production capacity of 750kW WTGs for manufacturing certain components for our 1.5 MW WTGs and future
    WTG products. In 2009, we produced 782 units of 750 kW WTGs.
    – 103 –
    BUSINESSWe are currently constructing new production bases in Xi’an, Shaanxi province, Nanjing and Dafeng, Jiangsu
    province, and Beijing, PRC. The following table sets forth certain basic information relating to each of these four
    production bases as of December 31, 2009.
    Production
    base
    under
    construction Products
    Target annual
    capacity
    Current
    Status
    Estimated
    production
    commencement
    Cost incurred
    (RMB in million)
    Cost to
    completion
    (RMB in million)
    Source of
    Funding
    Xi’an,
    Shaanxi
    1.5 MW
    WTG
    and its
    generator
    200 units
    of 1.5 MW
    WTGs and
    1000 units
    of generators
    Trial
    production
    2010 33.1 85.9 Internal
    funds
    Nanjing,
    Jiangsu
    3.0 MW
    WTG
    100 units Construction
    design and
    planning
    2011 25.1 490.9 Internal
    funds and
    proceeds
    from the
    Global
    Offering
    Dafeng,
    Jiangsu
    Turbine rotor
    and nacelle
    for MW-level
    WTG
    300 units Commenced
    construction
    2010 0.2 104.8 Internal
    funds
    Beijing, PRC Electric
    control
    system for
    MW-level
    WTG
    3,000 units Commenced
    construction
    2010 43.0 597.0 Internal
    funds and
    proceeds
    from the
    Global
    Offering
    We expect our annual production capacity to increase to over 3,000 units of MW-level WTGs with sufficient
    supply capacity of core components for our WTGs by the end of 2010. Of the approximate 40.2% of our net
    proceeds from the Global Offering to be used for construction of production bases and optimization of our business
    operations, 20.4% will be allocated to construction of our new production facilities. Among the new construction
    bases, the Xi’an and Nanjing production bases are designed to manufacture WTGs while the remaining are all
    designed to manufacture core components of WTGs. The Nanjing production base is intended to manufacture
    3.0 MW WTGs mainly for offshore deployment, which is an important strategic step for our Group to enlarge our
    offshore WTG production capacity since market demand for offshore WTGs is expected to increase significantly.
    The Joint Sponsors are of the view that the above business plan is in line with our development strategies.
    As of December 31, 2009, the total number of our manufacturing employees was 796. These employees
    undergo regular training and job rotations to ensure a complete understanding of our products and manufacturing
    processes.
    Production Planning
    We formulate an overall annual production plan for each year based on factors such as the expected demand
    for wind turbines, projected delivery of parts and components, the response time of the supply chain, and the
    projected progress of each wind farm project to ensure the timely performance of supply contracts and contractual
    delivery schedule of our wind turbine products. This production plan is subject to rolling adjustments in accordance
    with the actual conditions of supply and demand of wind turbines and parts and components, and construction
    progress of our customers’ wind farm projects.
    – 104 –
    BUSINESSProduction Process
    Our production process is described below:
    Generator
    Pasting of magnet steel
    Installation of main axis
    Installation of generator rotors
    Connecting stator and fixed axis
    Installation of
    large and small bearings
    Installation of moving axis
    Cleaning of generator rotors
    Testing of generator mode
    Ex-factory inspection
    Hub
    Installation of pitch bearing
    Installation of pitch drive
    Ex-factory inspection
    Installation of pitch control system
    Installation of dome
    Testing of pitch system
    Installation of hub
    Installation of yaw brake
    Installation of inner platform
    Installation of lower platform
    Installation of
    hydraulic lubrication system
    Installation of upper platform
    Installation of electric control system
    Installation of yaw bearing
    Ex-factory inspection
    Installation of yaw drive
    Installation of nacelle
    Ex-factory testing
    WTG delivery
    Installation of base
    Base structure
    – 105 –
    BUSINESSOur WTGs are transported from our production facilities to customers’ sites for product delivery, following
    which installation of the WTGs will be arranged by our customers while we provide technical guidance.
    Sales and Marketing
    Overview
    Our WTGs are sold through direct sales to a relatively specific and concentrated customer base. Our PRC
    customers are primarily large- and medium-sized power producers and renewable energy investors. We have
    established a marketing department and a sales department with a sales force of 77 employees, many of whom have
    technical backgrounds and extensive industry experience.
    The sales department is directly responsible for sales and customer management and maintenance. Based on
    the nature of our customers’ business and their operating markets, we carry out large customer management and
    geographical customer management. Our major customers include the five major power producers in the PRC and
    other enterprises investing in renewable energy. Each major customer has a specially-appointed service team who
    manages sales orders and provides long-term direct-sales services across all geographical regions.
    Our marketing department consists of three units, namely, business development, market analysis and
    research and technical support. These units are mainly responsible for researching PRC domestic and overseas
    industry policies, market development and competition. They also formulate our sales and marketing strategies,
    coordinate bidding work, provide technical sales support and plan marketing activities, which include promotional
    events in relation to our products and services, publicity efforts, initiating contact with potential customers and
    strengthening relationships with existing customers and clients.
    Our Sales Model
    We obtain orders through tender bids, which comprise concession projects and non-concession projects.
    Concession projects are those for which the PRC Government organizes the bidding to select the wind farm
    developer and the WTG manufacturer, whereas bidding for non-concession projects are organized by wind farm
    developers. Otherwise, non-concession projects and concession projects generally do not differ in terms of pricing,
    credit policy, product warranty, payment schedule and other relevant contractual obligations. Our basic selection
    criteria for projects to bid on includes (1) the suitability of our WTGs to the environmental and climatic
    characteristics of the project area; (2) our ability to meet the requirements specified in the clauses of the
    bidding documents such as the construction period, terms of payment, warranty and penalties; (3) the financial
    condition and credit worthiness of the tenderer; and (4) the extent to which the tenderer recognizes and accepts us
    and our products. As our business has grown, we have encouraged our marketing department to focus their efforts
    on bids for larger orders. For each year of the Track Record Period, our sales revenue from concession projects and
    non-concession projects accounted for 17.0%, 20.2% and 27.5%, and 83.0%, 79.8% and 72.5% of our WTG sales
    revenue, respectively. We estimate that as of March 31, 2010, we had orders on hand for our WTGs totalling
    3,349.5 MW.
    Pricing Policy
    Our pricing policy for each bid or sales contract is primarily competition driven, with primary consideration
    given to production costs and project return.
    – 106 –
    BUSINESSCredit Policy
    Our credit policy towards customers varies for each of our business segments, but for our core business of
    sales of WTGs, we generally grant contractual credit terms of around three months.
    Our WTG contractual payment schedule is generally as follows:
    k Prepayment: 10% to 15% of contract price
    k Progress payment: 20% to 40% of contract price
    k Delivery of products: 35% to 60% of contract price
    k Preliminary inspection: 10% of contract price
    Product Warranty
    We provide comprehensive product warranties for our WTGs, and all sales contracts contain appropriate
    warranty clauses. After preliminary inspection, we will normally provide a letter of guarantee issued by a bank
    amounting to up to 5% of the total contract price to our customer against fulfilment of our warranty obligation, who
    may request payment from the bank in the event our obligation is not met. Historically, retention monies were
    retained by our customers to secure our performance of obligations during the warranty period, however, we have
    gradually changed our policy to provide our customers letters of guarantee. The warranty period of our products is
    generally 24 months from the day on which the preliminary inspection certificate is issued, and in a few instances,
    the warranty period may be 30 to 60 months. Generally, main product warranty clauses in our contracts include:
    guarantee of the WTG’s stable operation in line with the contractual technical specifications and warranty
    guidelines stated therein, the actual measured power curve should be equal to or exceed 95% of the specified
    power curve, and the average availability of the WTGs shall not be less than 95%. During the warranty period, we
    are accountable for any problems associated with wind turbine defects, operation problems or below-standard
    performance. If our WTGs do not satisfy the specific performance standards as set out in the contract during the
    warranty period, customers may also claim against us for a penalty sum in accordance with the relevant contractual
    provisions.
    During the Track Record Period, there was an increase in the amount of our product quality warranty
    provisions, mainly due to the significant increase in our product sales and the change in our product mix sold. Our
    main product sold was the 750kW WTG in 2007 and the 1.5MW WTG in 2009, respectively. Due to complicated
    structure and more expensive raw materials and components of the 1.5MW WTG, the estimated expenses related to
    the maintenance and repair of the 1.5MW WTG are higher than those of the 750kW WTG. In addition, we made a
    more sufficient provision in 2009 for the total expenses related to the warranty maintenance and repairs of the
    1.5MW WTGs sold, based on the actual maintenance and repair expenses incurred for the 1.5MW WTGs sold in the
    previous two years, and made further product quality warranty provisions for 1.5MW WTGs sold in previous years.
    As of March 31, 2010, our total amount of warranty provision outstanding was RMB490.8 million. For the
    three years ended December 31, 2007, 2008 and 2009, our amount of provision utilized was RMB7.9 million,
    RMB34.0 million and RMB153.4 million, respectively. Our Directors are of the view that we have made adequate
    provisions for product quality warranties.
    Geographical Distribution
    We divide our sales network into four main regions: (i) Inner Mongolia, (ii) Northeast China, (iii) North
    China, and (iv) Northwest and South China. The PRC’s development of wind resources is currently concentrated in
    the northern and coastal regions, and the grid infrastructure and connection issues experienced in the northern
    – 107 –
    BUSINESSregion have impacted the market to some extent. Although the northern region continues to be a focus area for us,
    we are also keen to explore markets in the southern region as its existing grid system is relatively sound and has
    greater wind power development potential. Our wind turbine products are highly competitive in quality and
    performance, and our advanced capabilities in leading proprietary technologies serve as strong support for our
    market expansion. We also plan to increase efforts to develop our sales network in inland areas, including
    Shandong, Jiangsu and Shanxi provinces.
    Overseas Business
    Although our overseas operations are newly established and at a relatively early development stage, based on
    our current strategy, our international target markets are primarily the United States, Australia and Europe. Our
    German subsidiary, Vensys AG has launched its 1.5 MW WTGs in the European market and is our primary sales
    channel for Europe.We have set up branches in the United States and Australia to recruit international talent for our
    overseas business development, and have organized experienced sales teams to travel to the United States and
    Australia to conduct marketing activities and meet with wind power developers for discussion on collaboration
    opportunities. We have carefully studied the obstacles likely to be faced when entering a foreign wind power
    market, in particular, the lack of a track record in the market, and we have decided to invest in demonstration wind
    farm projects in our target markets as part of our sales strategy to display our capabilities, introduce our products
    and start building a track record in those markets. Also, in certain markets, WTG manufacturers may be required to
    provide specific product warranties in order for the relevant wind farm developers to receive financing for their
    wind farm development projects. After careful consideration and where we believe necessary, we plan to offer
    warranties in line with the requirements of financing providers in overseas markets, in order to develop our business
    successfully in these markets. Our international sales, which mainly comprised WTG and related component sales,
    commenced in 2008 and our grid-connected demonstration wind farm project in Minnesota, USA has commenced
    power generation and is managed by our U.S. subsidiary, TianRun USA. We are also actively participating in the
    PRC Government’s foreign aid projects and have won a bid for a project in Ethiopia. Through such participation, we
    have been able to accumulate valuable overseas market experience beneficial to our international expansion plans.
    After-sales services
    We firmly believe that providing customers with the most comprehensive and timely after-sales services is the
    key to remaining competitive.We have in place a stringent after-sales service system with high standards to ensure
    the quality of our services. Our customers generally enjoy warranty service periods of 24 months from the date on
    which the preliminary inspection certificate is issued, and in a few instances, the warranty periods may be 30 to
    60 months.We have also set up 12 service centers, forming a nationwide service and spare-part supply network, to
    assure our customers of minimum wind turbine downtime due to inadequate supply of spare parts and better serve
    their needs. Our service personnel are able to reach the customer’s wind farm within 12 hours and perform any
    required spare part replacement within 24 hours.
    During the warranty service period, we will appoint professional after-sales technical support personnel as
    stipulated in our contracts to provide after-sales services for our customers. Our aim is to offer our customers
    comprehensive service through the integration of our service, logistics and technical support units to ensure the
    availability of our WTGs.
    In addition, we also recommend the implementation of the SCADA system for our customers to enable
    remote monitoring and control of the operation of their WTGs. The management of our spare parts supply is
    separate from our wind turbine maintenance, and our maintenance staff is required to provide a detailed description
    – 108 –
    BUSINESSof the technical default and the relevant solution when requesting a particular spare part.We believe that through the
    SCADA system and audit, management and analysis of our spare parts utilization, we are better able to ascertain the
    maintenance and operational status of our WTGs, which enables us to provide our customers with better-tailored
    services and continuously improve our products.
    We intend to develop our after-sales services in line with the growth of our WTG R&D, manufacturing and
    sales business segment, and fund any development with working capital used for developing this business segment.
    WIND POWER SERVICES
    We provide a comprehensive portfolio of wind power services for customers through our subsidiary, Beijing
    Tianyuan, a professional wind power services company in the PRC. Our background in R&D and manufacturing as
    well as our experience in wind farm operation provides a distinct advantage to our service offerings.We localize our
    services, which enables us to increase technical content and better ensure fast response to customers’ needs. We
    offer a complete range of services from preliminary investment consultancy and pre-construction project services,
    project construction services to post-construction operation and maintenance services.
    We generate revenue primarily from services such as EPC contracting, logistics and maintenance. Revenue is
    recognized from the rendering of wind power services, when the agreed services are performed, provided over the
    term of the agreement. For EPC contracting services, we record revenue from the construction contracts, on the
    percentage of completion basis. Our costs of sales in respect of this business segment consist mainly of labor,
    including wages and salaries for our workers directly involved in the wind power services provided. During the
    Track Record Period, our revenues from this business segment were RMB9.8 million, RMB29.5 million and
    RMB215.4 million, respectively, representing a CAGR of 368.0% for the same period. Please see the section
    entitled “Financial Information” in this prospectus for more details.
    Our Services Portfolio
    We strive to create value for our customers by providing services covering the whole process of developing a
    wind farm project. Our wind power services can be divided into three categories as shown in the following diagram:
    Preliminary Investment Consultancy
    and Pre-Construction Project Service s
    ?Policy research, industry analysis
    ?Investment, CDM consultancy
    ?Project financing
    ?Wind farm design
    ?Feasibility study
    ?Macro/micro site selection
    ?Wind measurement
    ?Assessment of wind resources
    ?Turbine model selection
    Project Construction Services
    ?Basic structure design
    ?Tower construction
    supervision
    ?Engineering supervision
    ?Installation guidance
    ?Ramp-up and operation
    ?EPC contracting
    ?Logistics
    Post-Construction Operation and
    Maintenance Services
    ?Equipment servicing
    ?Wind farm operation and
    maintenance
    ?Spare parts support
    ?Training consultancy
    ?Project assessment
    ?Service software applications
    Wind Power Services
    As of December 31, 2009, we have a professional team of 889 service personnel. As of March 31, 2010, we
    had provided preliminary investment consultancy and pre-construction services for 275 projects, project
    construction services for 123 wind farms, and post-construction operation and maintenance services for 72
    wind farms with total installed capacity of 4,129.1 MW.
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    BUSINESSPreliminary Investment Consultancy and Pre-Construction Project Services
    Preliminary wind power investment consultancy services include policy research, industry analysis,
    investment consulting, project financing and CDM consulting. The majority of such work involves preparing
    relevant reports and communicating with our customers on our report results. Preliminary project services include
    feasibility studies, wind farm design, macro/micro site selection, wind measurement, wind resources assessment,
    and turbine model selection. Besides such paid consultancy work, we also provide customers complimentary
    general project investment advice, as it serves as an effective method to educate customers on wind power and
    develop the wind power market. Although preliminary services do not constitute a major source of profits from this
    business segment, they are able to create a large prospective market for sales of our WTGs and need for after-sales
    services which will form a continuous source of income for us. Moreover, the provision of such comprehensive
    preliminary services supports our efforts to expand overseas operations.
    Project Construction Services
    Although historically we have not provided installation services for our customers, we do provide project
    construction services such as basic structure design, tower construction supervision, engineering supervision,
    installation guidance, ramp-up and operation, and logistics. Furthermore, we have obtained the EPC contract
    qualification and are able to set up dedicated teams to undertake the construction of entire turnkey projects from
    equipment purchase, construction, installation and ramp-up to grid connection and power generation, thus
    providing customers with contracting services throughout the project construction period.
    To better serve our customers and lower our logistics costs, we established our wholly owned subsidiary, XJ
    Tianyun, in 2008 to provide transportation services for our WTGs. As our projects are spread across China, we
    contract with regional and local third-party logistics contractors for transportation vehicle fleets, an arrangement
    which allows us to fully utilize their expertise in certain routes and effectively lower our costs. We primarily use
    road transport, with railway and air transport as alternatives. During the transportation process, we take
    comprehensive protection measures including reinforcing the security of the transporting vehicle, assigning
    escort vehicles, and providing extensive staff training on safety measures.
    Post-Construction Operation and Maintenance Services
    Post-construction services mainly include operation and maintenance of wind farms, equipment servicing,
    spare parts support, training consultancy, project assessment and service software applications. We provide wind
    farm owners with operation and maintenance services and assign dedicated teams to customers’ sites to assist with
    the operation and maintenance work.We have established a wide service network that can offer customers fast and
    timely support, and provide maintenance and replacement of parts and components services for our products after
    the expiry of the warranty period. In addition, we conduct assessment of completed projects, provide staff training
    for wind farm owners, and provide technical consultancy services.
    In addition, we recommend customized SCADA remote monitoring systems to our customers so that they are
    able to remotely monitor and control their wind farm operations. The SCADA system we implement assists
    customers with unified monitoring and control over their WTGs and wind farms. The continuous data collection of
    all product failure issues through the SCADA system provides timely technical support analysis and guidance to
    onsite maintenance crews. Through analyzing the historical operational data collected through the SCADA system,
    technicians are able to issue early warnings on malfunctions and prevent problems before they occur. We believe
    this greatly reduces maintenance costs and the workload of on-site staff, and further minimizes the costs for our
    customers. As of March 31, 2010 our SCADA system covered 35 wind farms, with an accumulated installed
    capacity of 2,145.5 MW.
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    BUSINESSSales and Marketing
    Our services are provided via direct sales to our customers, including wind farm developers and operators as
    well as companies investing in wind power.We have a sales and marketing team comprising personnel with industry
    experience who are knowledgeable about wind farm projects. Our sales team also actively develops relationships
    with new customers through gradual introduction of our wind power services. We will typically provide general
    project investment advice to understand a client’s requirements and concerns, and then tailor our services offering to
    their needs.
    WIND FARM INVESTMENT, DEVELOPMENT AND SALES
    We are able to provide wind farm operators and investors with completed wind farms that we have invested in
    and developed, and equipped with our WTGs. Leveraging our competitive strengths in R&D, WTG manufacturing
    and provision of comprehensive wind power services, we believe that we offer our customers maximum value for
    their wind farm investment. This business segment effectively creates for us a new source of profit with strong
    growth potential and also contributes to the sales of our WTGs and wind power services, thereby enhancing our
    overall market position.
    We develop and selectively sell our completed wind farms when appropriate in view of the then prevailing
    market conditions, and we put them into operation prior to sale, which generates revenue from power generation.
    We do not intend to hold our completed wind farms as long-term investment. Our wind farms in operation are
    managed by the specialized and experienced service personnel of our subsidiary, Beijing Tianyuan.
    We generate income from sale of equity interests in the project companies we set up to develop the wind
    farms, and income from such sale is recorded under other income and gains. During the Track Record Period,
    income from sale of completed wind farms was nil, RMB263.1 million and RMB189.8 million, respectively. We
    generate revenue from the tariffs received from the power generated by these wind farms prior to sale, which is
    determined based on the volume of electric power transmitted and the applicable fixed tariff rates. Our costs of sales
    in respect of this business segment consist mainly of depreciation costs and operational costs. During the Track
    Record Period, our revenue for this business segment was nil, RMB88.5 million and RMB103.7 million,
    respectively. Please see the section entitled “Financial Information” in this prospectus for more details.
    Wind Farm Project Investment and Development
    We adopt a flexible model for our investment in and development of wind farms, which is divided into
    independent development and joint development. For independent development, we will set up project companies
    in which we hold the entire equity interest and are responsible for the full development process from wind
    measurement, filing of project application to authorities, project construction, operation of the wind farm and sale to
    interested investors. For joint development, we cooperate with selected partners through jointly-owned project
    companies on the development process. As of March 31, 2010, the wind farms completed and sold by us had an
    approximate total installed capacity of 198.0 MW and attributable installed capacity of 125.2 MW, wind farms
    completed and put into operation had an approximate total installed capacity of 103.5MWand attributable installed
    capacity of 102.3MW, and wind farms under construction had an approximate total installed capacity of 327.0MW
    and attributable installed capacity of 244.0 MW.
    The estimated investment costs for a typical wind farm project with an installed capacity of 49.5MWamount
    to approximately RMB450.0 million comprising, among others, approximately 70% for WTG-related costs,
    approximately 15% for grid connection-related infrastructure, approximately 12% for construction and
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    BUSINESSapproximately 3% for other expenses. Generally speaking, approximately 80% of our capital expenditures in
    respect of our wind farm projects is financed by the relevant project companies through bank borrowings and the
    remaining approximate 20% through equity investments from us and other shareholders, if any, of the relevant
    project companies. Further, the financial impact of the capital expenditures related to our wind farm projects are the
    same as capital expenditures related to our other business segments, which is dependent on our ability to maintain
    adequate cash inflows to meet our committed capital expenditures and the related debt obligations. We also incur
    interest expenses for the capital expenditures funded by bank borrowings with interest rates usually at a 10%
    discount to the benchmark interest rates in China. Please see the section entitled “Financial Information” in this
    prospectus for more details.
    Our wind farm development procedure is as follows:
    Sign project development
    agreements with local
    authorities and formulate wind
    measurement plan
    Establish project company,
    apply to the PDRC(1) for and obtain
    preliminary work approvals
    Prepare feasibility study and
    relevant supporting documents
    Complete financing plan and
    obtain a certificate of capital
    contribution
    Install anemometer tower,
    commence wind measurement
    and surrounding wind
    resources data collection
    File application report on
    project with the PDRC(1)
    and obtain approval
    Upon obtaining project approval
    and relevant permits, invite
    bids for equipment, civil
    construction, and installation
    Award bids and commence
    project construction
    Officially commence
    operation and power
    generation
    Complete trial operation and
    apply for power generation
    business license
    Equipment installation and
    ramp-up
    Conduct on-site survey of the
    geographical features and mineral
    resources of the proposed development
    area to confirm the proposed
    development project
    Conduct in-depth analysis of the
    proposed development area’s
    topographical map and preliminary
    evaluation of wind resources
    Visit the local energy and climate
    authorities and finalize the proposed
    development area
    Organize target development areas in
    accordance with the public information
    on wind resources as well as activities
    of other wind-power developers
    Note:
    (1) “PDRC” means the Provincial Development and Reform Commission of the PRC.
    To control the quality of our wind farm projects, we have implemented internal control standards for project
    development to carefully check data used in designing wind farms, and adopted internationally-recognized software
    applications to analyze project costs and returns. We have also strengthened internal management of quotas and
    budgets to control project construction costs, and monitor the project process and implement project risk
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    BUSINESSmanagement. Moreover, we use SCADA remote management system for wind farms to ensure our assets’ operation
    and management meet international standards.
    Our Wind Farm Projects Portfolio
    As of March 31, 2010, we had 14 wind farms in our project portfolio, of which seven were completed and
    seven were under construction. Four of the seven completed projects have been sold.
    Completed Projects
    The following table shows projects we had completed as of March 31, 2010:
    Project Location
    Installed
    Capacity
    (MW)
    Effective
    Equity
    Interest
    (%)
    On-grid
    Tariff rate Status
    Wulate Zhongqi Tugurige Wind
    Farm Phase I(2)
    Inner Mongolia 49.5 51.0 RMB0.51/kWh Sold(1)
    Wulate Houqi Narenbaolige
    Wind Farm Phase I(3)
    Inner Mongolia 49.5 51.0 RMB0.51/kWh Sold(1)
    Keshiketengqi Wutao Hainan
    Wind Farm Phase I(4)
    Inner Mongolia 49.5 51.0 RMB0.54/kWh Sold(1)
    Tacheng Mayitasi Wind Farm
    Phase I(5)
    Xinjiang 49.5 100.0 RMB0.58/kWh Sold(1)
    Xinjiang Buerjin 49.5 MW
    Trial Demonstration Wind
    Farm
    Xinjiang 49.5 100.0 RMB0.58/kWh Operation
    Damao Qi Xinbaolige Wind
    Farm
    Inner Mongolia 49.5 100.0 RMB0.51/kWh Operation
    US Minnesota UILK project Minnesota, U.S. 4.5 72.8 US$0.064/kWh(6) Operation
    Notes:
    (1) The buyers of our four completed projects were Independent Third Parties of our Company.
    (2) This completed project was 100% owned by Bayannur Fuhui, which was held as to 51% by our wholly owned subsidiary, Beijing Tianrun.
    100% of the equity interest of this completed project was sold by Bayannur Fuhui in November 2008 for cash consideration of
    RMB233.0 million.
    (3) This completed project was 100% owned by Bayannur Fuhui, which was held as to 51% by our wholly owned subsidiary, Beijing Tianrun.
    100% of the equity interest of this completed project was sold by Bayannur Fuhui in November 2008 for cash consideration of
    RMB209.5 million.
    (4) This completed project was 51% owned by our wholly owned subsidiary, Beijing Tianrun. 49% of the equity interest of this completed
    project was sold in March 2009 for cash consideration of RMB90.4 million and the remaining 3% equity interest was sold in October 2009
    for cash consideration of RMB3.3 million.
    (5) This completed project was 100% owned by our former subsidiary, Tacheng Tianrun. 49% of the equity interest of this project was sold in
    October 2008 for cash consideration of RMB49.0 million and the remaining 51% equity interest was sold in November 2009 for cash
    consideration of RMB86.3 million.
    (6) This is based on the tariff rate for the first commercial operation year and will progressively increase for each subsequent commercial
    operation year in accordance with the agreed schedule as specified in the relevant contractual agreement.
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    BUSINESSProjects under Construction
    The following table shows our projects under construction as of March 31, 2010(1):
    Project Location
    Installed
    Capacity
    (MW)
    Equity
    Interest
    (%)
    Construction
    commencement
    Expected
    completion
    Shangdu County Jiqingliang
    Wind Farm Phase I
    Inner Mongolia 49.5 51.0 2008 July 2010
    Jiuquan Guazhou Liuyuan
    Trial Wind Farm
    Gansu 49.5 100.0 2009 July 2010
    Keshiketengqi Wutao Hainan
    Wind Farm Phase II
    Inner Mongolia 49.5 51.0 2009 August 2010
    Damao Guochan
    Demonstration Wind Farm
    Phase II
    Inner Mongolia 49.5 100.0 2009 August 2010
    Yichun Xinqing Laobai
    Mountain Wind Farm
    Phase I
    Heilongjiang 30.0 66.0 2009 October 2010
    Jilin Qianguo Wangfu
    Zhanfeng Wind Farm
    Jilin 49.5 51.0 2009 August 2011
    Tacheng Mayitasi Wind
    Farm Phase II
    Xinjiang 49.5 100.0 2010 November 2010
    Note:
    (1) As of April 30, 2010, we have added one more wind farm “Xingqiyuan ZhuriheWind Farm Phase I” to our projects under construction. The
    wind farm is located in Inner Mongolia, and has an installed capacity of 49.5 MW. We hold a 56% equity interest in this wind farm, for
    which we commenced construction in April 2010 and expect to complete in October 2010.
    We estimated our total capital expenditure for our seven projects under construction in the above table
    amounted to approximately RMB2,605 million, including capital expenditure to be incurred for completion of these
    projects of approximately RMB839 million as of March 31, 2010. We expect to finance such capital expenditure
    partially with internal funding and the remaining balance through bank borrowings.
    Wind Farm Sales
    Due to the professional expertise required for the development of a wind farm, long development cycle and
    the risk of unsuccessful development, many large PRC power producers and wind farm investors prefer to directly
    acquire completed wind farms from vendors such as us. We generally do not engage in sales and marketing
    activities for our completed wind farms projects as well as projects under construction. In view of the general
    scarcity of completed wind farms and due to our market reputation, potential buyers usually approach us for
    negotiations and we evaluate the terms of their offers carefully. For our remaining completed projects and our
    projects under construction, we have already engaged in negotiations with potential buyers. Moreover, in light of
    the overall high demand for wind farms, we have entered into various legally binding agreements with different
    power companies or investors who have committed to acquiring most of our wind farm projects. Given the
    foregoing, we believe there is no risk that these projects cannot be sold.
    When considering the sale of our completed wind farms, in addition to evaluation of the potential buyers and
    the terms of their offers, we will take into consideration various factors including the operational condition and
    performance of the completed projects, our development strategies, and whether it is in our commercial interest to
    sell the relevant completed project. Our wind farms can be sold by way of either full or partial share transfers of the
    – 114 –
    BUSINESSequity interest of the project companies. Large domestic power producers are our major target customers for full
    equity transfers as they generally do not accept non-controlling shareholdings of wind farms. For partial equity
    transfers, only a portion of the shares of the wind farm project company is transferred, and we retain the remaining
    equity interest.
    CUSTOMERS
    The majority of our sales are derived from the PRC domestic market and our customers are primarily large
    power producers and other enterprises investing in renewable energy. With an excellent product line-up and
    competitive advantage in services, we have established and maintained stable long-term relationships with our
    customers. Further, we have also provided certain customers with training, preliminary technical support and other
    services.
    The table below contains data regarding our five largest customers for the year ended December 31, 2009:
    Customer Main business
    Inner Mongolia Jingneng Wulanyiligeng Wind Power Co., Ltd. . . . . . . . . . . . . . . . . Wind power generation
    China Power Investment Northeast New Energy Development Co., Ltd. . . . . . . . . . . Energy and chemicals
    China Power Dafeng Wind Power Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wind power generation
    Huadian International Shandong Supplies Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . Wind power generation
    Hebei Weichang Longyuan Jiantou Wind Power Co., Ltd. . . . . . . . . . . . . . . . . . . . . Wind power generation
    For each year of the Track Record Period, sales to our five largest customers accounted for 39.9%, 37.7% and
    38.7%, respectively, of our total sales revenue, while sales to our largest customer accounted for 12.1%, 16.0% and
    14.4%, respectively, of our total sales revenue. As of December 31, 2009, none of the Directors, Supervisors, or their
    respective associates, or any Shareholders of our Company who, to the best of the Directors’ knowledge, owns 5%
    or more of our Company’s issued shares, has any interest in any of our five largest customers.
    Our relationships with our customers continue to be strong in 2010, and we have received and expect to
    continue to receive significant orders from our large customers, including affiliated companies of our five largest
    customers.
    SUPPLIERS
    We enjoy long-term relationships with our suppliers, including those in which we have invested. Due to the
    lack of suppliers in the PRC that can meet our technical specifications, we have dedicated significant resources to
    develop reliable suppliers such as providing training and labor resources to some of our suppliers. Our teams work
    closely with these suppliers to ensure that the quality and technical specifications of their parts and components
    meet our standards.We may also invest in some suppliers experiencing a sudden shortage of resources, or those that
    are in need of capital funding for long term growth, so as to ensure the stability and quality of our supply chain as
    well as better control our costs. As of December 31, 2009, we provided financial resources to several companies,
    including:
    k constructing a production facility, which is leased to LM Glasfiber (Xinjiang) Co., Ltd. to exclusively
    produce blades for our WTGs that we purchase at market price. The relevant construction costs were
    recorded under investment properties; and
    – 115 –
    BUSINESSk making equity investments of RMB7.0 million, RMB34.0 million, RMB17.5 million, RMB1.0 million
    and RMB1.0 million in China Water Xi’an(1), Jiangxi Jinli Mag Rare-Earth Co., Ltd.(2), Jiangsu
    Chenfeng New Material Technology Co., Ltd.(2), China Water Baotou(1) and Jiuquan Xinmao
    Technology Wind Power Equipment Co., Ltd.(3), respectively. We currently hold a 4.67%, 34%,
    35%, 5% and 5% equity interest in each of these five companies, respectively. All of these five
    companies are principally engaged in the production and sale of components and raw materials for
    wind power equipment.
    During the Track Record Period, the aggregate amount of purchases by us from the abovementioned suppliers
    was RMB37.4 million, RMB485.2 million and RMB873.0 million, respectively.We did not enjoy any preferential
    terms from these suppliers and do not have a formal investment policy in respect of such investments.
    We collaborate with external suppliers to manufacture most of our parts and components. These parts and
    components are manufactured based on our designs, drawings, technical parameters and quality standards. Our
    parts and components supply contracts generally include exclusivity clauses prohibiting sales of the same parts and
    components to our competitors. Please see the section entitled “Risk Factors —Risks Relating to Our Business—
    We may not be able to obtain timely and stable supply of the core parts and components required for our business” in
    this prospectus. The pool of suppliers for our requisite main parts and components is relatively concentrated. To
    further ensure a stable supply, we are actively enhancing our abilities to develop and manufacture certain core parts
    and components for our WTGs.
    We have signed short-term supply contracts of one to two years with our five largest suppliers. The main
    contractual clauses cover products supplied, contract price, payment terms, intellectual property rights, dispute
    settlement and termination. Payment is made in phases. For each year of the Track Record Period, purchases from
    our five largest suppliers accounted for 47.6%, 39.4% and 25.8%, respectively, of our total purchases, while
    purchases from our largest supplier accounted for 23.7%, 13.1% and 6.6%, respectively, of our total purchases.
    As of December 31, 2009, none of the Directors, Supervisors, or their respective associates, or any
    Shareholders of our Company, who, to the best of the Directors’ knowledge, owns 5% or more of our issued
    shares, has any interest in any of our five largest suppliers.
    PARTS AND COMPONENTS
    The core parts and components we source include blades, generators, electric control systems and structural
    parts. Externally purchased parts and components account for the majority of our operating costs. We also
    manufacture in-house certain of these core parts and components, of which some of the processing materials used to
    manufacture them are produced by external suppliers through consignment manufacturing arrangements. These
    consigned processing materials consist mainly of parts for generators and converters.
    Most of our parts and components are purchased from PRC domestic suppliers, and each part or component is
    sourced from at least three to five designated suppliers. As the purchase of parts and components represents a key
    element in our quality and cost control, we have established an internal management system for overall
    management of the sourcing procedures, including requests for purchasing materials, quotation, delivery
    – 116 –
    BUSINESS
    (1) China Water Xi’an and China Water Baotou are subsidiaries of China Water.
    (2) Jiangxi Jinli Mag Rare-Earth Co., Ltd. and Jiangsu Chenfeng New Material Technology Co., Ltd. are private companies.
    (3) Jiuquan Xinmao Technology Wind Power Equipment Co., Ltd. is a subsidiary of a company listed in the PRC.receipt, inspection, payment, supplier assessment and order maintenance. The primary purpose of this system is to
    control costs while ensuring high product quality.
    Inventory
    We have developed an inventory management policy and set inventory targets according to market conditions.
    We have also specified the control processes and supervisory procedures for all the stages in transportation and
    storage of parts and components. Our inventory mainly comprises bearings, cast structure parts, generator stators
    and generator rotor structure parts, and our inventory policy is based on our production plans and spare parts
    demand arising from project maintenance. It is not necessary for us to hold completed WTGs in inventory, as large
    wind power equipment is characteristically made-to-order. We do maintain an inventory of certain spare parts in
    anticipation of our customers’ needs during the warranty period and also to accommodate the 20-year lifespan of
    our WTGs. Inventory of other parts and components including those used in the production process will be
    maintained in accordance with monthly production plans.
    QUALITY ASSURANCE
    We have always focused on quality as a core competitive strength, and been committed to producing
    technologically-advanced and operationally stable WTGs of high quality.
    We have established and refined six main quality assurance systems as shown in the diagram below. These
    systems cover every aspect of our business from signing of the sales contract, product development and design,
    setting of product quality standards, supplier management and review, assembly, transportation and packaging of
    WTGs, installation and ramp-up during the wind farm project construction process, and after-sales operation and
    maintenance services:
    Quality Assurance
    Systems
    Supplier
    management
    and
    certification
    Assembled
    WTG quality
    supervision &
    control
    Product
    testing &
    control
    TQM quality
    review of
    suppliers
    Engineering
    personnel
    professional
    qualification
    system
    Product
    quality
    control
    standards
    Our quality control team presently consists of 131 employees, who are responsible for setting of quality
    standards, product testing and measurement, and quality promotion, process control and quality information
    management throughout the product lifespan. We have set up a supplier quality control team to carry out TQM
    quality review and control of the suppliers’ entire production process. We also have in place a team of quality
    control personnel to supervise the general assembly and production of complete WTGs and project sites. Further,
    we have set up an after-sales quality management unit to supervise the quality of our after-sales service team and
    build our service brand.
    In 2007, we established our testing and measurement center in Xi’an, which is equipped with a geometric
    laboratory and physiochemical testing laboratory, an experienced team of testing and measurement personnel, and
    advanced, precision equipment. Further, we conduct training and review of our engineers’ knowledge and skills
    through implementation of our professional qualification system. We have set up an expert consultancy system to
    – 117 –
    BUSINESShelp solve various technical and quality problems that arise during the design of parts and components, production
    processes, as well as during testing and inspection.
    We obtained the ISO 9001:2000 certification in October 2003 and the ISO 9001:2008 certification in
    December 2009.
    R&D
    Overview
    Our R&D activities have a history of more than ten years, and we have strong independent R&D capabilities.
    We have developed numerous series of WTG models which are adapted to the diverse operating conditions in the
    PRC. Our highly-regarded R&D team possesses considerable wind power industry experience and we have
    established a superior technology development platform. Most Chinese WTG manufacturers generally acquire
    wind turbine technologies through licensing, however, we independently developed our MW-level WTGs. Since
    our establishment, we have been committed to the development of new products, the upgrading of existing
    technologies, the meeting of changing market requirements, and the introduction of advanced international
    technologies into China. With our wealth of wind power industry experience, a deep understanding of the
    environmental and wind resource conditions in China, and through our continuous innovation and
    improvement of advanced technologies, we have accomplished significant achievements in WTG R&D. As a
    result, we believe our products and technologies have been able to maintain a leading position in the PRC wind
    power industry.
    Our main innovations are in the areas of the design of our WTGs, electric control systems, core mechanical
    parts and components as well as the design and manufacture of permanent magnet generators, converters and our
    performance testing and inspection capabilities.
    Please see the section entitled “Financial Information — Critical Accounting Policies — R&D costs” in this
    prospectus for our R&D expenditures during the Track Record Period.
    Structure of Our R&D Organization
    We have established R&D centers in Beijing and Urumqi, PRC and in Neunkirchen, Germany, each staffed
    with specialized teams to carry out studies on specific technical topics. In 2004, we were approved by MOST to set
    up China’s first national wind power engineering technology R&D center, which was subsequently officially
    recognized in 2008.
    As of December 31, 2009, our R&D team consists of more than 200 personnel, including 90 with more than
    five years of wind power experience, more than 190 with at least three years of wind power experience, eleven
    employees with PhDs and more than 90 with master’s degrees. OurR&Dsystem consists of nine departments, being
    Technology R&D, General Technology, Mechanical Design, Process Technology, Motor Technology, Testing
    Technology, Product Development, Pilot Development and Technical Support.
    We have set up a full-power performance testing laboratory at our Beijing production base as well as a
    complete WTG testing laboratory in Urumqi to facilitate product R&D, inspect and test our WTGs and their parts
    and components. Ground simulation of our WTGs and various tests on the control safety, electromagnetic
    compatibility, load control, permanent magnet generators and electric control systems as well as overall
    performance of our WTGs are carried out by these two testing laboratories.
    – 118 –
    BUSINESSThrough our R&D centers, we have developed a complete system from design, research, development and
    testing to the commencement of production and succeeded in building an integrated international/domestic R&D
    network.
    Our R&D Mechanism
    We have set up effective R&D operations so that we can mobilize our various resources in connection with
    any R&D project. Our R&D work is subject to project-based management, which consists of three stages: project
    establishment, mid-term review and final acceptance. To ensure successful implementation of the project and
    motivate team members from different departments, our project management policy provides for performancebased
    evaluations of team members.
    Moreover, we have established reward measures for on-the-job inventions and other technological
    advancements. Our R&D efforts are guided by a technical decision-making committee, which has established
    working rules for project selection and management. We believe these effectively create and promote a culture of
    innovation within our Group.
    Product Technology R&D
    Our development of product technologies has undergone three stages —from technology importation to joint
    development to independent development. We have continually emphasized enhancing independent R&D
    capabilities. We have also built a R&D system based on close collaboration with domestic and overseas
    scientific research institutions, design companies and parts and components suppliers.
    Our 600 kWand 750 kW stall-regulated WTG models were developed on the basis of technologies originally
    licensed from several suppliers in Germany and industrialized through adaptation of such technologies, further
    development, integration and innovation. There was no infringement of others’ intellectual property rights arising
    from or related to such licenses. Since 2002, we have built a long-term strategic partnership with the German design
    and engineering company, Vensys AG, to collaborate in the development of the 1.2MWand 1.5MWWTG models.
    Since 2007, we have shifted to independent development of our products. This shift resulted primarily in the
    development of key technologies comprising of our 1.5 MW direct-drive permanent magnet WTGs, development
    and design of the 2.5MWdirect-drive permanent magnet WTG model, and the 3.0MWand 5.0MWWTG models.
    In addition, we conducted an extensive study of key components such as the electric control system. In order to fully
    exploit the wind power technology research talent in Germany, in 2008 we acquired our German cooperative
    partner, Vensys AG, which enhanced our R&D capabilities and enabled our direct-drive technology products to
    enter the international market. As of the Latest Practicable Date, we have completed trial production of the 2.5MW
    and 3.0 MW wind turbine prototypes and the overall design of the 5.0 MW WTG model. We expect to commence
    commercial production of our 2.5MW and 3.0MW WTGs in 2010 while production of our 5.0MW WTG will
    depend on market conditions. We have also set up a project team focusing on the study of key technologies of
    offshore WTGs.
    Over the years, we have engaged in extensive cooperation with renowned international entities such as the UK
    design firm, Garrad Hassan, and the Netherlands-based design company, Mecal. Through continuous importation,
    assimilation and innovation of wind turbine technologies over the years, we have achieved significant R&D
    milestones. Apart from the primary innovations mentioned above, we have upgraded our main product from the
    initial 600 kW stall-regulated WTG model to the current 1.5 MW direct-drive permanent magnet WTG model.
    – 119 –
    BUSINESSMoreover, we own multiple proprietary technologies. Please see the subsection below entitled “Business —
    Intellectual Property” for more details.
    Participation in Developing National and Local Standards and Undertaking of Scientific Research Programs
    of the State
    During the Track Record Period, we have been inducted as a member of the National Wind Power
    Standardization Work Committee and played a leading role in drafting three national wind power standards
    and five local standards and are currently involved in the drafting of a further three such national standards.We have
    long been involved in many science and technology programs, including:
    k five national 863 programs;
    k two programs in the “11th Five-Year Science and Technology Support Projects”;
    k three 10th Five-Year Key Science and Technology Programs;
    k one 9th Five-Year Key Science and Technology Program;
    k three NDRC Scientific Research Programs;
    k five MOST programs;
    k two Ministry of Water Resources 948 programs; and
    k 23 Xinjiang scientific research programs, focusing on the R&D of direct-drive permanent magnet WTGs
    and their core parts and components as well as electric control systems of WTGs.
    Of the abovementioned programs, 30 have been completed while 14 programs were ongoing as of the Latest
    Practicable Date.
    INTELLECTUAL PROPERTY
    Intellectual property rights are essential for our business. In the PRC, we own two registered trademarks, 22
    patents and six proprietary technologies.We continue to apply for new patent rights in the PRC for the products and
    technologies we develop, and are currently applying for 34 patents, including 18 pending invention patents, and 41
    pending trademarks. We also own four registered trademarks in Hong Kong. In Germany, we registered four
    trademarks and three patents and are applying for five pending patents as well. Further, we own other intellectual
    property such as non-registered trade secrets, proprietary technologies, procedures and processes.
    We have taken the following measures to protect our intellectual property rights:
    k Signing of confidentiality agreements with suppliers to protect our trade secrets;
    k Signing of trade secret protection agreements with employees; and
    k Implementing the international registration and expanded-scope registration of our registered
    trademarks.
    More information about our intellectual property rights (including pending patents and trademarks) is set out
    in the appendix entitled “Appendix IX— Statutory and General Information —3. Further information about the
    Business” to this prospectus. As of the Latest Practicable Date, no lawsuit has been brought against us, nor have we
    initiated any lawsuits for intellectual property rights infringement.
    – 120 –
    BUSINESSEMPLOYEES
    As of December 31, 2009, we employed a total of 2,527 employees (including contract labor staff) which are
    classified as follows:
    Competency Number of Employees
    Percentage of the
    total number of
    employees (%)
    R&D and technical . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396 15.7
    Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 796 31.5
    Sales and marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 3.0
    Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 889 35.2
    Management and other administration . . . . . . . . . . . . . . . . . . . . . . . 291 11.5
    Finance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 3.1
    Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,527 100.0
    We have 2,408 employees (including contract labor staff) in the PRC and 119 overseas employees. For each
    year during the Track Record Period, our labor costs were approximately RMB121.8 million, RMB182.9 million
    and RMB254.4 million, respectively.
    We provide management personnel and employees with on-the-job education, training and other
    opportunities to improve their skills and knowledge. We sign individual employment agreements with our
    employees, covering, among other things, salaries, benefits, training, workplace safety and hygiene,
    confidentiality obligations relating to trade secrets and grounds for termination. The remuneration package of
    our employees includes salary, bonuses and allowances. Our employees also receive welfare benefits including
    medical care, housing subsidies, retirement and other miscellaneous benefits. To increase our competitiveness,
    attract and retain top talent, and better maximize value to our Shareholders, we intend to introduce and implement
    share incentive schemes as appropriate after the Listing, subject to approval by the relevant regulatory authorities
    and compliance with the Articles of Association and the Listing Rules.
    Our employees (excluding contract labor staff) are members of a trade union affiliated with the All China
    Federation of Trade Unions. As of the Latest Practicable Date, we have not experienced any major labor dispute or
    other labor disturbances that have interfered with our operations, and our employee relations are favorable.
    WELFARE CONTRIBUTIONS
    We must comply with PRC laws and regulations relating to social welfare, including the Interim Regulations
    Governing the Receiving and Payment of Social Security issued by the State Council, which establishes the basic
    measures for receiving pension payments, medical insurance payments and unemployment insurance payments.
    Also to be complied with are the Regulations Governing the Public Housing Reserves issued by the State Council,
    which sets out the regulations related to the public housing reserves contributed by employers and employees, and
    other laws and regulations related to social insurance such as work injury insurance and maternity insurance.
    In accordance with applicable Chinese regulations, we currently participate in social insurance contribution
    plans organized by the relevant local governments, under which we are required to pay in respect of each of our
    relevant employees a monthly contribution. The amount of contribution may vary depending on a number of factors,
    including the requirements of the relevant local government and the income of the employee. We currently provide
    employees with a pension insurance program, medical insurance program, unemployment insurance program,
    individual work injury program, maternity insurance contributions and employee public housing reserve
    – 121 –
    BUSINESScontributions. During the Track Record Period, the total amount of our contribution was approximately
    RMB11.8 million, RMB27.0 million, and RMB40.7 million, respectively.
    We believe we have complied with all applicable national, local and foreign laws and regulations relating to
    social welfare and have paid in full the social security premiums and contributions payable as required by relevant
    laws and regulations and we have never been penalized for a violation of these laws.
    SAFETY AND ENVIRONMENTAL PROTECTION
    Safety and Labor Protection
    We have taken measures to ensure compliance with applicable national, local and foreign laws and
    regulations concerning workspace safety. We have full-time safety management personnel responsible for
    supervising workplace safety and occupational health, hygiene and safety, as well as performing internal safety
    checks during the production process to minimize accidents, injuries and occupational diseases. We obtained the
    GBT 28001-2001 certification in December 2009. Our PRC legal advisor has confirmed that we have satisfied all
    requirements established by relevant laws and regulations and have obtained all licenses necessary to perform work
    in our production bases during the Track Record Period.
    In order to further strengthen workplace safety compliance policies, we plan to develop operational rules for
    employees, and dedicate more training resources to prevent implementation of policies and practices in violation of
    relevant laws and regulations, and to prevent employees from committing violations of our workplace safety
    policies and procedures. As of the Latest Practicable Date, we have not experienced any major workplace or
    industrial accidents.
    Environmental Protection
    Our operations are currently subject to environmental laws and regulations relating to construction and
    operation of renewable energy generation facilities, noise control, air and water emissions, water and ground
    protection, hazardous substances and waste management. Please see the subsection entitled “Regulations —
    Environmental Protection” in this prospectus for more details. During the Track Record Period, our annual cost of
    compliance with the applicable environmental rules and regulations was approximately RMB0.4 million,
    RMB1.5 million and RMB1.0 million, respectively. Our expected cost of compliance for 2010 is
    approximately RMB5.3 million.
    As the industry in which we operate is not a major source of environmental pollution, we believe that the
    impact of our operations on the environment is minor and we have taken all necessary internal environmental
    protection measures. Our PRC legal advisor has confirmed that we were in full compliance with relevant
    environmental protection rules and regulations, not subject to any fines or administrative actions involving
    non-compliance with any relevant regulations, and did not experience any environmental pollution accident
    during the Track Record Period. We have adopted advanced technologies and equipment to prevent and minimize
    pollution and we have not experienced any major accident causing environmental pollution.
    We will also maintain strict compliance with applicable local laws and regulations concerning health, safety
    and the environment in respect of our overseas operations. Before deciding to carry out business in foreign
    jurisdictions, we will take into account our ability to comply with local laws. Our health, safety and environment —
    related departments will conduct regular inspection and monitor compliance by our subsidiaries with related local
    health, safety and environmental laws and regulations of those foreign jurisdictions in which our overseas
    – 122 –
    BUSINESSoperations are located. Where necessary, we will appoint local legal advisors to provide advice concerning relevant
    regulations. We obtained the ISO14001:2004 certification in December 2009.
    INSURANCE
    We have purchased insurance coverage for our products, certain properties, machinery and equipment,
    automobiles and other assets owned, operated or deemed important by us. For instance, we have purchased product
    quality insurance and equipment insurance coverage for our WTGs. The scope of product quality insurance covers
    equipment damage due to defects, and the scope of equipment damage insurance covers damage caused by
    centrifugal force, short-circuits, over-voltage and other physical reasons.
    In accordance with industry practices in China, our own experience in operating our business, and the
    recommendations of insurance companies, the Directors believe that we have purchased sufficient insurance
    coverage.We have not purchased any third party liability insurance coverage for claims relating to personal injury,
    assets or environmental damage arising from our operations, nor have we purchased any insurance for interruptions
    of our business or environmental liability, which, in our opinion, is consistent with customary practices. During the
    Track Record Period, we have not experienced any major operational problems, such as equipment failure, or
    failure to meet standards, improper equipment operation and industrial accidents, nor any business interruptions as a
    result of fire, power shortages, software or hardware malfunctions, flood, computer virus or other events beyond our
    control. Please see the sections entitled “Risk Factors— Risks relating to our business— We are subject to the risk
    of product liability claims and in some cases may not have sufficient insurance coverage” and “Risk Factors —
    Risks relating to our business —Substantial damage to persons or loss of property may occur in the course of our
    production and construction processes”, respectively.
    PROPERTIES
    Owned Properties in the PRC
    As at March 31, 2010, we owned, held or occupied 98 parcels of land with an aggregate site area of
    approximately 1,292,523.0 square meters, 119 buildings or units with an aggregate gross floor area of
    approximately 108,114.3 square meters in the PRC, as well as six buildings or units under construction with
    an aggregate gross floor area of approximately 33,124.3 square meters. The independent valuer had valued the
    abovementioned properties as at March 31, 2010. The text of the letter and the valuation report issued by the
    independent valuer are set out in the appendix entitled “Appendix V— Property Valuation” to this prospectus.
    Land use rights (excluding land for property under construction)
    As at March 31, 2010, we obtained land use right certificates for 88 parcels of land with an aggregate site area
    of approximately 756,259.8 square meters. We also signed the state-owned land use right grant contracts for one
    parcel of land with a site area of 53,033.9 square meters.We have applied for and are in the process of obtaining the
    land use right certificate for this parcel of land. However, the timing for obtaining the certificate is beyond our
    control. This parcel of land would be used for construction of staff dormitories and not crucial to our business
    operations. Our PRC legal advisor has confirmed that there is no material legal impediment to our obtaining the
    relevant land use right certificate, and that we are not in breach of any relevant laws and regulations for the absence
    of the land use right certificate. However, prior to our obtaining the land use right certificate, our rights in respect of
    this parcel of land are not fully protected under PRC laws.
    – 123 –
    BUSINESSLand for property under construction
    As at March 31, 2010, we had nine parcels of land with an aggregate site area of approximately
    483,229.3 square meters used as project construction sites. Among these nine parcels of land, we had obtained
    land use right certificates for five parcels of land with an aggregate site area of approximately 318,833.3 square
    meters, and we signed the state-owned land use right grant contracts for two parcels of land with an aggregate site
    area of 45,874.0 square meters. These two parcels of land constitute:
    k one parcel of land with a site area of 22,871.0 square meters to be used for development of our future
    wind farm project, Damao Guochan Demonstration Wind Farm Phase II, located in Inner Mongolia
    under our wind farm investment, development and sales business segment.
    k one parcel of land with a site area of 23,003.0 square meters to be used for development of our future
    wind farm project, Tacheng Mayitasi Wind Farm Phase II, located in Xinjiang under our wind farm
    investment, development and sales business segment.
    Our PRC legal advisor has confirmed that there is no material legal impediment to our obtaining the relevant
    land use right certificates for the abovementioned two parcels of land, and that we are not in breach of any relevant
    laws and regulations for the absence of the land use right certificates. However, prior to our obtaining the land use
    right certificates, our rights in respect of these parcels of land are not fully protected under PRC laws.
    We have not signed the state-owned land use rights grant contracts pending consummation of the relevant land
    acquisition procedures for two parcels of land with an aggregate site area of approximately 118,522.0 square
    meters. These two parcels of land constitute:
    k one parcel of land with a site area of 30,000.0 square meters to be used for construction of our future
    WTG and components production facility located in Shaanxi province under our WTG R&D,
    manufacturing and sales business segment.
    k one parcel of land with a site area of 88,522.0 square meters to be used for development of our future
    wind farm project, Jilin QianguoWangfu ZhanfengWind Farm, located in Jilin province under our wind
    farm investment, development and sales business segment.
    We estimate that the land premium in respect of these two parcels of land is approximately RMB13.4 million
    and expect to fund this payment with our working capital. Our PRC legal advisor has confirmed that after we have
    signed the state-owned land use rights grant contracts and fully paid the land premium, there is no material legal
    impediment to our obtaining the relevant land use right certificates, however, prior to our obtaining the land use
    right certificates, our rights in respect of these two parcels of land are not fully protected under PRC laws.
    Buildings (excluding buildings under construction)
    As at March 31, 2010, among the 119 buildings or units that we owned, held or occupied, we obtained the
    building ownership certificates for 98 buildings or units, with an aggregate gross floor area of approximately
    106,086.6 square meters.We have applied for and are in the process of obtaining the building ownership certificates
    for 20 units, with an aggregate gross floor area of approximately 1,867.7 square meters. The timing for obtaining
    these building ownership certificates is beyond our control. The abovementioned buildings are located in Beijing
    and are used as staff dormitories and are not crucial to our current business operations. Our PRC legal advisor has
    confirmed that there is no legal impediment to our obtaining the building ownership certificates of the foregoing
    units after the required procedures are completed.We are not in breach of the relevant laws and regulations and not
    subject to any risk of penalties or sanctions. Prior to our obtaining the building ownership certificates, we are
    – 124 –
    BUSINESSentitled to occupy and use these 20 units, and after we have obtained the certificates, we are entitled to occupy, use,
    assign, lease, pledge or otherwise dispose of the ownership rights of these 20 units in accordance with applicable
    laws.
    As at March 31, 2010, we obtained the building ownership certificate but had not applied for the land use right
    certificate for one building in Xinjiang which is primarily used as a staff dormitory, with a gross floor area of
    approximately 160.0 square meters. We are in the process of signing the land use right transfer contract with the
    land use right owner of this building, and our PRC legal advisor has confirmed that after the relevant land use right
    certificate has been obtained, we are entitled to occupy, use, assign, lease, pledge or otherwise dispose of the
    ownership rights of this building in accordance with applicable laws.
    Buildings under construction
    As at March 31, 2010, we had six buildings under construction, with an aggregate gross floor area of
    approximately 33,124.3 square meters. Our PRC legal advisor has confirmed that except for four buildings with an
    aggregate gross floor area of approximately 14,330.9 square meters for which we did not have or were in the process
    of applying for and obtaining proper construction licenses, we had obtained all proper construction licenses for the
    buildings under construction. The four buildings under construction constitute:
    k two buildings under construction with an aggregate gross floor area of approximately 11,603.0 square
    meters to be used as our WTG and components production facility located in Jiangsu province under our
    WTG R&D, manufacturing and sales business segment.
    k one building under construction with a gross floor area of approximately 1,362.2 square meters to be
    used for our future wind farm project, Jilin Qianguo Wangfu Zhanfeng Wind Farm, located in Jilin
    province under our wind farm investment, development and sales business segment.
    k one building under construction with a gross floor area of approximately 1,365.7 square meters to be
    used for our future wind farm project, Jiuquan Guazhou Liuyuan Trial Wind Farm, located in Gansu
    province under our wind farm investment development and sales business segment.
    Of the foregoing four buildings under construction, we obtained the construction licenses for the two
    buildings located in Jiangsu province on May 13, 2010 and are still in the process of applying for and obtaining the
    construction licenses for the remaining two buildings. Our PRC legal advisor has confirmed that there is no legal
    impediment to our obtaining the relevant construction licenses for the two buildings, and the current lack of these
    licenses will not have a material adverse effect on our operations. However, the timing for obtaining these licenses is
    beyond our control. Our PRC legal advisor has advised us that we face the risk of penalty, fines, or sanction,
    including an order to cease construction from the relevant PRC authorities due to our lack of the proper construction
    licenses.
    Given the remaining buildings under construction for which we have not obtained the relevant construction
    licenses relate to only two of our wind farm projects under construction, we are of the view that the lack of the
    relevant proper construction licenses is not crucial to our current business operations.
    Leased Properties in the PRC
    As at March 31, 2010, we leased two buildings and a unit, with an aggregate gross floor area of approximately
    17,616.4 square meters, which are primarily used for production, corporate purposes or as an office. Our PRC legal
    advisor has confirmed that the building ownership certificates of the aforementioned leased properties have been
    – 125 –
    BUSINESSobtained, our lease agreements with the lessors have been duly signed and properly registered, and our leasing of the
    aforementioned properties complies with the requirement of the relevant laws and regulations and is legal and valid.
    Overseas Properties
    Germany
    As at March 31, 2010, we owned and occupied six parcels of land, with an aggregate site area of
    approximately 37,298.0 square meters, and six buildings, with an aggregate gross floor area of approximately
    10,874.1 square meters, in Germany. These are primarily used as the production facilities of Vensys AG and Vensys
    Elektrotechnik. We also leased five properties in Germany, with an aggregate gross floor area of approximately
    1,372.0 square meters, which are primarily used as the production facilities and staff quarters of Vensys AG and
    Vensys Elektrotechnik.
    United States
    As at March 31, 2010, we leased two parcels of land, with an aggregate site area of approximately
    647,497.0 square meters in Minnesota, U.S. These are primarily used for industrial purposes.
    LEGAL PROCEEDINGS AND REGULATIONS
    We may be involved in certain legal proceedings during the course of our business operations. As of the Latest
    Practicable Date, our Directors confirm, to the best of their knowledge, there exists no pending or threatened
    litigation, arbitration matters or other legal proceedings that may have a material adverse effect on our financial
    condition, results of operation, reputation, business activities, or future prospects.
    We have not obtained certain permits and certificates in respect of our properties. Please see the subsection
    entitled “— Properties” above for more details on our properties with defective titles.
    Save as disclosed above, our PRC legal advisor has confirmed that we are in full compliance with all related
    laws and regulations, and have obtained all licenses, approval documents and permits necessary for the operation of
    our business in the PRC. Following the Listing, we will continue to use our best efforts to comply with the laws and
    regulations as applied by the relevant regulatory authorities in the PRC.
    We are also engaged in operations in Germany, the United States and Australia. Apart from PRC laws, we are
    also bound by the laws and regulations of these countries and regions as well as international treaties such as the
    Convention on International Sales of Goods. Our Directors confirm, to the best of their knowledge, we have
    obtained all requisite licenses, permits and approvals, and complied with all applicable laws and regulations in these
    overseas jurisdictions.
    – 126 –
    BUSINESSCONNECTED TRANSACTIONS
    Upon completion of the Global Offering, transactions between us and our Connected Persons will constitute
    connected transactions for us under Chapter 14A of the Listing Rules.
    Further, as the A Shares are listed on the SZSE, some of the transactions described below will, in addition to
    being subject to and regulated by the Listing Rules, continue to be subject to and regulated by the SZSE Listing
    Rules and other applicable laws and regulations in the PRC as long as the A Shares remain listed. However, the
    requirements of the Listing Rules in relation to connected transactions differ from those of the SZSE. In particular,
    the definition of connected persons pursuant to the Listing Rules is different from the definition of related parties
    pursuant to the SZSE Listing Rules. Therefore, a connected transaction pursuant to the Listing Rules may not
    constitute a related party transaction pursuant to the SZSE Listing Rules, and vice versa.
    We set out below details of our connected transactions.
    CONNECTED PERSONS
    China Water holds more than 10.0% of the equity interests of our Company and is a Substantial Shareholder
    of our Company. ChinaWater is a wholly owned subsidiary of China Three Gorges. Therefore, each of China Three
    Gorges and its subsidiaries and associates constitutes a Connected Person of our Company under Chapter 14A of the
    Listing Rules.
    CONTINUING CONNECTED TRANSACTIONS
    The following transactions have been carried out by our Group and the above mentioned Connected Persons
    during the Track Record Period and are expected to be continued following the Listing. These transactions will
    constitute continuing connected transactions which are not exempt from the reporting, announcement and
    independent shareholders’ approval requirements set out in Chapter 14A of the Listing Rules upon the Listing:
    Continuing connected transactions with China Three Gorges
    Purchase of components
    Description of present and future transactions and the main terms
    We have purchased and will purchase from the subsidiaries and associates of China Three Gorges
    components for the manufacture of WTGs in the ordinary and usual course of business.
    The purchase of products from the subsidiaries and associates of China Three Gorges for the manufacture of
    WTGs has been and will continue to be made in accordance with our internal purchase procedures. We have put in
    place a purchase monitoring process in the purchase department and have also formed a dedicated team to adopt the
    purchase procedures.
    As we are not in a position to ascertain in advance which subsidiaries or associates of China Three Gorges that
    we may purchase components from, our Group will enter into written agreements with the subsidiaries and
    associates of China Three Gorges in respect of each individual connected transaction of the purchase of components
    for the manufacture of WTGs described above.
    We believe that it is in our interest to purchase components from the subsidiaries and associates of China
    Three Gorges on terms acceptable to us for the manufacture of WTGs, and confirm that the transactions
    contemplated under the written agreements to be entered into will be conducted on normal commercial terms
    after arm’s length negotiation.
    – 127 –Pricing
    The fees payable in connection with the products of the subsidiaries and associates of China Three Gorges
    have always been and will be determined based on the market price. Such market price is defined by reference to the
    price at which we are able to be provided with identical or similar products by an Independent Third Party in the
    ordinary and usual course of business.
    Historical figures
    For each of the three years ended December 31, 2007, 2008 and 2009, our purchases from the subsidiaries and
    associates of China Three Gorges amounted to RMB2.2 million, RMB367.0 million and RMB734.6 million,
    respectively. From January 1, 2010 to March 31, 2010, our purchases from the subsidiaries and associates of China
    Three Gorges were RMB276.6 million.
    Annual caps
    For each of the three years ending December 31, 2010, 2011 and 2012, the annual amount to be payable by us
    to the subsidiaries and associates of China Three Gorges in connection with the purchase of components from the
    subsidiaries and associates of China Three Gorges will be no more than RMB1,866.4 million, RMB2,245.0 million
    and RMB1,001.0 million, respectively. The above annual caps have been determined by our Company after
    consideration of the following factors:
    (i) The historical transaction value;
    (ii) Our current and anticipated business needs and production volume;
    (iii) Prevailing market conditions;
    (iv) A component purchase contract of RMB1,271.4 million we have entered into with an associate of
    China Three Gorges on April 22, 2010, pursuant to which most of the delivery of the components is
    expected to take place in 2010; and
    (v) Certain Connected Persons are expected to cease to be our Connected Persons in 2011, which results in
    a decrease in the annual cap for 2012.
    Product sale
    Description of present and future transactions and the main terms
    Our Group has sold and will sell to the subsidiaries of China Three Gorges WTGs in the ordinary and usual
    course of business.
    Such sale of WTGs by our Group to the subsidiaries of China Three Gorges is usually awarded through public
    tenders in accordance with the applicable laws and regulations of the PRC, i.e. the relevant subsidiary of China
    Three Gorges will invite bids for the WTGs they propose to purchase in accordance with the laws and regulations of
    the PRC, and our Group, as the tenderer, shall submit tender documents in response to the invitation to tender. For
    further details on our sales, please see the section entitled “Business— Sales and Marketing” in this prospectus.
    As most of the sale of WTGs is usually awarded through the tendering process described above which is
    subject to the relevant PRC laws and regulations, our Group will enter into written agreements with the subsidiaries
    of China Three Gorges in respect of each individual connected transaction of sale of WTGs after winning a tender,
    or on normal commercial terms after arm’s length negotiation where no tendering process is required to be adopted.
    – 128 –
    CONNECTED TRANSACTIONSWe believe that the sale of WTGs to the subsidiaries of China Three Gorges constitutes a vital part of our
    business and is in our interests and confirm that the transactions contemplated under the written agreements to be
    entered into will be conducted on normal commercial terms.
    Pricing
    The selling price in respect of the sale of WTGs has been and will be determined through the tender bidding
    process if the sale is awarded through a public tender. Where the sale of WTGs is not awarded through a public
    tender, the selling price has been and will be determined based on the market price.
    Historical figures
    For each of the three years ended December 31, 2007, 2008 and 2009, our revenue in connection with the sale
    of WTGs to the subsidiaries of China Three Gorges amounted to RMB79.0 million, RMB190.6 million and
    RMB310.0 million, respectively.
    Annual caps
    For each of the three years ending December 31, 2010, 2011 and 2012, the annual amount receivable by our
    Group from the subsidiaries of China Three Gorges in connection with the sale of WTGs to the subsidiaries of China
    Three Gorges will be no more than RMB1,400 million, RMB1,900 million and RMB2,300 million, respectively.
    The annual caps have been determined by our Company based on the following factors:
    (i) According to publicly available information, China Three Gorges has just launched an aggressive wind
    power development plan with both near term targets such as 2010 and 2012, and long term targets such
    as 2020.
    (ii) We enjoy a favorable business relationship with China Three Gorges, and have historically maintained
    a dominant market share of its purchases of WTGs.
    (iii) We aim to maintain our position as a leading WTG supplier for China Three Gorges by providing
    premium quality WTGs at competitive prices with a high performance to price ratio.
    (iv) From January 1, 2010 to the Latest Practicable Date, we had concluded WTG contracts with
    subsidiaries of China Three Gorges amounting to approximately RMB283 million, and are about
    to conclude several WTG contracts in the near term.
    WAIVER APPLICATION
    Upon completion of the Global Offering, the continuing connected transactions described above will
    constitute non-exempt continuing connected transactions under the Listing Rules, and will be subject to the
    requirements of reporting, announcement and independent shareholders’ approval set out in Rules 14A.45 to
    14A.48 of the Listing Rules.
    The Directors (including independent non-executive Directors) are of the view that the continuing connected
    transactions described above have been carried out in our ordinary and usual course of business on normal
    commercial terms in the past and will be so in the future, and the proposed annual caps set out above are fair and
    reasonable and in the interests of the Shareholders as a whole. Pursuant to Rule 14A.42(3) of the Listing Rules, we
    have applied to be exempt from strict compliance with the requirements of announcement and independent
    shareholders’ approval as set out in Rules 14A.47 and 14A.48 of the Listing Rules for the period of three years
    – 129 –
    CONNECTED TRANSACTIONSending on December 31, 2010, 2011 and 2012 and the Hong Kong Stock Exchange has granted a waiver in relation
    thereto. Except for the waiver granted to exempt from compliance with the requirements of announcement and
    independent shareholders’ approval, our Company will comply with the relevant requirements under Chapter 14A
    of the Listing Rules, including Rules 14A.35(1), 14A.35(2), 14A.36, 14A.37, 14A.38, 14A.39 and 14A.40. Our
    Company confirms that for the purpose of Rules 14A.35(1), 14A.37(3) and 14A.38(3) of the Listing Rules, all the
    relevant contracts in relation to the continuing connected transactions in the relevant years as disclosed above are
    available for review by the independent non-executive Directors and auditors of our Company. Our independent
    non-executive Directors and auditors will check whether the relevant continuing connected transactions are entered
    into in accordance with the terms and pricing disclosed in this prospectus and will disclose their confirmation
    annually in accordance with the requirements of the Listing Rules.
    THE JOINT SPONSORS CONFIRMATION
    The Joint Sponsors are of the view that the non-exempt continuing connected transactions described above
    have been entered into in our ordinary and usual course of business, on normal commercial terms, are fair and
    reasonable and in the interests of the Shareholders as a whole. The Joint Sponsors are also of the viewthat the annual
    caps for such transactions are fair and reasonable.
    – 130 –
    CONNECTED TRANSACTIONSDIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
    GENERAL
    Board of Directors
    The Board of Directors consists of nine Directors, three of whom are independent non-executive Directors.
    The Directors are elected at meetings of the Shareholders for a term of three years, renewable upon re-election. The
    independent non-executive Directors shall not serve on the Board of Directors for more than two consecutive terms.
    The duties and powers conferred on the Board of Directors include: convening the Shareholders’ meeting and
    reporting its work to the Shareholders, implementing shareholders’ resolutions, determining our Company’s
    business plans and investment plans, formulating our Company’s annual budget and final accounts, formulating our
    Company’s proposals for profit distributions and recovery of losses, formulating our Company’s proposals for the
    increase or reduction of registered capital, as well as exercising other powers as conferred by the Articles of
    Association. Written contracts between our Company and the Directors were entered into on May 26, 2010.
    Supervisory Committee
    The PRC Company Law requires a joint stock limited liability company to establish a supervisory committee
    and this requirement is also contained in the Articles of Association. Our Supervisory Committee is responsible for
    monitoring our Company’s financial matters and overseeing the actions of the Board of Directors and our
    management personnel. Our Supervisory Committee consists of five Supervisors, two of whom are elected by
    the employees of our Company.
    The term of office of the Supervisors is three years renewable upon re-election. An elected Supervisor cannot
    concurrently hold the position of a Director, president, vice president, chief financial officer or other senior
    management. The duties and powers conferred on the Supervisors include: examining the periodic reports of our
    Company prepared by the Board of Directors and providing written comments, proposing resolutions to the
    Shareholders’ meeting, proposing to convene a meeting of the Board of Directors, as well as overseeing the actions
    of the Board of Directors and other senior management of our Company in carrying out their duties. In the case of
    any conflict of interest between our Company and any of the Directors, the Supervisors shall negotiate or initiate
    legal proceedings against such Directors on behalf of our Company. A resolution of our Supervisory Committee
    may be adopted only if it is approved by voting by two-thirds or more of the members of our Supervisory
    Committee.
    DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
    The table below sets forth information regarding the Directors:
    Name Age Position Date of Appointment
    WU Gang ( ) . . . . . . . . . . . . . . 52 Chairman, Chief Executive Officer
    and Executive Director
    March 25, 2010
    GUO Jian ( ) . . . . . . . . . . . . . . 46 President and Executive Director March 25, 2010
    WEI Hongliang ( ) . . . . . . . . 38 Vice President and Executive Director March 25, 2010
    LI Ying ( ) . . . . . . . . . . . . . . . . 75 Vice Chairman and Non-Executive
    Director
    March 25, 2010
    GAO Zhong ( ) . . . . . . . . . . . . 51 Non-Executive Director March 25, 2010
    LV Houjun ( ). . . . . . . . . . . . 47 Non-Executive Director March 25, 2010
    WANG Yousan ( ) . . . . . . . . 74 Independent Non-executive Director March 25, 2010
    SHI Pengfei ( ). . . . . . . . . . . 69 Independent Non-executive Director March 25, 2010
    LI Man Bun, Brian David ( ) . . 35 Independent Non-executive Director March 25, 2010
    – 131 –EXECUTIVE DIRECTORS
    Wu Gang ( ), aged 52, is the chairman, chief executive officer and an executive Director of our Company.
    He is a senior engineer (advanced grade) as conferred by the Xinjiang Human Resources Department, an expert
    entitled to special allowance(1) granted by the State Council and a member of the expert consultants’ group for the
    government of Xinjiang. Mr. Wu was the chairman and general manager of our Company from 2002 to 2006 and
    became our chief executive officer in 2006. Further, he chaired the supervisory committee of Vensys AG. Mr. Wu
    led various scientific and technological research projects under significant national programs, including the
    9th Five-Year Key Technologies R&D Program and the 10th Five-Year Key Technologies R&D Program, as well as
    major projects under the 863 programs organized by the PRC Government. He has been granted numerous awards
    and accolades by the State and the government of Xinjiang, including the 600 kW Domestic WTGs R&D First Class
    Award in 2000, the National Science & Technology Second Class Progress Award in 2003, the Xinjiang Science &
    Technology New Contribution Award in 2007 and the Xinjiang Science & Technology Outstanding Contribution
    Progress Award in 2008. Moreover, the WWEA awarded him the World Wind Energy Award for his leadership of
    our Group in our contribution to the development of the international wind power industry. Currently,Mr.Wu is the
    deputy director of the Chinese Renewable Energy Industries Association. He graduated from Xinjiang Engineering
    Institute in 1983 with a bachelor’s degree in power station and electric systems and obtained a master’s degree in
    engineering from Dalian University of Technology in 2003. Mr.Wu possesses more than 20 years of experience in,
    and has a deep understanding of the wind power industry.
    Guo Jian ( ), aged 46, is the president and an executive Director of our Company. He is a senior engineer
    (advanced grade) as conferred by the Xinjiang Human Resources Department. Mr. Guo was the deputy general
    manager from 2001 and subsequently, the general manager of our Company. He was appointed as a Director of our
    Company in 2004, and became our general manager in 2006 and president in 2007. Mr. Guo led and participated in
    various major scientific and technological research projects under the 863 programs organized by the PRC
    Government. He has been granted numerous awards and accolades by the State and the government of Xinjiang,
    including the the National Science & Technology Second Class Progress Award in 2003, the Xinjiang Science &
    Technology New Contribution Award, the First Class Award for Excellent New Product and the Technology
    Innovation Outstanding Contribution Award between 2003 to 2008, as well as the title of “Xinjiang Elite
    Entrepreneur” in 2009. He is recognized as an expert with outstanding contribution in Xinjiang and entitled to
    the special allowance(1) granted by the government of Xinjiang. He graduated from Xinjiang Engineering Institute
    in 1984 with a bachelor’s degree in mechanical manufacturing technology and equipment and graduated from
    Dalian University of Technology with a master’s degree in engineering in 2003. Mr. Guo has been in the wind power
    industry since 1986 with more than 20 years of in-depth experience. Besides possessing the relevant industry skills,
    in particular, he has extensive expertise in the management of the wind power equipment manufacturing business.
    Wei Hongliang ( ), aged 38, is the vice president and an executive Director of our Company. From 1998
    to 2009, he acted as, among other things, the manager of the Legal Department, the manager of the Planning and
    Development Department, as well as the general manager of the Capital Operation and Equity Management
    department of China Water, a large investment corporation in the PRC. In addition, Mr. Wei is currently a general
    assistant manager with ChinaWater and the vice chairman of XinjiangWind Power. He has been a vice president of
    our Company from 2009 and was appointed a Director of our Company in 2010. Mr.Wei graduated from Northwest
    Institute of Politics and Law in 1996 with a bachelor’s degree in laws and obtained a master’s degree in
    administrative studies from Wuhan University in 2007. Due to his substantial experience in capital
    – 132 –
    DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
    (1) a special subsidy granted by the PRC Government to experts or scholars with special contributions
    (1) a special subsidy granted by the government of Xinjiang to experts or scholars with special contributionsmanagement and familiarity with investments by large corporations, his main responsibilities include our Group’s
    capital management and investment.
    NON-EXECUTIVE DIRECTORS
    Li Ying ( ), aged 75, is the vice chairman and a non-executive Director of our Company. He is a senior
    engineer (advanced grade) and entitled to the special allowance(2) granted by the State Council. Mr. Li was the
    deputy director of the Rural Hydropower Department of the Ministry ofWater Resources of the PRC from 1993 to
    1996, the chairman of Ningde City Dagang Hydropower Station Development Co., Ltd. from 2006 to present, the
    chairman of Beijing Qunrui Energy Investment Co., Ltd. from 2007 to present and the chairman of Jianghe Rural
    Electricity Development Co., Ltd. from 2008 to present. Mr. Li has been the vice chairman of our Company from
    2001. He graduated from Wuhan College of Hydraulics in 1955.
    Gao Zhong ( ), aged 51, is a non-executive Director of our Company. Mr. Gao is a senior political officer
    as conferred by the Senior Professionals Evaluation Committee of Xinjiang Enterprises’ Ideological and Political
    Personnel. Mr. Gao was the director, deputy general manager and the Party Committee secretary of Xinjiang
    Jinfang Textile Co., Ltd. from 2003 to 2005, the vice chairman and supervisor of the trade union of Xinjiang Bagang
    (Group) Co., Ltd. from 2005 to 2006, and the chairman and the Party Committee secretary of Xinjiang Beizheng
    Industrial Co., Ltd. from 2006 to 2008. In addition, he was the chairman and the Party Committee secretary of
    XinjiangWind Power from 2008.Mr. Gao graduated from Northwest Institute of Textile Science and Technology in
    1987.
    Lv Houjun ( ), aged 47, is a non-executive Director of our Company. He is a qualified senior economist
    as conferred by the China Construction Bank. Mr. Lv was the deputy general manager of the International
    Department of Hai Tong Securities Co., Ltd. from May 2001 to October 2004 and a general manager and director of
    Hai Tong-Fortis Private Equity Fund Management Co. Ltd. from October 2004. Mr. Lv joined our Group in March
    2006 and was appointed a Director of our Company. Mr. Lv graduated from Nanjing University in 2008 with a
    doctorate degree in economics.
    INDEPENDENT NON-EXECUTIVE DIRECTORS
    Wang Yousan ( ), aged 74, is an independent non-executive Director of our Company. Mr. Wang is a
    qualified senior economist. He held numerous important positions, including the deputy section manager, section
    manager, deputy governor and governor of China Construction Bank, Xinjiang branch from 1958 to 1988, the
    governor of the PBOC, Xinjiang branch from 1988 to 1991, the vice chairman of the government of Xinjiang from
    1991 to 1996, and the vice chairman of the Xinjiang Chinese People’s Political Consultative Conference from 1996
    to 2001. Mr. Wang was appointed as a Director of our Company from 2007. In addition, Mr. Wang is currently an
    independent non-executive director of Xinjiang Joinworld Co., Ltd., Xinjiang Tianfu Thermoelectric Co., Ltd. and
    Xinjiang Hops Co., Ltd., all of which are listed companies in the PRC.
    Shi Pengfei ( ), aged 69, is an independent non-executive Director of our Company. He is a senior
    engineer (advanced grade) as conferred by the Hydropower and Water Resources Planning and Design General
    Institute under the Ministry of Water Resources (formerly part of the now defunct Ministry of Power Industry).
    Mr. Shi possesses extensive experience in the energy sector and held several important energy-related positions,
    including director of the International Liaison Department of the Chinese Wind Energy Association from 1987 to
    1995, head of the New Energy Department and deputy chief engineer of China Water Conservancy and
    – 133 –
    DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
    (2) a special subsidy granted by the PRC Government to experts or scholars with special contributionsHydropower Engineering Consulting Company from 1995 to 2001. Mr. Shi was appointed as a Director of our
    Company from 2007. Currently, he is a member of the expert committee of China Hydropower Engineering
    Consulting Group Co. and the vice chairman of the Chinese Wind Energy Association. Mr. Shi graduated from
    Beijing Institute of Machinery in 1965.
    Li Man Bun, Brian David ( ), aged 35, is an independent non-executive Director of our Company.
    Mr. Li was the general manager and head of Wealth Management Division of The Bank of East Asia, Limited
    (BEA) (stock code: 23) from July 2004 to March 2009. Subsequently, he became BEA’s deputy chief executive in
    April 2009, primarily responsible for BEA’s China and international business operations and management of BEA
    Union Investment Management Limited. In addition, he holds directorships in various member companies of BEA
    and has been appointed a member of several committees by the board of BEA. Currently, Mr. Li is also an
    independent non-executive director of Towngas China Company Limited (stock code: 1083) and an alternate
    director of AFFIN Bank Berhad. He was appointed as a Director of our Company in March 2010. Mr. Li is an
    associate of the Institute of Chartered Accountants in England & Wales, a member of the Hong Kong Institute of
    Certified Public Accountants and a member of the Treasury Markets Association. Mr. Li holds a number of public
    and honorary positions, including, among others, being a member of the Eleventh National Committee of the
    Chinese People’s Political Consultative Conference, a member of the Eleventh Beijing Municipal Committee of the
    Chinese People’s Political Consultative Conference, a member of the Hong Kong-Taiwan Business Cooperation
    Committee, a member of the Hong Kong Energy Advisory Committee, a member of the Hong Kong Standing
    Committee on Judicial Salaries and Conditions of Service, a member of the HongKong Financial Reporting Review
    Panel and a member of the Hong Kong Traffic Accident Victims Assistance Advisory Committee. Mr. Li graduated
    from the University of Cambridge in 1995 with a bachelor’s degree in arts, and obtained a master’s degree in
    business administration from Stanford University in 2002.
    SUPERVISORS
    The table below sets forth information regarding the Supervisors:
    Name Age Position Date of Appointment
    WANG Mengqiu ( ) . . . . . . . . . 45 Supervisor, Chairman of the
    Supervisory Committee
    March 25, 2010
    WANG Shiwei ( ) . . . . . . . . . . . 52 Supervisor March 25, 2010
    LUO Jun ( ) . . . . . . . . . . . . . . . . . 43 Supervisor March 25, 2010
    XIAO Zhiping ( ) . . . . . . . . . . . 33 Supervisor (representative of
    employees)
    March 25, 2010
    ZHENG Chengjiang ( ) . . . . . . . 36 Supervisor (representative of
    employees)
    March 25, 2010
    Wang Mengqiu ( ), aged 45, is the Chairman of the Supervisory Committee of our Company. Mr.Wang
    graduated from Shenzhen University in 1989. From 2002 to 2006, Mr. Wang served as the director of the Finance
    Center of China Water, and is now a director of its Risk Control Department. Mr. Wang was appointed as a
    Supervisor of our Company from 2008.
    Wang Shiwei ( ), aged 52, is a Supervisor of our Company. Mr. Wang is an engineer and has been a
    deputy manager in Xinjiang Wind Power since 2005. Mr. Wang was appointed as a Supervisor of our Company
    from 2009.
    Luo Jun ( ), aged 43, is a Supervisor of our Company. Mr. Luo graduated from Southwest University of
    Science and Technology in 2005 and is an accountant. From 2002 to 2008, Mr. Luo held positions in the Finance
    – 134 –
    DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENTDepartment, Reform Office and Equity Management Office of XinjiangWind Power and served as a director of its
    Equity Management Office since 2006. Mr. Luo was appointed as a Supervisor of our Company from 2004.
    Xiao Zhiping ( ), aged 33, is an employee representative Supervisor of our Company. Mr. Xiao
    graduated from Xinjiang University in 1999 and obtained a bachelor’s degree in economics. Between 1999 and
    2000, he worked for Bank of China, Xinjiang Branch; between 2000 and 2002, he worked for Suntime International
    Economic-Trading Co., Ltd; between 2002 and 2006, he held positions as the manager of the Leasing Department II
    and the deputy general manager of the Leasing Department of Xinjiang Financial Leasing Co., Ltd. Mr. Xiao joined
    our Company in 2006 and is now the director of our Investment and Equity Management Department. He was
    appointed as an employee representative Supervisor of our Company in 2010.
    Zheng Chengjiang ( ), aged 36, is an employee representative Supervisor of our Company. Mr. Zheng
    graduated from Xinjiang Finance and Economics Institute in 1995, majoring in industrial enterprises management.
    Mr. Zheng was the assistant to the general manager, director of our Planning and Management Department,
    assistant to the president, and director of our SystemsManagement Department. Currently, he serves as our director
    of Information Systems. Mr. Zheng was appointed as an employee representative Supervisor of our Company from
    2007.
    SENIOR MANAGEMENT
    The table below sets forth information regarding our senior management:
    Name Age Position
    WU Gang ( ) . . . . . . . . . . . . . . . . 52 Chairman, Chief Executive Officer and Executive Director
    GUO Jian ( ) . . . . . . . . . . . . . . . . 46 President and Executive Director
    LI Yuzhuo ( ) . . . . . . . . . . . . . . 61 Executive Vice President
    CAO Zhigang ( ). . . . . . . . . . . . 34 Executive Vice President
    WEI Hongliang ( ) . . . . . . . . . . 38 Vice President and Executive Director
    SUN Liang ( ) . . . . . . . . . . . . . . . 39 Chief Financial Officer
    Ju¨rgen Rinck . . . . . . . . . . . . . . . . . . . 47 Vice President and Chief Technology Officer
    WANG Haibo ( ) . . . . . . . . . . . 35 Vice President
    WANG Xiangming ( ) . . . . . . . . 40 Vice President
    CUI Xinwei ( ) . . . . . . . . . . . . . 48 Chief Engineer
    MA Jinru ( ) . . . . . . . . . . . . . . . 44 Vice President, Secretary of the Board and Company
    Secretary
    Wu Gang ( ) — Please see the subsection above under the heading of “Executive Directors”.
    Guo Jian ( ) —Please see the subsection above under the heading of “Executive Directors”.
    Li Yuzhuo ( ), aged 61, is an executive vice president of our Company. Mr. Li was the vice president of
    Shenzhen Huawei Technologies Co., Ltd, the general manager of Beijing Leader & Harvest Electric Technologies
    Co., Ltd. and the general manager of Beijing Zhongyi Hekang Electric Technologies Co., Ltd. Mr. Li has been a vice
    president of our Company from 2007. He graduated from Tsinghua University in 1977. Mr. Li has substantial
    experience in the management of large corporations in the PRC and assists our president with the overall operation
    and management of our Group.
    – 135 –
    DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENTCao Zhigang ( ), aged 34, is an executive vice president of our Company. Mr. Cao is a qualified
    engineer as conferred by the Xinjiang Water Resources Department. He joined our Company in 1999 and was the
    director of our Electric Control Affairs department, director of our Chief Engineer Office and our deputy chief
    engineer. He was a vice president of our Company from 2007. Mr. Cao led various scientific and technological R&D
    programs, including the 10th Five-Year Key Technologies R&D Program and 10th Five-Year Key Technologies
    R&D Program, as well as major projects under the 863 program organized by the PRC Government. Mr. Cao
    graduated from Xinjiang Engineering Institute in 1998 with a bachelor’s degree in power systems and automation.
    Mr. Cao possesses more than ten years of experience in the wind power industry, with particular expertise in supply
    chain management and machinery manufacture.
    Wei Hongliang ( ) —Please see the subsection above under the heading of “Executive Directors”.
    Sun Liang ( ), CFTP, aged 39, is the chief financial officer of our Company. Mr. Sun was the financial
    director of ALSTOM (China) Investment Co., Ltd. from 2004 to 2007 and the chief financial supervisor of
    Changsha Zoomlion Heavy Industry Science and Technology Department Co., Ltd. from 2007 to 2009. He joined
    our Company in October 2009. Mr. Sun is a certified financial and treasury professional and has been a member of
    The Finance and Treasury Association Limited from January 2005. He obtained a master’s degree in financial
    management in 2003 from Australian National University. Mr. Sun has accumulated considerable financial
    experience from his previous work with large PRC subsidiaries of leading global companies.
    Ju¨rgen Rinck, aged 47, is a vice president and the chief technology officer of our Company. He was a
    development engineer of the wind power R&D team of the Wind Power R&D Center at Saarbru¨cken, Germany
    from 1990 to 1999, and was responsible for the R&D of the GenesYs 600 WTG project from 1995 to 1998 as the
    chief engineer of the Wind Power R&D Center. Mr. Rinck was the general manager of VENSYS Energiesysteme
    GmbH & Co. KG from 1999 to 2007, and the chief executive officer of Vensys AG from May 2007 to present. He is
    mainly responsible for the financial, R&D, sales, patents and licencing aspects of Vensys AG’s business. Mr. Rinck
    graduated from Saarland University of Applied Sciences (Hochschule fu¨r Technik undWirtschaft des Saarlandes) in
    1990 with a master’s degree in constructive mechanical engineering.
    Wang Haibo ( ), aged 35, is a vice president of our Company. He was director of our Marketing Center
    and Investment Development Department from 2002 to 2007 and managing deputy general manager of Beijing
    Tianrun from 2007. In addition, Mr.Wang was appointed as an employee representative Supervisor of our Company
    from 2005 to March 2010. Mr. Wang graduated from Xinjiang Finance and Economics Institute in 1996 with a
    bachelor’s degree in economic information management. Mr.Wang has substantial experience and expertise in the
    development and operation of wind farm projects as he has specialized in our wind farm development business since
    joining our Company in 2001.
    Wang Xiangming ( ), aged 40, is a vice president of our Company. Mr. Wang is a qualified senior
    engineer as conferred by the Xinjiang Professional Technical Titles Office. He was the vice general engineer and
    general engineer of our Company, and served as a vice president of our Company from March 2007. As a main
    member of the project team, he has participated in various major scientific and technological research projects
    under significant national programs, including the 9th Five-Year Key Technologies R&D Program and the
    10th Five-Year Key Technologies R&D Program, major and subsequent projects under the 863 programs and
    science and technology support programs organized by the PRC Government. Mr. Wang graduated from
    Northwestern Polytechnical University in 1991 with a bachelor’s degree in mechanics design and
    manufacturing. Mr. Wang has been in the wind power industry since 1992, with considerable experience in
    product development, client management and technology services.
    – 136 –
    DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENTCui Xinwei ( ), aged 48, is the chief engineer of our Company. Mr. Cui is an associate professor and
    was dean of the Engineering and Communication Institute of Xinjiang Agricultural University, a director of our
    general design office and our vice chief engineer. He has been our chief engineer from 2009. He led the “R&D of a
    Large-scale Wind Power Generation Simulation and Testing System” national project under the 863 program
    organized by the PRC Government. As a main member of the project team, he participated in numerous significant
    wind turbine technologies-related research projects under the National Key Technology R&D Program, including
    “Key Technologies for the Industrialization of 750 kW Wind Power Generation” under the 10th Five-Year Key
    Technologies R&D Programme, the “Key Technologies Study of 1.5 MW Variable-Speed Constant-Frequency
    Direct-Driven Wind Turbine” and “Research and Development of 1.5 MW Variable-Speed Constant-Frequency
    Semi-Direct-Driven Wind Turbine”. Mr. Cui obtained a master’s degree in mechanical engineering in 1989 from
    Zhejiang University. Mr. Cui possesses more than ten years of specific experience in the R&D of wind power
    generation, advanced technology application, industrialization of products and on-site technological services.
    Ma Jinru ( ), aged 44, is a vice president, the secretary of the Board and the Company Secretary of our
    Company. Ms. Ma is a senior economist. She was an economist with the Dalian Port Design Institute from 1990 to
    1991, head of the Foreign Trade and Economic Cooperation Department of the Dalian Port Authority from 1991 to
    1999, a manager of the Financial Management Department of the Dalian Port Container Integrated Development
    Company from 2000 to 2002, secretary of the board of directors of Dalian Port Container Co., Ltd. from 2002 to
    2005, and secretary of the board of directors/company secretary of Dalian Port (PDA) Co., Ltd. (stock code: 2880)
    from 2005 to 2010. Ms.Ma has been an affiliated person of The Hong Kong Institute of Chartered Secretaries since
    2006 and she has acquired the relevant experience required under Rule 8.17(3) of the Listing Rules. Ms. Ma joined
    our Company in March 2010. Ms. Ma graduated from Jilin University of Technology in 1990 with a master’s degree
    in transportation management engineering.
    COMPANY SECRETARY
    Ma Jinru ( ) — Please see the subsection above under the heading of “Senior Management”.
    COMPENSATION OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
    Our executive Directors, non-executive Directors and Supervisors, if they are also members of our senior
    management or employees, receive compensation in the form of salaries, bonuses, benefits in cash as well as
    through our contribution to their social insurance plans and housing funds. If they are not members of our senior
    management or employees, they do not receive any compensation from us. Save for Mr. Wang Yousan, our
    independent non-executive Directors receive directors’ subsidies from us. The aggregate remuneration paid and
    benefits in kind granted to the Directors and Supervisors during the Track Record Period were approximately
    RMB15.1 million, RMB12.4 million and RMB10.2 million, respectively. As required by PRC regulations, we
    participate in various pension plans, insurance plans and housing funds organized by the PRC Government for our
    employees, including those who are the Directors, Supervisors and senior management, to which we contributed
    approximately RMB11.8 million, RMB27.0 million and RMB40.7 million, respectively during the Track Record
    Period.
    The aggregate amount of compensation we paid to our five highest paid individuals during the Track Record
    Period were approximately RMB21.6 million, RMB16.8 million and RMB17.0 million, respectively.
    – 137 –
    DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENTBOARD COMMITTEES
    Audit Committee
    We have established an audit committee in compliance with the Code on Corporate Governance Practices as
    set out in Appendix 14 of the Listing Rules and specified its terms of reference. The primary duties of our audit
    committee are to review and supervise our financial reporting process and internal control system. Our audit
    committee shall comprise three Directors not involved in our day-to-day management, who shall be appointed by
    the Board. Our audit committee currently comprises Mr. Li Man Bun, Brian David,Mr.Wang Yousan and Mr. Gao
    Zhong and is chaired by Mr. Li Man Bun, Brian David.
    Remuneration Committee
    We have established a remuneration committee according to the requirements of the Code of Corporate
    Governance Practices as set out in Appendix 14 of the Listing Rules, and have specified its terms of reference. The
    primary functions of our remuneration committee include determining the policies in relation to human resources
    management, reviewing our remuneration policies and determining remuneration packages for the Directors. Our
    remuneration committee consists of Mr. Shi Pengfei, Mr. Wang Yousan and Mr. Li Ying and is chaired by Mr. Shi
    Pengfei.
    Nomination Committee
    We have has also set up a nomination committee, the primary duties of which are to make recommendations
    to the Board regarding candidates to fill vacancies on the Board and in senior management. Our nomination
    committee comprises Mr. Wang Yousan, Mr. Shi Pengfei and Mr. Wu Gang and is chaired by Mr. Wang Yousan.
    Strategy Committee
    Our strategy committee consists of five Directors, including Mr.Wu Gang, Mr. Guo Jian,Mr.Wei Hongliang,
    Mr. Gao Zhong and Mr. Shi Pengfei, with Mr.Wu Gang serving as the chairman. The primary responsibilities of our
    strategy committee include: conducting research and submitting proposals regarding our mid-to-long term
    development strategies and major investment decisions; reviewing our annual operation and investment plans;
    conducting research and submitting proposals regarding major investments and financing plans, capital operations
    and assets operation projects.
    MANAGEMENT PRESENCE
    According to Rule 8.12 and Rule 19A.15 of the Listing Rules, a new applicant applying for a listing on the
    Hong Kong Stock Exchange must have a sufficient management presence in Hong Kong, and this normally means
    that at least two of its executive directors must be ordinarily resident in Hong Kong. Our operations are principally
    in the PRC and substantially all of the Directors currently reside in the PRC. We do not, and for the foreseeable
    future will not, have sufficient management presence in Hong Kong for the purpose of satisfying the requirements
    under Rule 8.12 of the Listing Rules. As a result, we have applied to the Hong Kong Stock Exchange for, and the
    Hong Kong Stock Exchange has granted us, a waiver in connection with Rules 8.12 and 19A.15 of the Listing Rules,
    on the following conditions to ensure that regular and effective communication is maintained between the Hong
    Kong Stock Exchange and us:
    1. We have appointedWei Hongliang, our executive Director, and Ma Jinru, our company secretary, as our
    authorized representatives (the “Authorized Representatives”) for the purpose of Rule 3.05 of the
    – 138 –
    DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENTListing Rules. They will act as our principal channel of communication with the Hong Kong Stock
    Exchange. The Authorized Representatives will provide their usual contact details to the Hong Kong
    Stock Exchange to be readily contactable by the Hong Kong Stock Exchange, and will be available to
    meet with the Hong Kong Stock Exchange to discuss any matters on short notice;
    2. As and when the Hong Kong Stock Exchange wishes to contact the Directors on any matters, each of
    the Authorized Representatives will have means to contact all the Directors (including our independent
    non-executive Directors) promptly at all times.We will implement such measures that (a) each Director
    must provide his mobile phone numbers, office phone numbers, email addresses and fax numbers to the
    Authorized Representatives; and (b) in the event that a Director expects to travel and or otherwise be
    out of office, he will provide the phone number of the place of his accommodation to the Authorized
    Representatives;
    3. We will provide the mobile phone number, the telephone number of the business office, email address
    and fax number of every Director to the Hong Kong Stock Exchange; and
    4. Each of the Directors who is not ordinarily resident in Hong Kong possesses or can apply for valid
    documents to visit Hong Kong and can meet with the Hong Kong Stock Exchange upon reasonable
    notice.
    In compliance with Rule 3A.19 of the Listing Rules, we intend to appoint Taifook Capital Limited as the
    compliance advisor, which will act as our additional principal channel of communication with the Hong Kong Stock
    Exchange when our Authorized Representatives are not available. The compliance advisor will have access at all
    times to our Authorized Representatives, the Directors and other officers of our Company to ensure that it is in a
    position to provide prompt responses to any queries or requests from the Hong Kong Stock Exchange in respect of
    our Company.
    COMPLIANCE ADVISOR
    We will appoint Taifook Capital Limited as our compliance advisor upon the Listing in compliance with
    Rule 3A.19 and Rule 19.05 of the Listing Rules.
    We expect to enter into a compliance advisor agreement with Taifook Capital Limited prior to the Listing.
    Pursuant to Rule 3A.23 of the Listing Rules, the compliance advisor will advise us on the following matters:
    — the publication of any regulatory announcement (whether required by the Listing Rules or requested by
    the Hong Kong Stock Exchange or otherwise), circular or financial report;
    — whether a transaction, which might be a notifiable or connected transaction under Chapters 14 or 14A
    of the Listing Rules, is contemplated, including share issues and share repurchases;
    — where we propose to use the net proceeds to us from the Global Offering in a manner different from that
    detailed in this prospectus or where our business activities, developments or results deviate from any
    forecast, estimate, or other information in this prospectus; and
    — where the Hong Kong Stock Exchange makes an inquiry of us in accordance with Rule 13.10 of the
    Listing Rules regarding unusual movements in the price or trading volume of the Shares.
    The material terms of the expected compliance advisor agreement are as follows:
    (a) the term of appointment of the compliance advisor shall commence on the Listing Date and end on the
    date on which we comply with Rule 13.46 of the Listing Rules in respect of our financial results for the
    – 139 –
    DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENTfirst full financial year commencing after the Listing Date (the “Fixed Period”), or until the agreement
    is terminated, whichever is earlier;
    (b) the compliance advisor shall provide us with services, including guidance and advice as to compliance
    with the requirements under the Listing Rules and other applicable laws, rules, codes and guidelines,
    and to act as one of our principal channels of communications with the Hong Kong Stock Exchange;
    (c) we may terminate the appointment of any compliance advisor if the compliance advisor’s work is of an
    unacceptable standard or if there is a material dispute (which cannot be resolved in 30 days) over fees
    payable by us to the compliance advisor but will not terminate the role of the compliance advisor until
    we have appointed a replacement compliance advisor, as permitted by Rules 3A.26 and
    19A.05(1)(3)(a) of the Listing Rules; and
    (d) The compliance advisor may terminate its appointment by serving a written notice on us one month in
    advance if:
    — we commit any breach of any of our obligations thereunder;
    — we fail to take into account the reasonable advice or recommendation of the compliance advisor or in
    relation to any matter which the compliance advisor considers in its reasonable opinion to be material;
    or
    — there arise any circumstances, including regulatory requirements or compliance with the Listing Rules
    and other applicable laws, rules codes and guidelines, which in the sole and absolute opinion of the
    compliance advisor, makes it impracticable, inadvisable or inexpedient for the compliance advisor to
    duly discharge its responsibility under the agreement or as required under the Listing Rules.
    Pursuant to Rules 3A.26 and 3A.27 (as modified by Rule 19A.05(3)) of the Listing Rules, during the Fixed
    Period, we and the compliance advisor will immediately notify the Hong Kong Stock Exchange of termination or
    resignation of the compliance advisor, in each case, stating the reason for termination or resignation, as applicable;
    and we will notify the Hong Kong Stock Exchange of the new compliance advisor’s appointment.
    – 140 –
    DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENTSUBSTANTIAL SHAREHOLDERS
    SUBSTANTIAL SHAREHOLDERS
    As of the Latest Practicable Date, the following persons directly or indirectly controlled, or were entitled to
    exercise, or control the exercise of, 5% or more of the A Shares:
    Name of Shareholder
    Number of A Shares
    directly or
    indirectly held
    Approximate
    percentage of share
    capital (%)
    Xinjiang Wind Power(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409,248,000(L) 18.3
    China Water (1)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 762,048,000(L) 34.0
    China Three Gorges (2)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 762,048,000(L) 34.0
    CB Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161,280,000(L) 7.2
    The letter “L” denotes long position in the Shares.
    Notes:
    (1) ChinaWater (being a wholly owned subsidiary of China Three Gorges) directly holds 352,800,000 A Shares. ChinaWater holds 33.9% of
    the issued share capital of XinjiangWind Power. Under the SFO, besides directly holding interests in our Company, ChinaWater is deemed
    to be interested in the 409,248,000 A Shares held by XinjiangWind Power (38.9% of the interest in the share capital owned by the Xinjiang
    SASAC).
    (2) China Three Gorges (wholly owned by SASAC) is the holding company of China Water. Under the SFO, the 409,248,000 A Shares in
    Xinjiang Wind Power in which China Water is deemed to be interested and the 352,800,000 A Shares directly held by China Water are
    deemed to be China Three Gorges’s interest in our Company.
    (3) Pursuant to the Implementing Measures for the Transfer of Part of the State-owned Shares to the NSSF in Domestic Securities Market,
    jointly issued by the Ministry of Finance and four other ministries (Caiqi [2009] No. 94), subsequent to A Share offering, our state-owned
    Shareholder XinjiangWind Power shall transfer 11,001,352 A Shares held by it and ChinaWater shall transfer 9,483,925 A Shares directly
    held by it to the NSSF. As of April 30, 2010, the above mentioned transfer processes had not been undertaken.
    To the best knowledge of the Directors, immediately following the completion of the Global Offering (not
    including any Shares which will be placed and issued according to the Over-allotment Option), our Company’s
    share capital will include 2,200,470,600 A Shares, 395,294,000 H Shares and 39,529,400 H Shares converted from
    A Shares and transferred to the NSSF, representing 83.5%, 15.0% and 1.5% of our Company’s total share capital,
    respectively.
    – 141 –Immediately following the completion of the Global Offering, Xinjiang Wind Power shall transfer
    19,414,146 A Shares (assuming the Over-allotment Option is not exercised) or 22,326,262 A Shares (assuming
    the Over-allotment Option is exercised) held by it in our Company, and China Water shall transfer 16,736,333 A
    Shares (assuming the Over-allotment Option is not exercised) or 19,246,779 A Shares (assuming the Overallotment
    Option is exercised in full) held by it in our Company, to the NSSF (which Shares shall be converted into
    H Shares upon such transfers). Upon the completion of the abovementioned transfer, the shareholding of our
    substantial Shareholders is as follows:
    Name of Shareholder
    Number of A
    Shares
    directly or
    indirectly held
    Approximate
    percentage of
    issued share
    capital (%)
    Number of A
    Shares
    directly or
    indirectly held
    Approximate
    percentage of
    issued share
    capital (%)
    Immediately after the
    completion of the Global
    Offering
    (assuming the Over-allotment
    Option is not exercised)
    Immediately after the
    completion of the Global
    Offering
    (assuming the Over-allotment
    Option is exercised in full)
    Xinjiang Wind Power(3) . . . . . . . . . . . 389,833,854(L) 14.8 386,921,738(L) 14.4
    China Water (1)(3) . . . . . . . . . . . . . . . . 725,897,521(L) 27.5 720,474,959(L) 26.7
    China Three Gorges (2)(3) . . . . . . . . . . 725,897,521(L) 27.5 720,474,959(L) 26.7
    CB Fund . . . . . . . . . . . . . . . . . . . . . . 161,280,000(L) 6.1 161,280,000(L) 6.0
    The letter “L” denotes long position in the Shares.
    Notes:
    (1) ChinaWater (being a wholly owned subsidiary of China Three Gorges) directly holds 336,063,667 A Shares (assuming the Over-allotment
    Option is not exercised) or 333,553,221 A Shares (assuming the Over-allotment Option is exercised in full). Since China Water holds
    33.9% of the issued share capital of XinjiangWind Power, under the SFO, besides directly holding interests in our Company, ChinaWater
    is deemed to be interested in the 389,833,854 A Shares (assuming the Over-allotment Option is not exercised) or 386,921,738 A Shares
    (assuming the Over-allotment Option is exercised in full) held by XinjiangWind Power (38.9% of the interest in the share capital owned by
    the Xinjiang SASAC).
    (2) China Three Gorges (wholly owned by SASAC) is the holding company of ChinaWater. Under the SFO, China Three Gorges is deemed to
    be interested in the 389,833,854 A Shares and 336,063,667 A Shares (assuming the Over-allotment Option is not exercised) or
    386,921,738 A Shares and 333,553,221 A Shares (assuming the Over-allotment Option is exercised in full) held by Xinjiang Wind
    Power in which China Water is deemed to be interested and the A Shares directly held by China Water.
    (3) Pursuant to the Implementing Measures for the Transfer of Part of the State-owned Shares to the NSSF in Domestic Securities Market,
    jointly issued by the Ministry of Finance and four other ministries (Caiqi [2009] No. 94), state-owned Shareholder Xinjiang Wind Power
    after the A Shares offering shall transfer 11,001,352 A Shares held by it in our Company and ChinaWater shall transfer 9,483,925 A Shares
    directly held by it in our Company to the NSSF. As of April 30, 2010, the above mentioned transfer processes had not been undertaken.
    According to the Listing Rules, as of the Latest Practicable Date, our Company had no Controlling
    Shareholder.
    – 142 –
    SUBSTANTIAL SHAREHOLDERSSHARE CAPITAL
    SHARE CAPITAL
    This section presents certain information regarding our share capital prior to the completion of the Global
    Offering and after the completion of the Global Offering.
    Before Global Offering
    As of the Latest Practicable Date, the share capital of our Company was RMB2,240.0 million comprising
    2,240,000,000 Shares.
    Number of
    shares
    Approximate
    percentage of
    issued share
    capital (%)
    A Shares in issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,240,000,000 100.0
    Upon Completion of Global Offering
    Immediately following completion of the Global Offering, assuming that the Over-allotment Option is not
    exercised, the share capital of our Company would be as follows:
    Number of shares
    Approximate
    percentage of
    issued share
    capital (%)
    A Shares in issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,200,470,600 83.5(1)
    H Shares issued under the Global Offering . . . . . . . . . . . . . . . 395,294,000 15.0
    H Shares converted from A Shares and transferred to the
    NSSF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,529,400 1.5
    Note:
    (1) The figures shown in the table include the share dividends distributed on April 6, 2010.
    Immediately following the completion of the Global Offering, assuming the Over-allotment Option is
    exercised in full, the share capital of our Company would be as follows:
    Number of shares
    Approximate
    percentage of
    issued share
    capital (%)
    A Shares in issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,194,541,200 81.4(1)
    H Shares issued under the Global Offering . . . . . . . . . . . . . . . 454,588,000 16.9
    H Shares converted from A Shares and transferred to the
    NSSF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,458,800 1.7
    Note:
    (1) The figures shown in the table include the share dividends distributed on April 6, 2010.
    The Shares
    According to the Articles of Association, we have two classes of Shares, (i) domestic listed Shares, namely A
    Shares (Shares issued and subscribed for in RMB to investors within the PRC and listed in the PRC); and
    (ii) overseas listed Shares, namely H Shares (Shares listed in Hong Kong). A Shares and H Shares are all ordinary
    Shares in the share capital of our Company. However, apart from certain qualified domestic institutional investors in
    – 143 –the PRC, H Shares generally cannot be subscribed for by or traded between legal or natural persons of the PRC. On
    the other hand, A Shares can only be subscribed for by and traded between legal or natural persons of the PRC,
    qualified foreign institutional investors or qualified foreign strategic investors and must be traded in Renminbi. The
    A Shares held by Xinjiang Wind Power, China Water, Wind Power Research Centre, CB Fund, Yuanjing Xinfeng,
    Yuanjing Xinneng and Yuanfeng Investment are subject to three years’ lock up period from December 26, 2007
    when our Company was listed on the SZSE on December 26, 2007 to December 25, 2010. As required by the PRC
    Company Law, the A Shares held by the Directors, Supervisors and senior management are subject to transfer
    restrictions.
    Shareholders holding different classes of the Shares are considered as different classes of Shareholders. Our
    Company has two classes of Shareholders, namely holders of A Shares and holders of H Shares. The rights
    conferred on any class of Shareholders may not be varied or abrogated unless approved by a special resolution of
    Shareholders’ general meeting and by holders of Shares of that class at a separate meeting conducted in accordance
    with the Articles of Association. The circumstances which shall be deemed to be a variation or abrogation of the
    rights of a class are listed in Appendix VIII to this prospectus. However, the procedures for approval by separate
    classes of Shareholders shall not apply (i) where we issue, upon approval by a special resolution of the Shareholders
    in a general meeting, either separately or concurrently once every 12 months, not more than 20% of each of our
    existing issued A Shares and H Shares, (ii) where our plan to issue A Shares and H Shares at the time of our
    establishment is implemented within 15 months from the date of approval of the relevant regulatory authorities of
    the PRC, including the CSRC and (iii) where the transfer of A Shares for listing and trading on the Hong Kong Stock
    Exchange as H Shares has been approved by the authorized securities approval authorities of the State Council,
    including the CSRC. Please see the subsection entitled “Transfer of our Company’s A Shares for Listing and
    Trading on the Hong Kong Stock Exchange as H Shares” in this prospectus for more details.
    The differences between the A Shares and H Shares, including provisions on class rights, the dispatch of
    notices and financial reports to Shareholders, dispute resolution, registration of Shares on different branches of the
    register of Shareholders, the method of Share transfer and appointment of dividend receiving agents are set out in
    the Articles of Association and summarized in Appendix VIII to this prospectus. A Shares and H Shares will
    however rank pari passu with each other in all other respects and, in particular, will rank equally for all dividends or
    distributions declared, paid or made after the date in this prospectus. H Shareholders are not entitled to any dividend
    payable in respect of our distributable profits accumulated prior to January 1, 2010, including the distribution of
    RMB1,767.8 million approved by our Company’s 2009 annual general meeting on March 25, 2010. For further
    information on this distribution, please see the section entitled “Financial Information — Dividend Policy” in this
    prospectus. All dividends in respect of the H Shares are to be calculated in RMB and paid by us in Hong Kong
    dollars whereas all dividends in respect of A Shares are to be paid by us in RMB. In addition to cash, dividends may
    be distributed in the form of Shares. For holders of H Shares, dividends in the form of Shares will be distributed in
    the form of additional H Shares. For holders of A Shares, dividends in the form of Shares will be distributed in the
    form of additional A Shares.
    Transfer of our Company’s A Shares for Listing and Trading on the Hong Kong Stock Exchange as H Shares
    A Shares and H Shares are generally neither interchangeable nor fungible, and the market prices of our
    A Shares and H Shares may be different after the Global Offering.
    However, if any holder of our A Shares is to transfer its A Shares to overseas investors for listing and trading
    on the Hong Kong Stock Exchange, such transfer and conversion will need to be approved by the relevant PRC
    – 144 –
    SHARE CAPITALregulatory authorities, including the CSRC as well as go through the relevant methodology and procedure as
    disclosed below:
    (1) The holder of A Shares is to obtain the requisite approval of the CSRC or the authorized securities
    approval authorities of the State Council for the transfer of all or part of its A Shares into H Shares.
    (2) The holder of A Shares is to issue to us a removal request in respect of a specified number of the Shares
    attaching the relevant documents of title.
    (3) Subject to obtaining the approval of the Board, we would then issue a notice to the H Share Registrar
    with instructions that, with effect from a specified date, our H Share Registrar is to issue the relevant
    holder with H Share certificates for such specified number of H Shares.
    (4) Such specified number of A Shares to be transferred to H Shares are then re-registered on the H Share
    register maintained in Hong Kong on the condition that:
    (a) our H Share Registrar lodges with the Hong Kong Stock Exchange a letter confirming the proper
    entry of the relevant H Shares on the H Share register and the due dispatch of H Share
    certificate; and
    (b) the admission of the HShares (converted from AShares) to trade in Hong Kong will comply with
    the Listing Rules and the General Rules of CCASS and the CCASS Operational Procedures in
    force from time to time.
    (5) Upon completion of the transfer and conversion, the shareholding of the relevant holder of A Shares in
    our A Share register will be reduced by such number of A Shares transferred and the number of
    H Shares register will correspondingly be increased by the same number of H Shares.
    (6) We will comply with the Listing Rules to inform our Shareholders and the public by way of an
    announcement of such fact not less than three days prior to the proposed effective date.
    Approval from holders of A Shares regarding the Global Offering
    Approval from holders of A Shares is required for our Company to issue H Shares and seek the listing of
    H Shares on the Hong Kong Stock Exchange. Such approval was obtained by us at the extraordinary general
    meeting of our Company held on September 25, 2009 and is subject to the following conditions:
    (1) Size of the offer
    The proposed number of H Shares to&ensp