Page 22 - investor presentation

Our Investment

China Gas Holdings (CGH) 4 New Energy

Deal Making (’07 ~ ’14) Long Term Hold (’14 ~ ’19) Exit (’19 ~ ’20)

Identified early growth potential in China’s city-gas market based on SK, as a strategic partner, white-knighted CGH Exit in ’19~’20 after holding
Target SK E&S’ 20+ years of experience as No. 1 provider of city gas in Korea during the hostile takeover attempt by Sinopec/ENN fore more than ~12 years
Sector • Environmental issues taken more seriously in China, expecting city gas to replace
coal-fired power generation
1 Dec ’10 4 Sep ’19

Leveraged China’s local network to identify investment opportunity in • Liu Minghui, Co-Founder, resigned due to embezzlement • Sold 3.3% stake (170mn shares)
CGH, China’s No. 1 private city gas provider allegations at HK$30/share for U$656m
• Established in ‘02, CGH had exclusive piped-gas development rights in 50 cities • Share price fell ~50%, triggered hostile takeover bid
Deal across China
Sourcing • CGH was searching for global strategic investor for business collaboration, and 5 Apr ’20
highly appreciated SK E&S’ operational expertise in city gas 2 Dec ’11
• SK offered to provide operational know-how, LNG project and mgmt. expertise, in
return for equity investments in CGH with 1 board seat • Sinopec/ENN’s hostile takeover at HK$3.5/share was rejected • Sold the remaining 10.3%
by the Board stake (535mn shares) at
HK$24.3/share for U$1.7 bn
Validated CGH’s competitive position based on SK’s business know-how
and expertise to make quick investment decision 3 Jan ’12
• Gradually increased equity ownership in the market to get ~15.5% stake
Deal
Review ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 • SK white-knighted at HK$3.7/share to support CGH
management defend the takeover attempt
&
Execution SK stake 0.1% 2.1% 3.9% 5.2% 6.1% 16.0% 14.6% 15.5%
(%)
After defending hostile takeover attempt, SK Gross IRR 26%,
Avg. price 0.3 1.8 1.9 2.8 2.9 3.6 3.6 4.0 remained as the 2 biggest shareholder and long
nd
(HK$) MoIC 6.3x
term strategic partner
Share Price (HK$/share)
4 5
40
China
30 Gas
20
1 3
10 2
Hang Seng Index
0
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21

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