Chairman's Message

Thorough Implementation of the Spirit of the 19th CPC National Congress
To Build a Stronger, Better and Larger International State-owned Investment Company

Huang Xiaofeng

Party Secretary and Chairman of Guangdong Holdings Limited

With the ringing of bells for the year 2018, we once again stand on the starting line of the new year ready to embark on a new journey in a new era. As we bid farewell to the old year and ring in the new, I hereby, on behalf of the Party Committee and Board of Directors of Guangdong Holdings Limited ("GD Holdings" or the "Group"),would like to extend my best wishes to all of our colleagues for a happy new year, and sincere greetings and heartfelt gratitude to all our employees for their dedication and hard work in the past year, with special salute to our retirees for their continuous support of the development of the Group!

The 19th National Congress of the Communist Party of China (the "19th CPC National Congress") was successfully convened on October 18, 2017. The meeting set comprehensive plans for securing decisive victory in building a moderately prosperous society in all respects, striving for the great success of socialism with Chinese characteristics for a new era (the "New Era Socialism"), and embarking on a journey to fully build a modern socialist China. The Group thoroughly studied, disseminated and implemented the guidelines of the 19th CPC National Congress, conscientiously implemented the spirit of General Secretary Xi Jinping's important instructions on the work of Guangdong, resolutely implemented the strategic plans set out by the Guangdong provincial government and the Guangdong provincial SASAC, given full play to the Party's core political leadership, strengthened and further enhanced Party building, and implemented full and strict governance over the Party in order to foster healthy political and business atmosphere. The Group achieved solid progress in the implementation of the international state-owned investment company pilot reform plan, improved corporate governance framework, streamlined corporate organizational structure, established 6S strategic management system and comprehensive risk management system; explored supply-side structural reforms, made headway in the implementation of innovation-driven development strategies, and striven to enhance the quality and effectiveness of development and economic return. The Group remained focused on the development of its core businesses, further perfected its "3+1" core business model, fostered core competitiveness, achieved faster business development while ensuring overall stable performance. The Group's operating performance growth ranked amongst the best of all Guangdong provincial state-owned enterprises.

In 2017, our employees, with hard work, dedication, enthusiasm and in pursuit of the shared GDH dream, achieved admirable results in both business operation and the Group's reform and development. Firstly, the water resources management sector accelerated its pace of expansion by adding eight new water projects, including Shantou water supply project and Yancheng raw water project, with total cumulative water processing capacity reaching 25 million tons / day, ranked second place in the country. The pilot stage of the Pearl River Delta Water Resources Allocation Project commenced construction according to plan, laying a solid foundation for the development of the Guangdong-Hong Kong-Macau Greater Bay Area Initiative. Secondly, the HOPSCA sector actively adapted to new policies as well as changing market conditions, major construction projects such as Shenzhen Buxin, Panyu Teem Mall and Pearl River New City continued to be developed. The Tianjin Teem Shopping Mall officially opened this year, and key performance indicators such as occupancy rate, shop opening rate, and foot traffic numbers outperformed expectations. The Hotel Management Group has made new progress in providing hotel management services and achieved good results. Thirdly, the Advanced Manufacturing Industrial Park sector began implementation of the GDH Yinping Cooperative Innovation Zone Development Fund, designed business model for the industrial park, and signed construction contracts for Route 29 and Guangdong Avenue, constructions works for which commenced this year. Fourthly, the Industrial Financing sector set its purpose for serving the Group's strategic development needs, actively strengthened its internal control system, continuously expanded its product portfolio and steadily executed the cash management centralization plan. Fifthly, in terms of manufacturing and other businesses, Supertime Group actively sought opportunities in the craft malt business and explored potential capital markets opportunities. Guangnan Group implemented innovation-driven development strategy by actively exploring the innovative film-laminated-steel project. Zhongshan Thermal Power continued its efforts to improve energy efficiency in operations, and actively expanded its electricity trade business.

In 2018, we will further study, propagate and implement the spirit of the 19th CPC National Congress, guided by Xi Jinping's thought on socialism with Chinese characteristics for a new era, adhere to the "Three-positioning, Two-first" and "Four-uphold, Three-support, Two-take-the-lead" principles and together with Governor Ma Xingrui's directives to the Group, undertake the international state-owned investment company pilot reform. We will revolve around our functional positioning, focus on our core businesses, streamline corporate organizational structure, aim to become a stronger, better and larger provincial state-owned enterprise, and assume the great responsibility of enterprise level Party building and preserving and increasing the value of state-owned assets. Firstly, to strengthen our Party building and Party conduct and disciplinary efforts. We will continue to thoroughly study and comprehend Xi Jinping's thought on socialism with Chinese characteristics for a new era and the spirit of the 19th CPC National Congress, inspire enthusiasm within our Group to comprehensively study, propagate and implement the spirit of the 19th CPC National Congress and the second plenary session of the 12th CPC Provincial Committee, implement to the fullest key tasks of the Party building efforts, comprehensively strengthen and normalize the Party organizational activities, implement the "Two Responsibilities" principle and promote Party conduct of integrity and purity. Secondly, to deepen the Group's pilot reform. We will continue to streamline the Group's corporate organizational structure and legal entities, deepen the "Three Systems" internal reform and establish the Group as a state-owned capital investment management platform and a state-owned capital operational platform, consistent with our business development strategies. We will further improve our corporate governance structure, conduct systemic revision in an effort to establish a relatively comprehensive management system for a state-owned investment company. Thirdly, to speed up expansion and development for stronger, better and larger core business sectors. We will take solid steps to continue construction of the Pearl River Delta Water Resources Allocation Project, accelerate project expansion in the water resources sector; strengthen management of existing projects and speed up new project acquisitions in the HOPSCA sector with intention to construct and operate multiple city landmark projects; accelerate development of key projects and construction of various functional zones and infrastructure of the Industrial Park. Fourthly, to strengthen the Group's overall risk management measures. The Group will continue to optimize the 6S strategic management system, improve the risk management and internal control system suitable for an international state-owned investment company, further improve production safety management and implement production safety accountability system.

History is woven in time and dreams come true with strenuous efforts. The Group's pilot reform is entering into a decisive period, striding into the "deep water zone". The tasks are challenging and missions glorious. In the New Year, we will embrace and promote the spirit of "Three-honest and Four-strict" principle, pursue achievement with enthusiasm, overcome obstacles with determination, seek new opportunities and developments in the new era, strive to build a top international state-owned investment company and to jointly write a new chapter in the development of GD Holdings!