<北京东方园林环境股份有限公司2018 年度非公开发行优先股预案（修订版）>Incident: 1. The company announced that the 7th board of directors reviewed and passed the “Proposal to Amend the 2018 Non-public Preferred Stock Issuance Plan”, “Related Proposal” and related documents. The company plans to partially revise the plan for the non-public offering of preferred shares and announce the latest plan. According to the latest plan, the company plans to privately issue no more than 30 million preferred shares, with a total capital raised no more than 3 billion yuan. The coupon dividend rate is a fixed dividend rate with a single interest cut arrangement. The net amount after deducting issuance fees is no more than 2.5 billion yuan to repay financial institution loans and maturing bonds, and no more than 500 million yuan to supplement working capital. At the same time, the company and Everbright Ca Mau Assets, a subsidiary of Everbright Group, signed a “Conditional Preferred Stock Subscription Contract”. Everbright Ca Mau has determined that it plans to subscribe for no more than 500 million dollars with its own funds. If a fund is formed or a joint third party is formed, the total subscription will not exceed 2.5 billion dollars. 2. The company also announced that the controlling shareholder intends to provide the company with liquidity support such as credit enhancement and entrustment loans. The main contents are: (1) shareholders' loans or entrustment loans: the total interest payable during the contract period is used as the transaction amount, and the annualized interest rate for shareholders' loans or fiduciary loans is not higher than 5.655% (inclusive); (2) Accepting guarantees: The company and subsidiaries at all levels accept the controlling shareholder to guarantee the company's financing, issuance of bonds, etc., using the total guarantee fee payable during the contract period as the transaction amount, and the annual guarantee rate is not higher than 0.5% (inclusive) of the guarantee amount (inclusive). The company expects total transactions with controlling shareholders to not exceed 350 million in 2020. Comment 1. The issuance of preferred shares will effectively reduce the balance ratio, optimize the financial structure, enhance continuous financing capabilities, enhance liquidity, and guarantee the capital requirements for business development. The company's balance ratio is 71.3%. Assuming that according to the 3 billion yuan preferred stock issuance scale, if the financial data at the end of September is used as the base, the company's balance ratio will be reduced to 64.5% after the current preferential stock issuance is completed and the debt is repaid. The company's current debt financing period is relatively short, less than 5 years. As of the end of September 2019, the company's short-term loan balance was about 3.76 billion yuan, the balance of other current liabilities (mainly short-term bonds payable) was about 1.58 billion yuan, the balance of long-term loans was 2.34 billion, and the balance of bonds payable was 2.29 billion. Through corporate debt with a relatively short repayment period of preferred shares with a long issuance period, it can optimize the company's capital structure and reduce dependence on short-term debt financing. At the same time, it can effectively enhance the company's multi-channel financing capabilities other than traditional bank loans and bonds. At the same time, this offering raised no more than 500 million yuan in capital to supplement working capital, which will jointly provide a strong financial guarantee for the company's business development. Everbright Ca Mau Assets, a subsidiary of Everbright Group, plans to subscribe for no more than 500 million dollars with its own funds. If a fund is formed or a third party is formed, the total subscription will not exceed 2.5 billion, which will help the smooth issuance of the company's preferred shares, and also reflects the market's recognition of the company's preferred stock issuance. 2. The controlling shareholder provides liquidity support such as credit enhancement and entrustment loans, which will strongly enhance liquidity and help quickly restore performance Controlling shareholders' liquidity support to the company is mainly carried out by providing shareholder loans or entrustment loans, credit enhancement, etc. This transaction is a related transaction. The company expects the total amount of related transactions with the controlling shareholder to not exceed 350 million yuan in 2020. According to the company's announcement, the controlling shareholder's shareholder loan or entrustment loan support is the total interest payable during the contract period, and the annualized interest rate for shareholder loans is not higher than 5.655% (inclusive); the total guarantee fee payable during the contract period is not higher than 0.5% (inclusive) of the guarantee amount; if assuming the total amount of 350 million yuan, the interest and guarantee fee payable on the loan amount is 300 million yuan and 50 million yuan respectively, which can be estimated to correspond to a loan amount of 5.3 billion yuan and a guaranteed financing amount of 10 billion yuan; if assumed The interest and guarantee fees payable on the entrustment loan are 250 million yuan and 100 million yuan respectively, and the corresponding loan amount of 3.54 billion yuan and the guaranteed financing amount of 20 billion yuan can be estimated. Controlling shareholders strongly support the company's liquidity, which will further broaden the company's financing channels, reduce financial costs, improve financing efficiency, and better support the company's business development, and help the company recover its performance rapidly. The inflection point of performance for the 3rd and fourth quarter has been strengthened. According to our recent research, the company's debt crisis and liquidity crisis have been basically eliminated, the company's ongoing projects have been sorted out effectively, historical operating risks have been better released, the company's losses were drastically reduced in the third quarter of '19, revenue recovered rapidly, and the company's operations have shown significant marginal improvement; the company's three-quarter net profit for 2019 is estimated to be -350 to 100 million yuan. The inflection point for fourth quarter results has arrived; with Chaoyang state-owned assets entering the board of directors election at the end of October 2019 It has been successfully implemented, and synergy effects in terms of financing and business between the two sides will gradually become apparent, helping to continuously eliminate historical operating risks, promote the smooth execution of ongoing engineering projects and the rapid recovery of hazardous waste business operations. Combined with the smooth issuance of future preferred shares and the release of liquidity support from controlling shareholders, the driving force for the rapid recovery of the company's performance will be strengthened. 4. Risks suggest that new projects and project progress have not met expectations; preferred shares have not been successfully issued in the end; financial expenses have not been effectively reduced, which greatly erodes net profit; and systemic risks to the general market.