I. The background for the company’s establishment

Petroleum is an important energy, and also the blood of modern economy. China is the world's fifth major petroleum producer, but also a large petroleum consumer. The petroleum production in northeast China accounts for a quarter of the whole country, and the strategic policy of "the Revitalization of Old Industrial Bases in Northeast China" further accelerates the revitalization of the Northeast economy. CAS Northern Investment Development Co., Ltd. timely meets the reform tide, made full use of the geographical advantages on the basis of the petroleum resource of Daqing Oilfield, Jilin Oilfield and Liaohe Oilfield, and built Shenyang Petroleum Products Transaction Center. Through the transaction center platform, the company promotes the petroleum products in the northeast to the whole country and the domestic oil market is integrated with the world. Stimulating and releasing the great vitality contained in this black land, and strive to play the role of spearhead in the new round of the revitalization of the Northeast.

In the Energy Development Strategy Action Plan (2014-2020) issued by the State Council on June 7, 2014, it was proposed to expand the scale of petroleum reserves, start the third-phase project, encourage private capital to participate in reserve construction, establish enterprise voluntary reserve, and encourage the development of business reserve.

In the Report on the Work of the Government of 2015, Premier Li Keqiang put forward to put the modern logistics industry into China's top ten revitalization industries. At the same time he put forward that "develop the 'Internet Plus' action plan to integrate mobile Internet, cloud computing, big data and the Internet of Things with modern manufacturing, to encourage the healthy development of e-commerce, industrial networks, and Internet banking, and to lead Internet enterprises develop the international market.”

Northeast China region is the major producing areas of crude oil in our country, where the source of oil raw material can be guaranteed, and it is also an important base for refining and chemical production. In Circum-Bohai-Sea region, such as Panjin, Yingkou, Jinzhou and Dalian etc. there are almost thousand private enterprises engaged in petroleum products processing and trade, and the main products include refined oil, lubricants, fuel oil, and asphalt etc. The transaction of petroleum products is very active, and the trading volume is very large.

II. The company’s planning idea

Shenyang Petroleum Products Transaction Center is positioned as a spot electronic transaction platform for petroleum products, with the operation mode of integration of "e-commerce + modern logistics + intelligent warehousing + supply chain finance + transformation of fine chemical achievements". With the business idea of "one center (Liaoning) and multi-point warehouses (nationwide)", taking Liaozhong warehouse as the core, establish a standard oil products storage and delivery warehouse with radiating the major nationwide coastal cities, to provide convenient oil products warehousing service for the center member enterprises, to achieve the transaction at the transaction center platform, to transact inbound and outbound at nearest delivery warehouse which can save time for users and reduce transportation costs.

Shenyang Petroleum Products Transaction Center can achieve the information synchronization of the transaction products through the Internet and spot market of the transaction center, which solves the problem of asymmetric information between the buyers and sellers and avoids the procurement risk. Furthermore, the transaction center introduces financial institution to provide financing services for member enterprises, through the mode of factoring and spot warehouse receipt pledge, etc.

III. The company’s scale

Shenyang Petroleum Products Transaction Center plans three phases with a total investment of 7 billion RMB: in the first and second phases, plans to invest RMB 2 billion RMB to establish transaction center and oil products warehouse with 1 million cubic meters at Shenyang Offshore International Petroleum Industrial Park; in the third phase,we take the way of self-building+cooperation to build 20 million square meters standard oils transaction warehouse in the coastal, riverside and main harbor of all China.The construction of this project can enhance the turnover rate of the petrochemical industry in Northeast China.

IV. The company’s development target

Shenyang Petroleum Products Transaction Center puts forward five development targets on the basis of building a mature spot transaction market:

1. Under the condition that national policies allow, we will make use of the policy environment and conditions of Shenyang Offshore Economic Zone, select the appropriate variety for transaction, and integrate into the global petrochemical product pricing system;

2. We will provide financing service, value-added service and relative supporting services for the member enterprises with the spirit of "good faith, responsibility, performance, and innovation," and devote to building a "national-level and international" major industrial service platform;

3. Taking Shenyang Petroleum Products Transaction Center as the core and belt, we may gather domestic and foreign petrochemical enterprises, introduce domestic banks, international financial institutions, venture capital institutions, international petrochemical fund organizations and other institutions to settle in Shenyang Petroleum Products Transaction Center, and set up the financial industrial cluster of Shenyang offshore international petrochemical transaction;

4. On the basis of spot transaction of Shenyang Petroleum Products Transaction Center, we will achieve the three-level development target, i.e. break through RMB 100 billion RMB by 2017, break through RMB 300 billion RMB by 2018, and the trading volume will exceed RMB 700 billion RMB by 2020;

5. According to the modern enterprise management system, we actively develop our business, strive to achieve national-level and international strategic development targets, and build Shenyang Petroleum Products Transaction Center to be an influential public listed company.