Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no

responsibility for the contents of this announcement, 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 announcement.

TIANHE CHEMICALS GROUP LIMITED

(Incorporated in the British Virgin Islands with limited liability)

(Stock Code: 1619)

FURTHER CLARIFICATION ANNOUNCEMENT

References are made to the clarification announcement of the Company dated 8 October
2014 (the "Announcement"). Unless otherwise defined in this announcement, terms
defined in the Announcement shall have the same meanings when used in this
announcement.
The Announcement sets out a full and clear rebuttal to the false allegations contained in
the Reports. The Company is aware that the anonymous author of the Reports has
published a response (the "Third Report") attempting to challenge the Announcement.
As stated in the Announcement, it is apparent that the author of the Reports has been
twisting facts and intertwining fiction, and has even forged data or combined misleading
information with an intention to undermine the Company's reputation and manipulate the
price of Shares. However, as stated in the Reports and quoted in the Announcement, the
author is neither regulated nor licensed in any jurisdiction and the author's affiliates and/or
clients may have a short position in the Shares and would benefit if the price of the Shares
decreases. The Reports have no credibility at all, and the Company believes that the author
has to remain anonymous for such reason, so that it can continue to make defamatory
statements for its own interest without bearing any responsibility. As a result, the
Company urges investors to take reasonable scepticism toward statement in the Reports.
This type of anonymous and hyperbolic market discourse has no accountability for truth.
The Company, on the other hand, is fully responsible for every fact that we meticulously
set forth in our announcements.
For the benefit of the Company's shareholders, the Company sets forth below its response
to the allegations made in the Third Report.

1. Taxes
The Company has retained tax receipts and bank statements copies, which are
primary evidence for the income tax and VAT payments made, copies of which are
available for inspection by registered shareholders of the Company. See
"Documents available for inspection by registered shareholders" in the
Announcement for further information.
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As in the Second Report, the Third Report again recklessly made an outrageous and
groundless allegation that the Company obtained its tax confirmation through
bribes. The PRC legal adviser of the Company has confirmed the authenticity of the
tax confirmations with each of the Jinzhou and Fuxin local tax bureaus. The
Company has also fully responded in the Announcement to the allegations the
author made based on extracts of the news articles and website contents. Please
refer to the Announcement for further details.

2. Fuxin Hengtong
The Company views and manages the manufacturing of fluorochemical products as
an integrated operation. In addition, Fuxin Hengtong is a wholly-owned subsidiary
of Jinzhou DPF-TH, whose performance will be fully reflected into the
consolidated financial statements of Jinzhou DPF-TH. Based on these factors, the
disclosure in the Prospectus in relation to the Company's specialty fluorochemicals
business segment is true and accurate in all material aspects.
The Company emphasizes that, through listing a wide range of products that the
Group offers at the website of Fuxin Hengtong, the Company could utilize its
marketing resources more efficiently to reach a large pool of potential customers.
The Company could then direct and consolidate purchasing enquires it received
from various channels to its sales team for further handling.
The Company emphasizes that it made income tax and VAT payments in
accordance with relevant laws and regulations, including adopting an arm-length
pricing consistently for transactions with group companies. There were no tax
investigation or disputes about related-party transactions or transfer pricing during
the Track Record Period and up to the date of this announcement. Again, the
Company emphasizes that it has retained tax receipts and bank statements, which
are primary evidence for the income tax and VAT payments made, and copies of
which are available for inspection by registered shareholders of the Company.

3. CITIC International
The Third Report continues to make defamatory statements against the Company
and CITIC International without presenting any reliable source.
The Company has in the Announcement attached the confirmation issued by CITIC
Group Corporation, the parent company of CITIC International, in relation to the
disclosure on CITIC International in the Prospectus. CITIC Group Corporation is
one of the largest conglomerates in China. The author of the Reports, however,
lacks integrity and has concealed itself behind a shroud of anonymity with no
information on its identity or background.
The Company emphasizes that it has not been able to find any public export data
for CITIC International from the websites quoted in the Reports. The Company
believes the General Administration of Customs of the PRC does not disclose the
export data of a single entity to the public.

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As stated in the Announcement, the Prospectus (page 38) disclosed that "during the
Track Record Period, a significant portion of [the Company's] specialty
fluorochemical products were sold to a few trading companies, such as a
subsidiary of one of the largest conglomerates in China, who in turn resell [the
Company's] products to end-users in the PRC and overseas." In addition, as
mentioned in the Announcement, the disclosure in the Prospectus regarding CITIC
International, including those on pages 38 and 135 regarding further sales of the
Company's products by CITIC International have been approved by CITIC Group
Corporation in its aforementioned confirmation.
By ignoring the key factors that the Company conducted genuine sales with CITIC
International who makes full payment before delivery and hopelessly attempting to
draw investors' attention to a groundless claim without any supporting factors, it is
clearly indicated that the allegations and comments in the Reports concerning the
Group are misleading and cannot be verified. In addition, it is clear that the author
of the Reports is trying to mislead the public with extracts from a working draft of
the Prospectus.

4. The Anti-Mar Market

The Company has in the Announcement clearly stated (i) how the Reports
misquoted the management on the purity of anti-mar solution; (ii) how the Reports
made wrong reference to selling price of the anti-mar products of Daikin; (iii) how
the Reports ignored the loss of anti-mar products during utilisation when
calculating the market size; and (iv) why the Reports were wrong in focusing only
on smartphones, tablets, other touch panels and eye-glasses in their analysis of the
end-markets for anti-mar products.
Disregarding the Company's response, the Third Report continues to focus on
smartphones, tablets and other touch panels and used simplistic assumptions and
mixed source of data (which were created based on different assumptions that has
not been disclosed) to arrive at the conclusion that the global demand of pure antimar is US$183 million.
Interestingly, this calculation deviates by approximately 40% from the author's own
estimate of US$300 million earlier1. This ever changing estimation without helpful
explanation is another illustration that the author of the Reports either lacks
knowledge of the specialty fluorochemicals market or has intentionally attempted
to mislead investors through releasing unreliable estimation and unverifiable data.
More importantly, it proves that the author is not accountable for the truth or
accuracy of any statement it makes.
The Reports ignore the fact that anti-mar products are a family of fluorochemical
products that are grouped together based on similar functions, rather than their
chemical structures. In other words, substances with very different chemical
structures that offer similar surface properties, such as repellency of water, grease
or dust, can be called anti-mar products. Therefore, anti-mar products can also be
1

Page 16 of the Third Report.

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referred to as anti-fingerprint, anti-soiling, surface protectants, surface coatings,

self-cleaning agents, etc. Furthermore, technology upgrades result in the
introduction of new substances and new applications of existing substances that
provide similar or better functional properties. As a result, the definition and range
of anti-mar products keep evolving.
More questions arise on the credibility of the anonymous author when it is quoting
another anonymous person claimed to be an expert of Daikin, who stated wrongly
that anti-mar is not used in solar panels. According to Daikin's own website, such
statement is not accurate. As shown on the website of Daikin (http://daikinamerica.com/renewable-energy/), Daikin is promoting sales of its high performance
fluorochemical products that provide critical properties to enhance and protect the
key components of energy producing devices, including solar panels. Furthermore,
the Company questions the source of the statement in the Third Report that claims
the Daikin's solar panel applications have been downgraded into "a low value
commoditized product rather than a high value downstream SFC (specialty
fluorochemical) product" 2.
The Company does not know the methodology used by Market Intelligence &
Consulting Institute ("MIC") in preparing its report ("MIC Report") and thus it is
not appropriate to comment on the same. However, it is a commonly known fact
that market research based on different assumptions, sources of data,
methodologies and sampling bases can result in different results. Further, the
Company emphasizes that the scope of the MIC Report is limited to anti-mar
coatings on smart phones and tablets, which only represent a fraction of the total
anti-mar market as discussed above. To facilitate the investors' understanding of the
industry in which the Group operates, Frost & Sullivan was commissioned by the
Group to provide business, industry and Company-specific data for inclusion in the
Prospectus. As stated in its website, Frost & Sullivan was founded in 1961 and has
more than 40 global offices with more than 1,800 industry consultants, market
research analysts, technology analysts and economists. Frost & Sullivan prepared
market research reports for many other renowned companies in their initial public
offering3, and it was also retained by Hong Kong Government in the past 4.
The Prospectus has duly disclosed that the Group paid a total of RMB4.65 million
to Frost & Sullivan for the preparation and use of the Frost & Sullivan report. On
the other hand, the Third Report did not disclose whether the author or any of its
affiliates and/or clients has any relationship with MIC or their respective associates,
who issued the MIC Report shortly before the publication of the Third Report.

Page 14 of the Third Report.

Such as Samsonite International S.A. (1910) , Chow Tai Fook Jewellery Group Ltd. (1929) and WH Group
Ltd. (288).

http://www.datacentre.gov.hk/en/downloads/study/eeba-es-full.pdf

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Conclusion
The Company reiterates that the allegations in the Third Report continue to be groundless,
self-contradictory, unreliable, misleading and malicious as in the earlier Reports. The
Company urges its shareholders and potential investors to only rely on information in the
Prospectus, the Announcement or otherwise officially disseminated by the Company. The
Company reserves all rights to take legal action for damages or other relief against such
entity and/or associated individuals responsible for such defamatory acts.
Shareholders of the Company and potential investors are advised to exercise caution
when dealing in the Shares of the Company.

By order of the Board of Directors

Tianhe Chemicals Group Limited
Wei Qi
Chairman

Hong Kong, 9 October 2014

As at the date of this announcement, the Board of Directors of the Company comprises Wei Qi, Wei Xuan,
Joseph Lee and Jiang Po, as executive Directors; Homer Sun, as non-executive Director; Loke Yu (alias Loke
Hoi Lam), Chan Kin Sang and Xu Xiaodong, as independent non-executive Directors.

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