ACE.L Regulatory News (ACE)

AUHUA CLEAN ENERGY PLC

("Auhua" or "the Company")

Trading update

Auhua Clean Energy plc, the AIM quoted (AIM: ACE) environmental technology group based in the Shandong Province of China, today issues a pre-close trading update ahead of its Preliminary results announcement for the year ended 31 December 2012 scheduled for mid-April 2013.

Encouragingly, the solid trading performance in the first half of the year continued into the second half of 2012. The Group's revenue has grown approximately 30% to reach RMB218 million and profit before tax for 2012 is expected to be moderately ahead of market expectations.

Since listing on AIM in April 2012 the Group has made good progress. Most notably the new factory in Rushan, Weihai City is now fully operational and has been able to accommodate the increasing demand for split-unit solar water heater systems. The Group has also been focused on securing recognition from the industry and relevant government bodies as the leading provider of split-unit solar water heating systems. This has resulted in the Company receiving a number of awards and accreditations, the most prominent being the five star certification for its split-unit solar water heaters from the Shandong Solar Energy Industry Association. Auhua is the first, and currently the only company to have been awarded this five star certification based on the quality of its products and this has resulted in an increased awareness and interest in the Company's products.

Looking ahead, management believe that revenue is likely to increase in 2013. A key driving factor will be the Memorandums of Understanding that the Company has established with several conglomerate property developers, who have agreed to use Auhua's split unit solar water heater products exclusively. Additionally, property companies are increasingly minded to adopt split-unit solar water heaters over the traditional unibody systems, which have several installation restrictions. With this expected increase in sales, the Group is focused on expanding the production capacity at the factory in Rushan, Weihai City. In light of expected growth and expansion of the business, the Group is assessing and actively pursuing a range of financing options.

Raphael Tham, Chairman of Auhua said:

"After listing on AIM last year, we have gained exposure and credibility in China. This, together with a strong performance in 2012, means we are confident of our future. We have continued to increase market share in our domestic market and have plans to expand our business to meet rising demand. We look forward to updating shareholders further with the release of our Preliminary results in mid-April."

Information about the solar thermal industry in the Shandong province

·; The Shandong province is the leader in China's solar thermal initiatives. It manufactures one third of China's solar water heaters and China uses 64.8% of the world's total capacity for solar heating (source: Global Status Report 2012).

·; In 2011, the solar industry in Shandong Province produced revenue of 98.2 billion yuan, a year-on-year growth of 18.3%; solar water heater production of 5.98 million units, an increase of 12.8% and a solar thermal application area of ​​22.73 million square meters.

·; Currently dominated by unibody systems purchased by end consumers, the Shandong government is shifting its focus to promote split-unit water heater systems to property developers. Consequently they have introduced regulations to increase demand such as enforcement of all buildings above 12 floors to have solar water heater systems (which a traditional unibody system will not be able to support) along with government subsidies to property developers.

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Notes to Editors:

Auhua Clean Energy is an environmental technology group based in the Shandong Province of Eastern China specialising in the development and application of green energy and energy efficient solar water heating solutions. In particular, the Group is focused on the manufacture and sale of split-unit solar water heating systems.

 Auhua Clean Energy operates through its wholly owned subsidiaries Shandong Auhua New Energy Co., Ltd and Weihua Auhua New Energy Co., Ltd.. The Group is the only company with its products having achieved the 5 star certified split unit solar water heater, a Shandong-wide certification standard implemented by the Shandong Solar Association. The Group's brand was also conferred by the Shandong government as one of "Shandong's famous brands" status. In addition, the Group was informed by the National Development and Reform Commission that four of its models had achieved the China Energy Label, which enables consumers of Auhua's products to qualify for government subsidies, thereby strengthening its brand recognition and providing a commercial incentive for clients to choose Auhua products. The Group ended 2012 in a high note to win Prestigious Star of China Award 2012 from Global Finance Magazine.