Beijing Gas Blue Sky Announces 2016 Annual Results

HONG KONG, March 30, 2017 /PRNewswire/ --

Highlights

• Total revenue increased by nearly 5 times to HK$633.8 million, which came entirely from the natural gas business
• Total gas sales volume increased by 15 times to 285.0 million cubic meters
• Profit for the year attributable to owners of the Company increased by nearly 5 times to HK$99.9 million
• The Group's natural gas projects covered 8 provinces
• Will continue to respond positively the national strategy of "One Belt One Road". While taking opportunities to develop the "One Belt" businesses in coastal regions, the Group will also select regions with abundant gas sources and great potential for residential as well as commercial and industrial gas consumption in the "One Road" inland regions for the investment and operation of urban gas projects

Financial Highlights

Beijing Gas Blue Sky Holdings Limited ("the Company" or "Beijing Gas Blue Sky", together with its subsidiaries, the "Group", HKSE stock code: 6828, SGX: UQ7) announced its annual results for the year ended 31 December 2016 ("FY2016"). In FY2016, Beijing Gas Blue Sky recorded a profit attributable to owners of the Company amounted to HK$99.9 million (FY2015: 17.2 million), and recorded total revenue of HK$633.8 million (FY2015: 105.8 million), representing a growth of nearly 5 times year-on-year respectively, which came entirely from the natural gas business. The Group recorded a total gas sales volume of 285.0 million cubic meter, up by 15 times (2015: 17.8 million cubic meters).

During the Reporting Period, earnings per share were HK1.28 cents (2015: HK0.33 cents).

BUSINESS REVIEW

In 2016, the Group continued to focus on the operation and investment of the natural gas business and kept on ramping up the operation size gradually, with its current business in the PRC presence covering 8 provinces in North Eastern region, Eastern region, Central Southern region and South Western region, which include Liaoning Province, Shandong Province, Anhui Province, Zhejiang Province, Hubei Province, Guizhou Province, Sichuan Province and Hainan Province.

RESIDENTIAL USERS

The Group has an operational city gas project in Benxi City, Liaoning Province. The Group followed the "coal-to-gas" policy and seized the chance brought by the recovery of the real estate industry. The Group actively seeks its participation and investment in city gas projects and develop coal-to-gas users so that the Group can further generate growth in natural gas provision.

INDUSTRIAL AND COMMERCIAL USERS

The Group is currently supplying gas to an industrial park in Benxi City, Liaoning, and has also invested in projects in Shandong Province to directly supply LNG to industrial users. In addition, the joint ventures in Huanggang City, Hubei Province are expected to commence production by early 2017. The volume of the gas in industrial and commercial sector will gradually become the main force of city gas development, and is expected to be a key growth driver of the Group's gas sales in the future.

CNG AND LNG REFUELING STATIONS

The Group sells natural gas to LNG vehicles (trucks and motor buses) and CNG vehicles (taxis, motor buses and private cars). During the year ended 31 December 2016, the sales income of the Group's refueling gas stations business recorded HK$75.8 million. The Group owned a total of 34 station comprising 16 CNG refueling stations and 18 LNG refueling stations for vehicles, (2015: a total of 26 stations comprising 18 CNG refueling stations and 8 LNG refueling stations for vehicles), their distributions are mainly located in Hainan Province, Anhui Province, Shandong Province and Guizhou Province.

TRADING AND DISTRIBUTION OF CNG AND LNG

Since the second half of 2015, the Group has expanded into the CNG and LNG trading and distribution business with its transportation fleet and logistics platform keep on growing, and through the distribution and trading of CNG and LNG as a wholesaler and sales agent to its own sales outlets, such as refueling gas stations and direct supply facilities to industrial and commercial users through direct supply facilities. The Group enhances its price bargaining power when negotiating with upstream suppliers via centralized procurement and logistics planning. In addition, the Group is in the process of exploring cooperation opportunities with upstream suppliers. The Group owns 10% equity interest of CNPC's Haikou LNG receiving terminal, distributes LNG with gas source ultimately from CNOOC's Ningbo receiving terminal and Sinopec's Dongjiakou receiving terminal. Accordingly, imported LNG is expected to provide stable natural gas and efficiently lower cost along the coastal area.

During the period, the Group's trading and distribution business developed rapidly. During the year ended 31 December 2016, the trading and distribution business of the Group recorded an income of HK$533.7 million, which were distributed in Anhui Province, Zhejiang Province and Shandong Province. During the period, the total sales volume of our Group recorded was 217.5 million cubic meters, and owned 16 natural gas transportation vehicles.

OTHER VALUE-ADDED SERVICES

The Group recorded an income of HK$25.9 million by disposing 100% equity interest of Lasermoon Limited, an online B2B and B2C platform service provider which focuses on the trading of LNG among LNG liquefaction factories, LNG trading companies and gas refueling stations with value-added services involving price matching, cloud computing, big data analysis, and supply chain solutions.

Going forward, the Group will continue to collaborate with Lasermoon Limited to enhance its trading activities that can benefit our natural gas sales volume and customer satisfaction. The Group aims at connecting the upstream, midstream, and downstream participants of the LNG industry value chain and integrating the flow of information, capital, and logistics. One benefit includes usage of data provided by the platform to reduce the unloaded tankers ratio and improve utilization rate.

EXPANSION INITIATIVES

During the year ended 31 December 2016, the Group acquired/incorporated 5 projects, adding up to 17 projects in total.

FUTURE PROSPECTS

In future, the Group will continue to respond positively the national strategy of "One Belt One Road". While taking opportunities to develop the "One Belt" businesses in coastal regions, the Group will also select regions with abundant resources and great potential for residential as well as commercial and industrial gas consumption in the "One Road" inland regions for the investment and operation of urban gas projects. Meanwhile, by leveraging on the CNOOC, Sinopec and CNPC's LNG receiving terminals effectively, the Group strives to expand its sales network to improve its market share, further grow its gas sales volume, and increase its profitability, making the Group an important natural gas supplier and operator.

Moreover, the Group will continue to focus on the development and innovation of business models and provide more value-added services for its customers. For this purpose, the Company has set up and invested in a joint venture finance lease company (Qiantang Finance Lease Company Limited) with an independent third party in the second half of 2016. The registered capital of Qiantang is US$30 million which the Company indirectly holds 65% equity interest. Qiantang is complimenting the overall strategy of the Group, and will start its business in 2017. At the same time, the Group is also establishing its supply chain finance, LNG trading and industrial foundation fund platform actively and is expected to bring greater growth potential for the Group's future business development and profitability.

In December 2016, the Group signed a memorandum of understanding to acquire Jilin Haoyuan Gas Co., Ltd., Shanxi Minsheng Natural Gas Co., Ltd. and Yongji Minsheng Natural Gas Co., Ltd. Jilin Haoyuan is principally engaged in the (i) supply of piped gas to residential households, commercial users and public buildings (e.g. schools, restaurants, hospitals and commercial complex); and (ii) operation of two compressed natural gas ("CNG") refueling stations for vehicles. Shanxi Minsheng is principally engaged in the (i) supply of piped gas to residential households, commercial and industrial users; and (ii) operation of 5 CNG refueling stations for vehicles in Yuncheng City, Shanxi Province. Yongji Minsheng is principally engaged in the (i) supply of piped gas to residential households, commercial and industrial users; and (ii) operation of 2 CNG refueling stations for vehicles in Yongji City, Shanxi Province. The acquisition projects have all benefited from the government's "coal-to-gas" policy which aims to improve the air pollution issue in China. The acquisition will help the Group to expand its domestic natural gas business and enlarge its market share upon its completion.

With the completion of the acquisition projects in Jilin and Shanxi, the Company can become an important player in the city gas sector, which can increase the revenue streams of the Group, thus enhancing its industrial competitive position and generating more investment value for investors and shareholders.

Mr. Tommy Cheng, Co-Chairman of the Group, stated that, "The Group will invest and develop the natural gas business proactively and expand its business layout by taking the 'develop clean energy, improve customer value, and create a better Blue Sky' as its mission and adhering to the corporate values of 'openness, innovation, cohesion, struggling, pragmatism, accountability, listening and inclusiveness.'"

About Beijing Gas Blue Sky Holdings Limited

Beijing Gas Blue Sky Holdings Limited ("Beijing Gas Blue Sky", HKSE stock code: 6828, SGX: UQ7) is an integrated natural gas provider, distributor and operator, with an emphasis on the midstream and downstream natural gas development. Our natural gas business includes: (i) construction and operation of compressed natural gas ("CNG") and liquefied natural gas ("LNG") refueling stations for vehicles; (ii) construction of natural gas pipelines and operation of city gas projects by providing piped gas; (iii) direct supply of LNG to end-users; and (iv) trading and distribution of CNG and LNG.

The Group has adapted to the "One Belt One Road" policy, and focus on operating and investing natural gas business. The Group is actively expanding its business development and distribution, as well as continues to gradually expanding the scale of operations. Currently, the Group has business presence in several provinces in Northeast China, East China, Central South China and Southwest China, including Liaoning Province, Shandong Province, Anhui Province, Zhejiang Province, Hubei Province, Guizhou Province, Sichuan Province and Hainan Province, etc. The Group is committed to its vision: "develop clean energy, enhance customer value, create a beautiful blue sky". In the future, it will continue to actively investing and developing natural gas business, as well as participating in the development of natural gas industry value chain.