Performance reviews:

Mid-term core profit in 2024 was HK$3.186 billion, up 2% year over year:

2024H1 achieved total revenue of HK$27.496 billion, a year-on-year decrease of 5.76%; core business profit of HK$3.186 billion, up 2% year over year; profit attributable to shareholders after tax of HK$3.04 billion decreased 16% year over year, basic profit per share was HK$16.3 cents, and an interim dividend of HK$12 cents per share. The company's core profit was stable, and the decline in reporting performance was mainly due to a one-time influence of Shanghai Gas last year.

The gas business in mainland cities grew steadily, and the gas sales spread increased by 0.05 yuan/square meter to 0.5 yuan/square meter:

In the first half of the year, the company's overall gas sales volume in mainland cities increased 7% year on year to 18.6 billion cubic meters; gas customers increased to over 41.39 million households, up 7.3% year on year. Benefiting from the fall in upstream natural gas prices, the average price spread of urban gas was raised to RMB 0.5 per cubic meter through smooth price work and fine management, an increase of RMB 0.05 per cubic meter over the same period in 2023. Affected by the gas incident in Chongqing in April, civilian surplus prices were blocked. With the help of the “Third Plenary Session of the Central Committee” to optimize the residential gas price mechanism, civilian surplus prices were vigorously promoted in the second half of the year. It is expected that the surplus price will accelerate in the second half of the year.

Annual cash inflows can support capital expenses, dividends, and interest expenses:

The company's cash inflow for the first half of the year was approximately HK$4 billion. The management anticipated a cash inflow of about HK$9 billion for the full year of 2024, of which the cash inflow from gas and operations in Hong Kong and the Mainland was about HK$7.5 billion, and the cash inflow from asset sales was over HK$1 billion. Coupled with the introduction of strategic investors, the management stated that the company's annual cash inflow was sufficient for capital expenses, dividends and interest expenses. The company focuses on controlling capital expenditure, and its primary goal is not to increase debt ratios; it will not increase dividends by increasing debt.

Green energy has become a new highlight in the company's business growth:

The hydrogen energy, sustainable aviation fuel, and green methanol markets are growing rapidly, and the company is committed to promoting the development of these three green industries, making them new highlights of the company's business growth. Currently, the company is located at a green methanol production plant in Inner Mongolia Autonomous Region, and production capacity is expected to increase to 0.12 million tons per year in the next few years.

In the future, the company will also adopt various methods to actively revitalize existing assets and achieve a comprehensive green transformation. It will not rush to sell other assets such as water, let alone sell them at low prices to accrue depreciation.