hk & china gas Executive Director Huang Weiyi recently gave a brief review of the group's business development: The group previously released the 2023 annual performance, overall, the group has made steady progress in the unclear economic environment, and the business has maintained steady development. Within the year, we improved the energy supply chain, continued to strengthen deep cooperation with business partners, achieved resource integration, cost reduction, and efficiency improvement; at the same time, the group focused on the layout of green energy and investment-related business, driving continuous diversified development of the business.

In terms of gas business in Hong Kong, the total gas sales volume was about 0.8 billion cubic meters (equivalent to natural gas) last year, while the number of customers increased by 1% year-on-year. In mainland China, the group's total gas sales volume in 2023 was about 34.7 billion cubic meters, with a roughly 8% increase in gas customers, progressing better than expected. In addition, the group's wind power business achieved profitability in 2023; distributed photovoltaics added 1.6 GW of new contracts and 1.2 GW of new grid connections. In the year, TG Smart Energy implemented development in 44 zero-carbon smart parks, with a cumulative photovoltaic installed capacity of 2.96 GW contracted and 1.8 GW connected to the grid.

TG Smart Energy announced the withdrawal of its 25% stake in Shanghai Gas Limited and has reclaimed RMB 4.663 billion in funds.

The group continued to expand its business circle during the year, deploying larger developments to provide quality services for 42 million customers in Hong Kong and mainland China, ensuring steady business growth.

We anticipate that the global economic downturn situation is unlikely to improve in the near term, so the group must adopt a strategy of seeking stability amidst change to enhance business resilience. On one hand, we consolidate gas business development and rigorously control capital expenditures; on the other hand, we streamline the corporate structure, seize opportunities to sell non-core businesses, develop renewable energy businesses in a light asset mode, reduce leverage, and provide stable returns to shareholders.

Currently, the increase in consumer spending by Hong Kong residents going north, along with climate change, inevitably impacts gas sales volume; in addition, challenges such as inflation and rising labor costs cannot be avoided. The management is determined to increase profits, protect the interests of customers, employees, and shareholders through cost-saving measures and business restructuring.

Currently, the group is actively expanding new energy businesses, including cooperation with bus companies to trial hydrogen as an alternative energy source to promote green transportation; the group produces eco-friendly methanol in Inner Mongolia Autonomous Region, with production capacity expected to reach 0.12 million tons per year in the coming years for use by shipping companies; the group's stake in EcoCeres produces SAF using waste plant and animal oils and fats, and is currently committed to expanding production capacity. The three work together to form a coordinated development pattern in "sea, land, and air".

In the future, the application of energy will develop towards more diversified and efficient direction, with natural gas and wind power that align with the eco-friendly concept, as well as their comprehensive utilization, being the group's development focus.