Tian Lun Gas (01600.HK) Retail Gas Sales Business Grows 18% Industrial and Commercial Recovery Supports City Fuel Asset Appreciation

ZHENZHOU, China, March 30, 2023 /PRNewswire/ -- As a professional gas service and integrated energy operator with city gas concession projects covering 16 provinces nationwide, Tian Lun Gas announced its annual results on March 30, stating that for the twelve months ended December 31, 2022, the Company achieved operating revenue of RMB 7.54 billion and gas sales volume of 1.91 billion cubic meters, of which retail gas sales revenue reached RMB 4.91 billion, up 18.3% year-on-year. The overall growth of Tian Lun Gas' retail business was in line with the Company's annual expectations after weathering the epidemic and the pressure of rising energy prices.

The recovery of industry and commerce has ensured the growth of retail gas sales business. Since 2022, the company has actively promoted the resumption of work and production of enterprises within its business area, actively cooperated with the government's anti epidemic policy, and provided gas fees and benefits to key industrial users and small and micro enterprises. At the same time, thanks to the alleviation of the health incidents in the fourth quarter and the gradual lifting of isolation measures, most industries have rapidly resumed production. At the same time, commercial users experienced a comprehensive recovery after the central government issued 20 measures for epidemic prevention and control. The operation of restaurants and entertainment facilities generally achieved explosive growth in the fourth quarter, providing growth momentum for the company's retail gas sales business.

In terms of gross margin, the company's comprehensive gross margin rebounded to 0.42yuan/square meter in 2022, and the increase in gross margin met expectations. The steady increase in gross margin is due to the orderly progress of price adjustment. For Tian Lun Gas, it is relatively easy to sell gas at favorable prices for industry and commerce, while residential gas with certain difficulties at favorable prices accounts for a relatively low proportion of the company's total gas sales. In addition, the company improves the gas installation rate of industrial and commercial users through free connection fees or leasing, achieving endogenous rapid growth within the business area. At the same time, in response to the gas supply situation in 2022, the company comprehensively implements a gas source differentiation marketing strategy, selling limited resources to regions or users with higher prices and better benefits. In terms of gas source, the company continues to carry out gas source optimization work, maximizing the company's access to low-cost and sufficient gas sources from multiple perspectives such as resource acquisition, pipeline construction, gas storage and peak shaving construction.

As a public utility listed company, maximizing the protection of people's needs is a manifestation of the company's pursuit of higher level value. In 2022, the company fully deployed work in safety production, gas supply assurance, and emergency rescue during holidays, achieving zero error in safe gas supply throughout the year. At the same time, the company has put forward higher requirements for ensuring people's livelihood and safe production in 2023. It is necessary to implement gas source assurance, strengthen safety production responsibilities, strengthen emergency management, effectively do a good job in gas safety production, and ensure safe and stable gas supply.

As the effects of the various stable growth policies continue to show, and the domestic industry and commerce have recovered and entered a regular period of development, Tian Lun gas, on the one hand, was affected by the epidemic and the adverse factors of high gas prices, on the other hand, it optimizes the price guidance mechanism to steadily increase gross margin, thus contributing growth momentum to the company and enabling the basic business of city gas.

SOURCE CHINA TIAN LUN GAS HOLDINGS LIMITED