Corporate Overview - Tian Lun Gas was successfully listed on the Main Board of Hong Kong Stock Exchange in 2010, marking the beginning of a new journey for the company[23]. - The company’s headquarters is located in Zhengzhou City, Henan Province, China, with a principal place of business in Hong Kong[10]. - The company has a robust governance structure with various committees overseeing audit, remuneration, and nominations[5]. - The Group's consolidated financial statements were audited by PricewaterhouseCoopers, which issued an unqualified opinion[157]. Financial Performance - Total revenue for the year was RMB 6,439,777,000, a decrease from RMB 6,548,618,000 in 2019[39]. - Profit for the year increased to RMB 1,063,673,000 from RMB 813,465,000 in 2019, representing a growth of 30.7%[39]. - Gross profit margin improved to 27.7% in 2020 from 26.0% in 2019[40]. - Net profit margin increased to 16.5% in 2020 compared to 12.4% in 2019[40]. - Annual core profit recorded RMB895 million, an increase of approximately 10.3% compared to the previous year[42]. - The Group's core profit for the year was RMB 895,213,000, representing an increase of 10.3% from RMB 811,376,000 in the previous year[64]. - The Group's gross profit for the year was RMB1,786 million, representing a 4.8% increase year-on-year[106]. - Net profit attributable to owners of the Company was RMB1,044 million, an increase of 32.2% compared to the previous year[113]. Operational Metrics - The volume of gas sold to residential users accounted for 24.8% of total gas sales volume[35]. - Revenue from industrial and commercial users represented 52.5% of total revenue from gas sales[31]. - The gas sales volume for 2020 was approximately 1,515 million cubic meters, with a total of 4,204,256 gas users[43]. - The total length of medium and high-pressure pipelines increased to 7,063 kilometers, representing a growth of 39.9% from 5,048 kilometers in 2019[64]. - The designed daily gas supply capacity to industrial and commercial users reached 28,307,000 m³, an increase of 21.4% from 23,320,000 m³ in 2019[64][68]. Strategic Initiatives - In 2020, the company accelerated the merger and acquisition of urban gas businesses[25]. - The company has expanded its strategic layout for nationwide mergers and acquisitions since 2011[23]. - The company aims to enhance self-supplying capacity and profitability of gas sales through strengthened cooperation and optimized gas sources[53]. - The company plans to adhere to a strategy of "selective mergers and acquisitions" and "gas penetration in urban and rural areas" to rapidly expand its business scale[53]. - The company is focusing on expanding its urban gas projects across various regions in China[27]. Market and Industry Trends - In 2020, China's natural gas apparent consumption reached 324.0 billion m³, representing a year-on-year growth of 5.6%[51]. - The compound annual growth rate of natural gas consumption is forecasted to be 8.4% from 2020 to 2025[52]. - The total natural gas production in China was 188.8 billion m³ in 2020, showing a year-on-year increase of 9.8%[57]. - The total natural gas imports for the year amounted to 102 million tons, which is a year-on-year increase of 5.3%[57]. Governance and Compliance - The company has adopted and complied with all provisions of the Corporate Governance Code for the period from 1 January 2020 to 31 December 2020[154]. - The Group has implemented a four-level ESG governance structure to integrate sustainable development into corporate governance[126]. - The Group conducted training on ESG concepts in January 2020 to strengthen employee understanding and promote ESG-related work[126]. Human Resources and Development - The company emphasizes talent development and customer-centric service innovation to enhance user experience[48]. - The Group has developed a talent training system with targeted online and offline training programs for various employee levels[138]. - The Group promotes competitive remuneration packages and career development plans to attract and retain skilled personnel[194]. Environmental and Social Responsibility - The Group is committed to environmental protection and improving air quality, aligning with national environmental standards and regulations[196]. - The Group emphasizes employee safety and development, implementing health and safety measures and regular training programs[197]. - The Company continues to support rural residents by exempting gas connection fees, promoting clean energy alternatives[130]. Acquisitions and Expansion - The Group completed the acquisition and management takeover of the urban gas project in Shenqiu County, Zhoukou City, Henan Province, contributing to its performance starting January 31, 2020[71]. - The Group acquired four new urban gas projects in Shaanxi, Gansu, and Qinghai provinces, expanding its portfolio to a total of 67 urban gas projects across 16 provinces by the end of 2020[70]. - The company acquired the entire equity interest in Zizhou County Shunxiang Natural Gas Company Limited for a total consideration of RMB 108,000,000 on August 25, 2020[74]. Risk Management - The Group may face financial risks including foreign currency risk, interest rate risk, and liquidity risk, which management will monitor and mitigate as appropriate[187]. - The Group has established policies to ensure continuous identification and management of risks and uncertainties affecting its financial position and business outlook[186].

Financial Performance - Revenue for the six months ended June 30, 2020, was RMB 2,995,535, a decrease of 4.9% compared to RMB 3,150,250 in the same period last year[9]. - Gross profit attributable to owners was RMB 836,494, reflecting a slight increase of 0.9% from RMB 829,464 year-on-year[9]. - Basic earnings per share decreased by 7.3% to RMB 0.38 from RMB 0.41 in the previous year[9]. - Profit for the period was RMB 387,618, a decline of 8.0% compared to RMB 421,246 in 2019[74]. - Profit attributable to owners of the Company for the six months ended June 30, 2020, was RMB 375,157,000, down from RMB 404,935,000 in 2019[112]. - Operating profit decreased to RMB 679,964, down 4.7% from RMB 713,637 in the previous year[74]. - The Group's net profit attributable to owners was RMB 375 million, a decrease of 7.4% compared to RMB 404 million for the same period last year[26]. Customer and Sales Metrics - New pipeline gas customers added during the period totaled 380,440, down 2.9% from 391,756 in the same period last year[9]. - Total pipeline gas customers reached 3,736,418, representing a significant increase of 33.6% from 2,796,693 year-on-year[9]. - Natural gas sales volume to industrial and commercial customers increased by 13.7% to 926,000 m³ from 815,000 m³ in the previous year[9]. - Total gas sales volume to residential customers increased by 16.2% year-on-year, driven by an increase in residential customers and growth in average gas sales volume per customer[10]. - Gas sales volume decreased by 3.6% to 715 million m³ compared to 741 million m³ in the same period last year[10]. Revenue Breakdown - Revenue for the reporting period was RMB 2,996 million, a decrease of 4.9% from RMB 3,150 million in the previous year[12]. - Revenue from engineering construction services rose by 3.9% to RMB 1,142 million compared to RMB 1,099 million in the previous year[16]. - Revenue from gas retail business decreased by 2.2% to RMB 1,462 million from RMB 1,495 million year-on-year[17]. - Revenue from gas wholesale business fell by 34.8% to RMB 323 million from RMB 495 million in the same period last year[18]. - Other business income increased by 13.1% to RMB 69 million, driven by enhanced skills and competitiveness in value-added services[19]. Assets and Liabilities - Total non-current assets increased to RMB 8,310,568, up from RMB 8,040,649 as of December 31, 2019[77]. - Total current assets rose to RMB 4,207,769, compared to RMB 3,898,132 at the end of 2019[77]. - Total liabilities increased to RMB 8,069,677 from RMB 7,751,461, marking a rise of 4.1%[79]. - Current liabilities grew to RMB 4,139,590, up from RMB 3,312,830, indicating an increase of 24.9%[79]. - The Group's total liabilities as of June 30, 2020, were RMB 18,621,631,000, compared to RMB 15,039,255,000 as of June 30, 2019[123]. Cash Flow and Financing - The net cash generated from operating activities was RMB 499,041,000, compared to RMB 215,237,000 in the same period of 2019, representing an increase of 132.5%[86]. - The net cash used in investing activities was RMB 339,674,000, an increase from RMB 202,650,000 in the previous year, indicating a higher investment outflow[86]. - Cash flows from financing activities showed a net outflow of RMB 237,206,000, compared to a net inflow of RMB 2,877,000 in the same period of 2019, reflecting a significant change in financing strategy[86]. - The Group's total borrowings as of June 30, 2020, were RMB 5,145 million, with 64.8% classified as non-current liabilities[27]. Strategic Initiatives and Management - The company aims to strategically respond to economic pressures and optimize management methods to achieve high operational goals in the second half of the year[8]. - The Group aims to stabilize existing markets while aggressively developing new markets, focusing on "market and marketing" for breakthroughs[39]. - The Group plans to innovate management and marketing to cultivate new profit growth points and development models[39]. - The Group will continue to optimize its organizational structure to enhance resource synergy and management capabilities[37]. - The Group emphasizes talent cultivation through various training programs and incentive mechanisms to enhance employee engagement and performance[37]. Shareholder Information - The interim dividend proposed is RMB 11.40 cents per share, with a payout ratio of approximately 30.4%[66]. - The company has established a long-term steady dividend policy to ensure consistent returns to shareholders[66]. - On July 31, 2020, two executive directors exercised a total of 4,000,000 share options at an exercise price of HK$4.97 per share[42]. - As of June 30, 2020, Mr. Zhang Yingcen held 181,689,608 shares, representing approximately 18.18% of the total issued share capital[46]. Acquisitions and Goodwill - The acquisition of Shenqiu County Huixin Gas Limited was completed on January 31, 2020, for a total consideration of RMB 280,000,000[155][156]. - The goodwill arising from the acquisition of Shenqiu County Huixin is approximately RMB 136,408,000, reflecting competitive advantages and expected economies of scale[158]. - The identifiable net assets acquired from Shenqiu County Huixin amounted to RMB 143,592,000[161]. - The acquired businesses contributed aggregated revenues of approximately RMB 80,015,000 and aggregated net profit of approximately RMB 24,888,000 for the period from the acquisition date to 30 June 2020[168].

Company Overview - China Tian Lun Gas Holdings Limited is incorporated in the Cayman Islands with stock code 01600[1]. - The company is headquartered in Zhengzhou City, Henan Province, China[19]. - The company is primarily engaged in the investment, operation, and management of gas pipeline connections, transportation, distribution, and sales of gas, as well as the construction and operation of gas filling stations and production and sales of LNG in the PRC[199][200]. Financial Performance - The annual report includes a comprehensive financial summary and operational highlights[8]. - The company has a five-year financial summary available for investor review[8]. - Key financial metrics and performance indicators are detailed in the consolidated financial statements[8]. - The company's total revenue increased from RMB 5,113,254,000 in 2018 to RMB 6,548,618,000 in 2019, representing a growth of approximately 28.0%[47]. - Profit for the year attributable to owners of the company was RMB 813,465,000, up from RMB 600,360,000 in 2018, marking a growth of about 35.4%[45]. - In 2019, the company's revenue reached approximately RMB 6,549 million, representing an increase of 28.1% compared to 2018[54]. - Gross profit for the year amounted to approximately RMB 1,704 million, reflecting a growth of about 19.3% year-on-year[54]. - The annual core profit recorded was RMB 811 million, which is a 20.6% increase from the previous year[54]. - The Group's core profit for the year rose by 20.6% to RMB 811,376,000, up from RMB 672,992,000 year-on-year[80]. - The profit attributable to owners of the Company increased by 38.7% to RMB 789,179,000, compared to RMB 569,142,000 in the previous year[80]. - For the year ended December 31, 2019, the Group achieved a net profit of RMB 813 million, an increase of RMB 213 million or 35.5% compared to the previous year, with a net profit margin of 12.4%[115]. Revenue Sources - The revenue from gas sales to residential users accounted for 18.1% of total revenue, while industrial and commercial users contributed 35.4%[34]. - The revenue from gas source trade accounted for 6.6% of total revenue, indicating diversification in revenue streams[34]. - Revenue from the gas transportation and sales business accounted for approximately 62.0% of total revenue, with a growth of about 25.8% from 2018[50]. - Revenue from gas sales was RMB 4,061 million, a year-on-year increase of 25.8% from RMB 3,228 million, with industrial and commercial users contributing RMB 2,090 million, up 24.5%[105]. Operational Highlights - The total number of connected residential users increased, contributing to the overall growth in gas sales volume[35]. - The total number of gas users reached 3,247,483, indicating a significant expansion in the customer base[54]. - The gas sales volume for 2019 was approximately 1,560 million cubic meters, marking a growth of approximately 21.2% compared to 2018[54]. - The urban gas sales volume to industrial and commercial users increased by 26.5% compared to the previous year[84]. - The Group connected 839,115 new residential users to gas pipelines, contributing to a total of 3,224,163 residential users[83]. Strategic Initiatives - The company plans to expand its business scale and maintain stable growth in gas sales volume in 2020, leveraging favorable national gas policies[60]. - The company aims to enhance its urban gas traditional business quality and develop a value-added business ecosystem in 2020[60]. - The company is focusing on mergers and acquisitions in urban gas projects in Henan province to explore new cooperation and development models[60]. - The Group plans to increase mergers and acquisitions of urban gas projects in Henan to promote growth and enhance competitive strength[62]. - The Group aims to optimize its organizational structure and strengthen team building to ensure continuous and steady growth[62]. Governance and Management - The report outlines the board of directors and their roles within the company[10]. - The Company has adopted the Model Code for Securities Transactions by Directors and confirmed compliance for the year ended December 31, 2019[169]. - The Company has a strong focus on corporate governance and internal controls as evidenced by the establishment of the Audit Committee[173]. - The Group's financial statements were audited by an external auditor, ensuring transparency and reliability in financial reporting[174]. - The Company has maintained a commitment to compliance with the Listing Rules and corporate governance standards throughout 2019[172]. Risk Management and Safety - The Group implemented a risk management handbook to identify and analyze key risks, aiming to minimize potential losses[140]. - The Group established an early risk alert system to proactively manage operational risks and prevent potential crises[138]. - The Group emphasized the importance of safety management in production processes, promoting standardized operational practices[131]. Employee Development - As of December 31, 2019, the total number of employees was 3,159, with remuneration based on performance and market levels[151]. - A comprehensive training program for new-hire college students spans 9 months, focusing on corporate culture and career development[152]. - Incentive policies have been optimized, with awards such as "Quarterly Award on Commitment" to enhance employee motivation and cohesion[154]. Future Outlook - The Group aims to maintain stable growth in gas sales and improve the quality of urban gas operations in 2020[160]. - The Group is actively responding to national policies, ensuring gas supply and services while preparing for project progress[157]. - The Group aims to leverage its extensive experience in the gas industry to explore potential mergers and acquisitions to enhance its market position[199].

Natural Gas Market Performance - In the first half of 2019, China's natural gas production reached 86.4 billion cubic meters, a year-on-year increase of 10.3%[7] - Natural gas import volume was 46.92 million tons, representing an increase of 11.6% compared to the previous year[7] - The apparent consumption of natural gas in China was 149.3 billion cubic meters, with a growth rate of 10.8%[7] - The Group's overall performance is expected to benefit from the steady growth in the natural gas market driven by supportive policies and urbanization[14] - The gas industry in China is experiencing rapid development, supported by state policies on coal-to-gas conversion and the economic advantages of natural gas[70] Operational Management and Strategy - The Group aims to enhance operational management and explore the potential market value of existing projects to facilitate continued positive growth[15] - The Group plans to enhance the operational quality of its traditional gas business and explore existing operating areas to ensure continuous growth[72] - The Group aims to provide one-stop services through product and service innovations to increase profitability for residential customers[72] - The Group will continue to pursue mergers and acquisitions of city gas projects and expand coal-to-gas conversion efforts outside Henan Province[72] - The Group is committed to adapting to the trends of green energy and consumption structure upgrades while tightening cost control and improving risk management[72] Financial Performance - Revenue for the six months ended June 30, 2019, was RMB 3,150,250,000, representing a 65.9% increase compared to RMB 1,899,344,000 in the same period last year[17] - Gross profit for the same period was RMB 829,464,000, up 66.6% from RMB 497,844,000 year-on-year[17] - Profit attributable to owners of the Company reached RMB 404,935,000, an 88.1% increase from RMB 215,307,000 in the previous year[17] - Basic earnings per share increased to RMB 0.41, up 86.4% from RMB 0.22 year-on-year[39] - The profit for the period for the six months ended June 30, 2019, was RMB 404,935, compared to RMB 215,307 for the same period in 2018, indicating an increase of 88.1%[126] Customer Growth and Sales Volume - The total number of city gas residential customers increased to 2,143,034, reflecting a growth of 20.4% compared to the previous year[20] - The total gas sales volume amounted to 741 million m³, marking a 22.5% increase from the previous year[23] - The gas sales volume to residential customers increased by 24.2%, driven by innovative development models and significant growth from merger and acquisition projects[23] - The total number of industrial and commercial customers increased to 21,041, representing a growth of 27.6% compared to the previous year[22] Capital Expenditure and Borrowings - Capital expenditure for the six months ended June 30, 2019, was RMB 364 million, primarily for project acquisitions and improvements in city gas and long-haul pipeline businesses[54] - As of June 30, 2019, total borrowings amounted to RMB 5,225 million, with long-term borrowings making up 74.5% of the total[54] - The Group's finance expenses — net increased to RMB 121 million, a year-on-year rise of 58.8% due to higher interest expenses from increased loan principal[53] - Interest expense on borrowings for the six months ended June 30, 2019, was RMB 157 million, an increase of 27.7% compared to the same period last year[57] Shareholder Information and Dividends - The company reported an interim dividend of RMB 11.42 cents per share for the six months ended June 30, 2019, with a payout ratio of approximately 28.0%[107] - The company has established a long-term steady dividend policy[108] - The total maximum number of Put Shares that may be put by the Investors to each of the Sponsors' SPVs is 545,068,824 Shares[83] Accounting Policies and Financial Reporting - The Group adopted HKFRS 16 retrospectively from January 1, 2019, without restating comparatives for the 2018 reporting period[140] - The right-of-use asset is depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis[159] - The Group's accounting policies require management to make judgments, estimates, and assumptions that affect the reported amounts of assets and liabilities, income, and expense[164] Cash Flow and Liquidity - For the six months ended June 30, 2019, net cash generated from operating activities was RMB 215,237, an increase from RMB 204,046 in the same period of 2018, representing a growth of approximately 1.6%[131] - The total cash and cash equivalents at the end of the period were RMB 798,758, down from RMB 1,761,481 at the end of June 2018, indicating a significant reduction in liquidity[131] - The net cash used in investing activities for the same period was RMB (202,650), a decrease from RMB (385,125) in 2018, indicating improved cash flow management[131]

Financial Performance - The company reported a significant increase in revenue, achieving a total of 1.2 billion in the last fiscal year, representing a growth of 15% year-over-year[1]. - Total sales revenue for the year reached RMB 5,113,254 thousand, up from RMB 3,109,014 thousand in the previous year, representing a growth of approximately 64.4%[40]. - The company reported a net profit of RMB 600,360 thousand for the year, an increase from RMB 429,157 thousand in the previous year, marking a growth of approximately 40%[40]. - In 2018, the company's revenue reached approximately RMB 5.113 billion, an increase of 64.47% compared to 2017[45]. - Gross profit for the year was approximately RMB 1.428 billion, representing a growth of about 85.98% year-on-year[45]. - Core profit for the year was RMB 730 million, up approximately 91.95% from the previous year[45]. - The total gas sales volume was approximately 1.292 billion cubic meters, reflecting a year-on-year increase of about 21.51%[45]. - The gas transportation and sales business accounted for approximately 63.12% of total revenue, with a year-on-year growth of about 32.93%[42]. - The gross margin improved to 24.70% from 27.93% in the previous year, while the net profit margin increased to 13.80% from 11.74%[41]. - The company reported a total natural gas sales volume of 2.16 billion cubic meters for the year ending December 31, 2018, which helped reduce coal consumption by approximately 3.6 million tons[121]. User Growth and Market Expansion - User data indicates a rise in active users, with a total of 3 million new users added in the past year, marking a 20% increase[2]. - The company has established gas supply projects in multiple provinces, including Hunan and Guangxi, with varying populations and gas supply capacities[19]. - The company has plans for further market expansion, as indicated by the establishment of new projects in regions with significant population densities[19]. - The company is expanding its market presence, with plans to enter three new provinces in China by the end of the next fiscal year[5]. - The company has established a strong presence in various provinces, with notable expansions in Guangdong and Sichuan, enhancing market reach[24]. - The number of residential users connected to the gas network reached 1,952,123, with a total of 1,334,299 cumulative connected users[33]. - The company has a total of 51 gas stations, with significant expansions in user connections and infrastructure development[24]. Strategic Initiatives and Investments - The company is investing 50 million in R&D for new technologies aimed at improving gas distribution systems[7]. - New product development includes the launch of a smart gas meter, expected to enhance operational efficiency and customer satisfaction[4]. - Future strategies include diversifying into renewable energy sources, aligning with global sustainability trends[10]. - The company aims to develop a coal-to-gas fund in collaboration with Henan Yuzhi to expand its business in rural areas[47]. - The company has established a coal-to-gas investment fund with a total commitment of RMB 10 billion, aiming to invest in coal-to-gas projects in rural areas of Henan Province[61]. - The company is actively pursuing new strategies for market expansion and technological development in the gas sector[112]. Operational Efficiency and Cost Management - Operational efficiency improvements have led to a reduction in costs by 8%, contributing to higher profit margins[8]. - The group has implemented a dynamic cost management system for large investments, revising cost management methods to effectively control additional expenses[89]. - The group has enhanced its daily cost management system, conducting monthly analyses of residential user costs and mid-pressure pipeline accounts[89]. - The group has developed a comprehensive measurement management mechanism, optimizing measurement tools to reduce purchasing and sales discrepancies[89]. Corporate Governance and Compliance - The company has adopted and complied with all provisions of the corporate governance code from January 1, 2018, to December 31, 2018[99]. - The audit committee has reviewed and discussed the financial statements for the year ended December 31, 2018, with no significant contingent liabilities reported[100][101]. - The board is responsible for ensuring the company's sustainability and managing in the best interests of shareholders and stakeholders[167]. - The company has established internal guidelines that outline matters requiring board approval, including major acquisitions and capital investments[167]. - The company has implemented effective corporate governance practices to enhance performance, transparency, and accountability[161]. Shareholder Information and Dividends - The proposed final dividend for the year ended December 31, 2018, is RMB 0.10 per share, with a total dividend of RMB 0.1536 per share, representing a 50.88% increase compared to the previous year[97]. - The company has not repurchased, sold, or redeemed any of its shares during the year ended December 31, 2018[96]. - The company aims to enhance its market positioning and operational characteristics to create better conditions for increasing shareholder value[95]. - The company has adopted a dividend policy to distribute profits to shareholders while retaining sufficient reserves for future growth[180]. Risk Management and Safety - The company faces financial risks including foreign currency risk, interest rate risk, and liquidity risk, which are monitored by management[118]. - The company emphasizes employee safety and has implemented health and safety systems to ensure a safe working environment[121]. - The group conducted over 1,000 inspections related to safety management, effectively reducing the occurrence of safety incidents[86]. - The group has improved its internal control and risk management by finalizing the authorization system and process guidelines[89]. Infrastructure Development - The existing pipeline length across various locations is 287 kilometers in Xuchang and 585 kilometers in Hebi, indicating substantial infrastructure development[19]. - The cumulative daily gas supply capacity reached 1,661 thousand cubic meters, with a total of 4,408 kilometers of existing pipeline length and 69 gas stations in operation[24]. - The company operates a total of 3 gas stations, with a significant daily gas supply capacity of 1,920 cubic meters for one of the locations, serving 189,256 residential users and 1,365 commercial users[19]. Human Resources and Management - The company is focused on expanding its market presence and enhancing its operational capabilities through strategic human resource management initiatives[112]. - The management team includes professionals with advanced degrees and extensive backgrounds in finance, accounting, and corporate governance, ensuring robust financial oversight[110]. - The company has established a financial shared service center to standardize accounting subjects, improving overall operational efficiency and data integrity[91]. Environmental Initiatives - The company is actively responding to national air pollution control initiatives by promoting the use of natural gas and providing optimization solutions to high-energy-consuming enterprises[93]. - The group aims to reduce air pollutants from coal combustion as the number of coal-to-gas users continues to grow, contributing to national energy-saving and emission reduction efforts[92].