Financial Performance - Revenue was RMB 3.835 billion, a decrease of 3.3% from RMB 3.967 billion in the same period last year[3]. - Core profit for the half-year was RMB 157 million, down 29.7% from RMB 223 million in the same period last year; excluding the impact of the gasification rural business, core profit was RMB 167 million, a decrease of 24.6%[2]. - Net profit attributable to the company’s owners was RMB 132 million, down from RMB 187 million in the same period last year[4]. - Basic and diluted earnings per share were both RMB 0.14, compared to RMB 0.19 in the same period last year[4]. - The group’s net profit attributable to the owners was RMB 132 million, a decline of 29.2% compared to RMB 187 million in the same period last year[51]. - Gross profit for the same period was RMB 543,347 thousand, down 12.7% from RMB 622,106 thousand year-on-year[42]. Sales and Revenue Breakdown - Total gas sales volume reached 1.10 billion cubic meters, a slight increase of 1.7% compared to 1.08 billion cubic meters in the same period last year[2]. - Revenue from external customers for the retail business was RMB 2,587,049,000, while wholesale business revenue was RMB 640,964,000, and engineering installation and services revenue was RMB 386,994,000[12]. - The profit from the retail segment was RMB 158,259,000, while the wholesale segment reported a profit of RMB 18,143,000, and the engineering installation and services segment reported a profit of RMB 165,615,000[12]. - The company added 130,092 new pipeline gas users, a decrease of 12.6% compared to 148,894 in the same period last year[42]. - The total number of pipeline gas users reached 5,730,017, an increase of 5.3% from 5,443,209 users year-on-year[42]. - Natural gas sales volume was 110,020 million cubic meters, reflecting a growth of 1.7% from 108,215 million cubic meters in the previous year[42]. - The company reported a retail gas sales volume of 87,781 million cubic meters, a slight increase of 0.7% compared to 87,180 million cubic meters last year[42]. Assets and Liabilities - Total assets increased to RMB 16.105 billion from RMB 15.691 billion at the end of the previous year[5]. - Total liabilities increased to RMB 9.970 billion from RMB 9.579 billion at the end of the previous year[6]. - The company's total borrowings as of June 30, 2024, amounted to RMB 7,601,670,000, an increase from RMB 6,801,454,000 as of December 31, 2023, representing a growth of 11.8%[32]. - The total accounts payable decreased from RMB 980,052,000 as of December 31, 2023, to RMB 723,618,000 as of June 30, 2024, a reduction of 26.1%[35]. - The total liabilities related to deferred income tax decreased from RMB 745,495,000 as of December 31, 2023, to RMB 715,543,000 as of June 30, 2024, a decrease of 4.0%[34]. Dividends and Shareholder Information - The board declared an interim dividend of RMB 0.0479 per share[2]. - The proposed interim dividend for the six months ended June 30, 2024, is RMB 47,032,000, translating to RMB 0.0479 per share, down from RMB 66,965,000 and RMB 0.0682 per share for the same period in 2023[37]. - The interim dividend will be distributed in HKD on November 29, 2024, to shareholders registered by October 31, 2024[55]. - The company will suspend share transfer registration from October 28, 2024, to October 31, 2024, to determine eligibility for the interim dividend[56]. Operational Highlights - The company aims to enhance supply security and promote the integration of natural gas with new energy sources in line with national energy strategies[40]. - The company continues to focus on high-quality development and the transition towards cleaner and low-carbon energy solutions[41]. - The company aims to enhance operational capabilities and maintain profitability amidst changing market conditions, focusing on safety and digital technology in gas operations[53]. Other Financial Metrics - The company incurred a net foreign exchange loss of RMB 27,821,000 for the six months ended June 30, 2024, compared to a loss of RMB 119,034,000 in the same period of 2023[15]. - The cost of raw materials and consumables used was RMB 2,955,831,000, an increase from RMB 2,861,377,000 in the previous year[16]. - Depreciation of property, plant, and equipment was RMB 104,228,000, slightly up from RMB 101,311,000 in the previous year[16]. - The income tax expense for the six months ended June 30, 2024, was RMB 67,709 thousand, a decrease of 16% compared to RMB 80,579 thousand for the same period in 2023[17]. - The net financial expenses for the six months ended June 30, 2024, amounted to RMB 193,349 thousand, a decrease of 2% from RMB 196,719 thousand in the same period of 2023[18].

Unutilized Funds - The company has approximately HKD 251 million of unutilized funds from the previous placement, expected to be utilized by December 31, 2023[3] - Due to changes in photovoltaic industry policies, the utilization of unutilized funds has been delayed, with approximately HKD 117 million now expected to be utilized by December 31, 2025[3] - The remaining unutilized funds amount to approximately HKD 109 million, which the board plans to reallocate for general working capital purposes[4] Photovoltaic Business Strategy - The company is actively advancing existing rooftop photovoltaic projects while seeking new opportunities, but plans to adjust its development strategy based on industry policies and market conditions[4] - The board believes that the adjustment in the photovoltaic business development strategy will not have a significant adverse impact on the group's existing operations and financial condition[4]

Company Locations and Offices - The company's registered office is located in the Cayman Islands at Windward 3, Regatta Office Park, PO Box 1350, Grand Cayman, KY1-1108[11][12] - The company's principal place of business in Hong Kong is at Unit 4601-02, 46/F, The Center, 99 Queen's Road Central, Central, Hong Kong[7][9] - The company's headquarters in China is located at 4th Floor, Tian Lun Group Building, No.6 Huang He East Road, Zheng Dong Xin District, Zhengzhou City, Henan Province, the PRC[7][15] - The company's Hong Kong branch share registrar and transfer office is Computershare Hong Kong Investor Services Limited, located at Rooms 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong[14] - The company's Cayman Islands share transfer office is Ocorian Trust (Cayman) Ltd, located at Windward 3, Regatta Office Park, PO Box 1350, Grand Cayman, KY1-1108, Cayman Islands[13] Financial Performance - Total revenue increased from RMB 7,542,859,000 in 2022 to RMB 7,725,448,000 in 2023[27] - Net profit for the year rose from RMB 469,272,000 in 2022 to RMB 506,277,000 in 2023[27] - Gross profit margin improved slightly from 18.5% in 2022 to 18.8% in 2023[28] - Net profit margin increased from 6.2% in 2022 to 6.6% in 2023[28] - Assets gearing ratio decreased from 63.5% in 2022 to 61.0% in 2023[28] - Operating revenue for 2023 reached RMB7,725 million, a slight increase of 2.4% year-on-year[41] - Gross profit grew by 4.3% to RMB1,453 million in 2023[63] - Net profit increased by 4.9% to RMB1,169 million in 2023[63] - Urban gas business net profit rose by 21.1% to RMB1,136 million in 2023[63] - The Group's gross profit for 2023 was RMB1,453 million, a 4.3% increase from the previous year[66] - The urban gas business segment profit increased by 21.1% to RMB1,136 million in 2023[66] - The Group's net profit for 2023 was RMB506 million, a 7.9% increase year-on-year[68][71] - Core profit from the urban gas business rose 18.9% to RMB558 million in 2023[71] Gas Sales and Revenue Structure - Retail gas sales volume in 2023 was 166,835,000 cubic meters, showing a recovery from the previous year's 121,774,000 cubic meters[21] - Gas sales structure: residential users accounted for 26.5%, industrial and commercial users 52.5%, transportation users 4.5%, and wholesale business 16.5% of total gas sales volume[22] - Revenue from gas sales: residential users contributed 20.9%, industrial and commercial users 56.7%, transportation users 5.7%, and wholesale business 16.7% of total revenue[25] - Revenue structure: retail gas sales accounted for 66.3%, wholesale gas sales 13.3%, engineering construction services 13.5%, and other operations 6.9% of total revenue in 2023[29] - Retail sales volume of natural gas in 2023 was 1,741 million m³, up 4.5% compared to the previous year[44] - Revenue from gas retail business rose by 4.4% to RMB5,120 million in 2023[55] - Revenue from gas wholesale business surged by 24.5% to RMB1,029 million in 2023[57] - Engineering construction services revenue decreased by 25.8% to RMB1,045 million in 2023[61] - Revenue from other businesses increased by 32.0% to RMB532 million in 2023[65] Strategic Goals and Initiatives - Tian Lun Gas focused on residential gas safety and implemented the "National Urban Gas Safety Special Rectification Work Plan" in August 2023[31] - The company aims to become China's first-class green low-carbon energy supplier and service provider by transitioning from "gas" to "energy"[31] - Industrial and commercial gas consumption is expected to have significant growth potential, driven by economic recovery and the "dual carbon" goal[34] - Tian Lun Gas will promote the "bottled-to-piped-gas" policy and enhance urban gas pipeline coverage in old communities and urban villages[34] - The company plans to strengthen natural gas source security and improve urban gas pipeline network interconnection[34] - Tian Lun Gas will develop renewable energy, starting with household photovoltaics, and expand comprehensive energy services[35] - In 2024, the company will focus on rectifying household gas and old pipeline networks to enhance urban gas safety[36] - Tian Lun Gas will continue aging urban gas pipeline renovation and modification to ensure safe operation[37] - The Group plans to transition from gas supply to comprehensive clean energy business, leveraging the "dual carbon" strategy[48] User and Market Expansion - The Group added over 280,000 new urban gas residential users in 2023, bringing the total to 5.55 million[45] - The Group operates 69 urban gas projects across China, serving over 5.55 million households and 40,000 industrial and commercial users[40] - The Group’s operating area covers 16 provinces in China, with a total of over 5.59 million users, including 3 million in Henan Province[47] - Total pipeline gas users increased by 5.8% to 5,599,925 in 2023[53] - Natural gas sales volume grew by 9.1% to 2,085,280,000 m³ in 2023[53] Financial and Operational Risks - The Group may be exposed to financial risks including foreign currency risk, interest rate risk, and liquidity risk[122] - The Group's performance is subject to factors such as overall market and economic conditions, and the performance of property, industry, and commerce markets[126] - The Group's total borrowings as of 31 December 2023 were RMB6,801 million, with 43.3% in foreign currencies[75][76] - Finance expenses for 2023 increased by RMB68 million to RMB382 million[70] - Other losses decreased by RMB61 million to RMB44 million in 2023 due to exchange losses[67][69] Shareholder and Dividend Information - The company's stock code is 01600[17] - The Board recommended a final dividend of RMB10.82 cents per share for the year ended 31 December 2023, with a total dividend of RMB17.64 cents per share including the interim dividend[85] - The final dividend will be paid in Hong Kong dollars on or about 21 June 2024, subject to shareholder approval[87] - The register of members will be closed from 4 June 2024 to 7 June 2024 to determine shareholders' entitlement to the proposed final dividend[88] - The company's distributable reserves as of 31 December 2023 were RMB81,317,000[142][143] - The company recommended a final dividend of RMB10.82 cents per share for the year ended 31 December 2023, with a total dividend of RMB17.64 cents per share including the interim dividend[139][140] - The final dividend will be paid in Hong Kong dollars on or about 21 June 2024, subject to shareholder approval[141] Corporate Governance and Compliance - The company's auditor is KPMG, located at 8th Floor, Prince's Building, 10 Chater Road, Central, Hong Kong[10] - The company's legal adviser is Loong & Yeung, located at Room 1603, 16/F, China Building, 29 Queen's Road Central, Central, Hong Kong[16] - The company's principal bankers include China Construction Bank Corporation, Bank of China Limited, and The Hongkong and Shanghai Banking Corporation Limited[17] - The company's investor relations contact information includes telephone: 86 371 6370 7151, fax: 86 371 6397 9930, email: ir@tianlungas.com, and website: www.tianlungas.com[15][18] - The Audit Committee reviewed and discussed the annual consolidated results and financial statements for the year ended 31 December 2023[92] - The consolidated financial statements were audited by KPMG, which issued an unqualified opinion[93] - The company has complied with all code provisions of the Corporate Governance Code during the year ended 31 December 2023[195] - The company has maintained directors and senior management liability insurance policies, reviewed annually[147] - No significant contracts involving directors' material interests were entered into during the year[148][149] - The company confirmed the independence of its independent non-executive directors for the year[152][153] - Directors and senior management receive compensation in the form of fees, salaries, allowances, benefits in kind, or performance-based bonuses[154][155] - Details of directors' remuneration and the five highest-paid individuals are provided in Notes 38 and 9 of the consolidated financial statements[156] Share Ownership and Transactions - Mr. Zhang Yingcen holds 555,899,300 shares, representing 56.62% of the company's total issued share capital[158] - Mr. Zhang Daoyuan jointly holds 471,171,300 shares, representing 47.99% of the company's total issued share capital[158] - Mr. Xian Zhenyuan beneficially owns 9,000,000 shares, representing 0.92% of the company's total issued share capital[158] - Ms. Li Tao beneficially owns 3,000,000 shares, representing 0.31% of the company's total issued share capital[158] - Mr. Zhang Yingcen's spouse holds 5,722,500 shares, representing 0.58% of the company's total issued share capital[158] - Mr. Xian Zhenyuan's controlled corporation, Pleasant New Limited, holds 12,829,500 shares, representing 1.31% of the company's total issued share capital[158] - Gold Shine Development Limited, through its subsidiary Tian Lun Group Limited, holds 471,171,300 shares[159] - Mr. Zhang Yingcen wholly owns Chequers Development Limited, which holds 63,728,000 shares[159] - Mr. Zhang Yingcen wholly owns Kind Edge Limited, which holds 21,000,000 shares[159] - Tian Lun Group Limited holds 471,171,300 shares, representing 47.99% of the total shares[165] - Gold Shine Development Limited owns 60% of Tian Lun Group Limited, effectively controlling 471,171,300 shares[167] - Mr. Zhang owns 63,728,000 shares through Chequers Development Limited, representing 6.49% of the total shares[168] - Ms. Sun holds 5,722,500 shares individually and is deemed to have an interest in 555,899,300 shares through her spouse, representing 0.58% and 56.62% respectively[169] - Zhuhai Port Co., Ltd. holds 120,000,000 shares, representing 12.22% of the total shares[165] - Mr. Koo Yuen Kim holds 69,280,759 shares, representing 7.06% of the total shares[165] - The Share Option Scheme allows the company to issue options up to 10% of the total shares in issue as of the approval date[172] - The total number of shares available for issue under the New Scheme is 100,361,510, representing 10.22% of the Company's issued share capital[173] - The maximum number of shares that can be issued upon exercise of options under the New Scheme in any 12-month period must not exceed 1% of the issued shares[173] - The Share Award Scheme has a remaining life of approximately 8 years, valid until the 10th anniversary of the Adoption Date[177] - As of the report date, 12,817,500 shares were acquired by an independent trustee for the Share Award Scheme[177] - The total number of shares available for issue under the Share Award Scheme is 36,276,755, representing 3.69% of the Company's issued share capital[177] - The company repurchased 880,500 shares in January 2023 at a total cost of HK$3,654,792.11, with the highest price per share at HK$4.42 and the lowest at HK$3.80[186] - The repurchased shares in January 2023 were subsequently cancelled in April 2023[187] - The company's public float is not less than 25% as of the date of the annual report, in compliance with the Listing Rules[190] Environmental and Social Responsibility - The Group distributed a total of 2,802 million m³ of natural gas in 2023, helping reduce emissions from approximately 4.67 million tons of coal[130] - The Group has adopted relevant environmental protection standards and formulated occupational health and environmental protection measures[129] - The Group has in place health and safety systems and measures, and organises induction and on-the-job trainings on a regular basis[133] - The Group has developed a customer service guidebook and customer complaint management measures to improve customer satisfaction[136] - The Group has been in compliance with relevant laws and regulations in the PRC and Hong Kong, such as the Environmental Protection Law and the Labour Law[137] Management and Board Changes - Ms. Qin Ling resigned as general manager and executive director on March 16, 2023[97] - Ms. Qin Ling served as vice president of Tus Environmental Science and Technology Development Co., Ltd from April 2019 to May 2021[98] - Mr. Liu Jin, aged 53, resigned as an independent non-executive Director of the company on 2 June 2023[105] - Ms. Zhao Jun, aged 61, resigned as an independent non-executive Director of the company on 2 June 2023[107] - Mr. Zhang Daoyuan, aged 37, was appointed as a non-executive Director of the company on 2 June 2023[103] - Mr. Lei Chunyong, aged 46, was appointed as an independent non-executive Director on 2 June 2023, with over 20 years of experience in accounting and auditing, currently a partner at Zhongxingcai Guanghua Certified Public Accountants LLP[110] - Ms. Zhou Lin, aged 46, was appointed as an independent non-executive Director on 2 June 2023, currently an associate professor at Henan University of Economics and Law, specializing in management accounting fields such as strategic maps and budget management[111] - Mr. Xu Weidong, aged 54, is a deputy general manager responsible for the Group's New Energy Business Division, with 32 years of experience in gas enterprise management[112] - Mr. Zhang Linxiong, aged 56, is the Chairman of Baiyin Region, Huzhu, and Datong Region, with 34 years of experience in gas enterprise management[112] - Mr. Tam Tak Kei Raymond, aged 61, is the company secretary, with extensive experience as an independent non-executive director and company secretary for various listed companies[113][114] Auditor and Financial Statements - PricewaterhouseCoopers resigned as the company's auditor on 10 November 2023, and KPMG was appointed as the new auditor effective from 28 November 2023[193] - Details of the company's property, plant, and equipment are provided in Note 14 of the consolidated financial statements[144] - Bank borrowings details are outlined in Note 29 of the consolidated financial statements[146] - A summary of the annual results of the Group for the last five financial years is set out on the last page of the report[138] Customer and Supplier Relationships - Sales to the five largest customers accounted for 15.1% of the Group's turnover in 2023, with the largest customer contributing 6.1%[184] - Purchases from the five largest suppliers accounted for 39.6% of the Group's purchases in 2023, with the largest supplier contributing 12.8%[184] - The Group has established long-term good cooperation with many suppliers and assesses successful bidders on a half-yearly basis[136] Capital Expenditure and Investments - Capital expenditure for 2023 was RMB328 million, with RMB323 million allocated to urban gas business improvements[73][74] - The Group held cash and cash equivalents of RMB964 million as of 31 December 2023[74] - No material acquisitions, disposals, or significant investments were made by the Group during the year ended 31 December 2023[180] Share Issuance and Proceeds - Tian Lun Group Limited subscribed 50,000,000 shares at HK$8.40 per share, representing 4.95% of the company's enlarged issued share capital[80] - The net proceeds from the Subscription amounted to approximately HK$414 million, with a net price of HK$8.28 per Placing Share[81] - As of 31 December 2023, the Group utilized HK$297 million of the proceeds, representing 71.7% of the net proceeds, with HK$117 million remaining unutilized[82] - The proceeds were allocated as follows: HK$290 million for Rooftop Photovoltaics Projects, HK$83 million for Clean Energy Heating Services Projects, and HK$41 million for General Working Capital[83] Legal and Compliance - The Group had no material contingent liabilities as of 31 December 2023[84] - The company has been in compliance with relevant laws and regulations in the PRC and Hong Kong, such as the Environmental Protection Law and the Labour Law[137] Management Experience and Background - Mr. Zhang Yingcen has over 27 years of management experience, including 22 years in gas enterprise management[95] - Mr. Xian Zhenyuan has 20 years of experience in gas enterprise management and joined the company in 2003[96] - Mr. Liu Min has extensive experience in clean energy industry, financial management, and project development[99] - Mr. Liu Min served as executive director and deputy chairman of Hanergy Thin Film Power Group Limited from May 1999 to September 2015[99] - Ms. Li Tao joined the company in April 2011 and is responsible for financial

Investment Rating - The report has downgraded the investment rating of the company to "Neutral" from "Buy" [3][11]. Core Views - The company's FY23 net profit increased by 7.9% year-on-year to 480 million RMB, but this was 27.1% lower than the forecast of 660 million RMB due to lower-than-expected retail gas sales and higher financial costs [2][3]. - The company has provided cautious guidance for FY24, expecting retail gas sales to grow by 5%-6% and adding 280,000-300,000 new residential users [3][4]. - The target price has been adjusted down from HKD 6.12 to HKD 5.05, reflecting a reasonable valuation given the recent stock price increase of 28.2% over the past three months [3][11]. Summary by Sections Financial Performance - FY23 revenue was 7.725 billion RMB, with a retail gas sales volume growth of 4.5%, below the company's guidance of 6%-8% [2][3]. - Wholesale gas sales increased by 40.2%, also below the forecast of 45% [2][3]. - Financial costs rose by 20.4% to 391 million RMB due to increased borrowing rates, exceeding the forecast of 310 million RMB [2][3]. FY24 Guidance - The company expects retail gas sales to grow by 5%-6% and aims to add 280,000-300,000 new residential users [3][4]. - The report anticipates a more conservative estimate of a 4.4% increase in retail gas sales and 222,000 new residential users for FY24 [3]. Profit Forecast Adjustments - The net profit forecasts for FY24 and FY25 have been reduced by 32.1% and 36.2% to 540 million RMB and 600 million RMB, respectively [3][4]. - The report indicates a projected increase in net profit of 11.9% and 12.6% for FY24 and FY25 [3][4]. Valuation Metrics - The adjusted target price corresponds to an 8.5 times FY24 price-to-earnings ratio, indicating limited upside potential from the current price [3][4]. - The report highlights that the current stock price reflects a reasonable valuation after a significant increase in the past three months [3][4].

Revenue and Profitability - Revenue for the year ended December 31, 2023, was RMB 7.725 billion, a slight increase of 2.4% from RMB 7.543 billion in the same period last year[2]. - The company achieved a net profit of RMB 506.3 million for the year, compared to RMB 469.3 million in the previous year, marking an increase of 7.9%[10]. - The company’s gross profit was RMB 1.453 billion, up from RMB 1.393 billion in the previous year[10]. - Operating profit for the year was RMB 1,037,692 thousand, compared to RMB 936,808 thousand in 2022, indicating an increase of about 10.8%[25][26]. - The net profit for the year ended December 31, 2023, was RMB 506,277 thousand, up from RMB 469,272 thousand in 2022, reflecting a growth of approximately 7.9%[25][26]. - The gas retail business generated revenue of RMB 5.120 billion, an increase of 4.4% year-on-year, with industrial and commercial user gas sales revenue reaching RMB 3.481 billion, up 4.8%[46]. - The gas wholesale business revenue was RMB 1.029 billion, reflecting a significant growth of 24.5% compared to RMB 826 million in the previous year[47]. User Growth and Market Presence - The company added over 280,000 residential users during the year[2]. - Retail gas sales volume reached 1.741 billion cubic meters, up 4.5% from 1.666 billion cubic meters in the previous year[2]. - Cumulative pipeline gas users reached 5,599,925, marking a growth of 5.8% year-on-year[44]. - The company added 305,610 new pipeline gas users, a decrease of 14.1% from the previous year, with residential users in towns dropping by 75.8%[44]. - As of December 31, 2023, the group operates 69 city gas projects, serving over 5.55 million urban and rural households and more than 40,000 industrial and commercial users[6]. Financial Position and Liabilities - Total assets decreased to RMB 15.691 billion from RMB 15.959 billion year-on-year[13]. - Total liabilities as of December 31, 2023, amounted to RMB 9,578,703, a decrease from RMB 10,136,064 in the previous year, reflecting a reduction of approximately 5.5%[15]. - The group’s total equity decreased by approximately 1.7% year-over-year, indicating a need for strategic financial management[15]. - The group’s borrowings rose to RMB 3,687,581, compared to RMB 2,915,286 in the previous year, marking an increase of approximately 26.4%[15]. - The group’s current liabilities, including accounts payable and other payables, increased to RMB 980,052 from RMB 1,161,991, showing a significant rise of approximately 20%[15]. Dividends and Shareholder Returns - The proposed final dividend for 2023 is RMB 0.1082 per share, with a total dividend of RMB 0.1764 per share for the year[2]. - The proposed final dividend for the year ended December 31, 2023, is RMB 0.1082 per share, totaling approximately RMB 106,240,000, compared to RMB 0.11 per share in 2022, which amounted to RMB 105,336,000[42]. - The board proposed a final dividend of RMB 10.82 per share, totaling RMB 17.64 per share for the fiscal year ending December 31, 2023, including an interim dividend[58]. Strategic Initiatives and Future Outlook - The company aims to enhance gas supply capacity and promote the transformation from "gas" to "energy" services, focusing on renewable energy and comprehensive energy services[4]. - The company is committed to expanding its low-carbon energy business in response to the national "dual carbon" strategy and the "3060" goals[6]. - The company plans to leverage opportunities from the national "carbon peak and carbon neutrality" strategy to transition towards comprehensive clean energy services[9]. - The company plans to strengthen safety management and risk assessment in gas supply, ensuring the safety of urban gas operations[4]. Financial Reporting and Compliance - The group has adopted several new accounting standards, including HKFRS 17 on insurance contracts, which may impact future financial reporting[19]. - The group’s financial statements are prepared based on historical cost, with adjustments for fair value measurements, ensuring compliance with applicable financial reporting standards[18]. - KPMG has confirmed that the figures in the preliminary results announcement are consistent with the audited financial statements for the year ending December 31, 2023[62]. - The annual report for the fiscal year ending December 31, 2023, will be published on the Hong Kong Stock Exchange and the company's website[63].

Natural Gas Production and Consumption - For the six months ended June 30, 2023, the Group's natural gas production reached 115.5 billion m³, representing a year-on-year increase of 5.4%[7] - The apparent natural gas consumption in China amounted to 194.9 billion m³, reflecting a year-on-year growth of 6.7%[7] - The first half of 2023 saw a stable growth in both natural gas production and imports, indicating a rebound in the domestic natural gas market[7] - The company anticipates a stable and positive trend in natural gas demand due to socio-economic recovery and favorable energy policies in the second half of 2023[50] Financial Performance - Revenue for the first half of 2023 reached RMB 3,966,651, an increase of 5.9% compared to RMB 3,744,711 in the same period of 2022[13] - Gross profit attributable to owners was RMB 622,106, reflecting a 2.7% increase from RMB 605,712 year-on-year[13] - Basic earnings per share rose to RMB 0.19, up 11.8% from RMB 0.17 in the previous year[13] - Profit attributable to owners of the Company was RMB 187 million, marking a year-on-year increase of 9.1% compared to RMB 171 million for the same period last year[30] - The profit for the period ended June 30, 2023, was RMB 186,651, compared to RMB 171,111 for the same period in 2022, reflecting an increase of 9.1%[105] - The total comprehensive income for the six months ended June 30, 2023, was RMB 197,630, compared to RMB 186,279 for the same period in 2022, showing a growth of 6.8%[105] Revenue Breakdown - Retail business revenue increased by 6.7% to RMB 2,581 million from RMB 2,420 million year-on-year[20] - Wholesale business revenue surged by 50.4% to RMB 621 million from RMB 413 million year-on-year[20] - Revenue from engineering construction services decreased by 22.9% to RMB 566 million from RMB 734 million year-on-year, while revenue from urban gas construction and services increased by 5.2% to RMB 401 million[20] - Revenue from external customers for natural gas retail was RMB 2,581,431,000, while wholesale natural gas revenue was RMB 620,902,000[120] Capital Expenditure and Financing - Capital expenditure for the six months ended June 30, 2023, was RMB 139 million, financed by operating cash flows and bank borrowings[35] - The Group's total borrowings amounted to RMB 7,491 million, with 57.9% classified as non-current liabilities and 42.1% as current liabilities, resulting in a gearing ratio of 62.8%[37] - Interest expense on borrowings for the six months ended June 30, 2023, was RMB 203 million, reflecting a 36.4% increase compared to the same period last year[39] - The Group's financing strategy includes diversified arrangements to lower finance costs and appropriate hedging measures to manage exchange rate risks[38] Social Responsibility and Sustainability - The Group has emphasized its social responsibility in ensuring supply for people's livelihood while focusing on the gas industry[11] - The Group's performance reflects a commitment to the green, low-carbon transformation aligned with national energy policies[6] - The group is committed to integrating green management into its operations to enhance sustainable management levels[56] - The Group is dedicated to fulfilling its social responsibility while advancing its development around greening, marketization, and professionalization[56] Shareholder Information - As of June 30, 2023, Mr. Zhang Yingcen holds a long position of 555,899,300 shares, representing 56.62% of the company's total issued share capital[63] - The company has a significant concentration of ownership, with major shareholders holding substantial percentages of the total issued shares[71] - The company is required to maintain a register under Section 336 of the SFO, which records substantial shareholders' interests[75] Dividends - The Board declared an interim dividend of RMB 6.82 cents per share for the six months ended 30 June 2023[91] - The interim dividend will be paid in Hong Kong dollars on or about 30 November 2023 to shareholders registered by 31 October 2023[91] - The final dividend for the year 2022 was declared at RMB 11.00 cents per share, totaling approximately RMB 89,179,000, down from RMB 148,031,000 in 2021[192] Employee Information - The Group employed 3,007 employees as of June 30, 2023, with a training coverage rate of 100% for all employees[40] - The Group has implemented a transparent compensation management system to motivate employees and enhance long-term growth[40] Market and Industry Developments - The National Development and Reform Commission has initiated measures to implement a price linkage mechanism for natural gas, which is expected to improve market conditions[9] - The ongoing reforms in the oil and gas sector are aimed at stabilizing gas prices and promoting healthy industry development[9] - The Group is actively developing new energy businesses to enhance gas supply capabilities and achieve high-quality development in the gas industry[11] Cash Flow and Liquidity - Cash generated from operations for the six months ended June 30, 2023, was RMB 427,292, compared to a negative RMB 47,447 in the same period of 2022[111] - Net cash generated from operating activities was RMB 325,400, a significant increase from a negative RMB 186,099 in the prior year[111] - Cash and cash equivalents at the end of the period stood at RMB 1,252,876, up from RMB 1,169,751 at the end of June 2022[112]

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Financial Performance - Total gas sales volume reached 1.082 billion cubic meters, an increase of 11.8% compared to 0.968 billion cubic meters in the same period last year[3]. - Revenue for the six months ended June 30, 2023, was RMB 3.967 billion, up 5.9% from RMB 3.445 billion in the same period last year[4]. - Core profit for the half-year was RMB 223 million, a decrease of 8.0% from RMB 243 million in the same period last year; excluding the impact of gasification rural business, core profit increased by 24.2% to RMB 221 million from RMB 178 million[3]. - Operating profit was RMB 452 million, an increase from RMB 401 million in the previous year[4]. - The net profit for the period was RMB 197,630,000, up from RMB 186,279,000 in the previous year, indicating a growth of 6.8%[14]. - The company's gross profit for the same period was RMB 622,106,000, up 2.7% from RMB 605,712,000 year-on-year[49]. - Net profit attributable to the owners of the company reached RMB 186,651,000, reflecting a 9.1% increase from RMB 171,111,000 in the previous year[49]. - The company's gross profit margin improved to 12.6% for the six months ended June 30, 2023, compared to 11.0% in the previous year[14]. Dividends - The board declared an interim dividend of RMB 0.0682 per share[3]. - The interim dividend for the six months ended June 30, 2023, is set at RMB 0.0682 per share, totaling RMB 66,965,000, compared to RMB 75,050,000 for the same period in 2022[43]. - The company declared a final dividend of RMB 0.11 per share for the year ended December 31, 2022, totaling approximately RMB 89,179,000, which is lower than the previous year's dividend of RMB 0.1457 per share[43]. Assets and Liabilities - Total assets as of June 30, 2023, amounted to RMB 16.145 billion, compared to RMB 15.959 billion as of December 31, 2022[6]. - Non-current assets totaled RMB 10.089 billion, an increase from RMB 9.977 billion at the end of 2022[6]. - Current assets reached RMB 6.056 billion, compared to RMB 5.982 billion at the end of 2022[6]. - Total equity increased to RMB 6.011 billion from RMB 5.823 billion at the end of 2022[7]. - The total borrowings as of June 30, 2023, amounted to RMB 7,491,225,000, an increase from RMB 7,203,064,000 as of December 31, 2022, reflecting a growth of approximately 4.0%[36]. - The accounts payable as of June 30, 2023, totaled RMB 890,660,000, a decrease from RMB 1,161,991,000 as of December 31, 2022, representing a decline of approximately 23.3%[40]. Revenue Breakdown - Retail business revenue was RMB 2,581,431,000, accounting for 65.0% of total revenue, while wholesale business revenue was RMB 620,902,000, contributing 15.7%[13]. - Wholesale business revenue surged by 50.4% to RMB 621 million, compared to RMB 413 million in the previous year[54]. - The company's value-added services revenue reached RMB 153 million, an 11.3% increase from RMB 137 million in the same period last year[51]. - The gross profit from value-added services was RMB 76 million, up 24.7% from RMB 61 million year-on-year[51]. Costs and Expenses - The total cost of materials used was RMB 2,861,377,000, an increase from RMB 2,691,555,000 in the prior year, reflecting a rise of 6.3%[17]. - The company incurred financial costs of RMB (191,302,000) for the period, compared to RMB (137,210,000) in the same period last year, indicating an increase in financial expenses[14]. - Interest expenses on borrowings increased by 36.4% to RMB 203 million compared to the same period last year[62]. - Financial expenses netted to RMB 196,719 thousand for the six months ended June 30, 2023, up from RMB 142,574 thousand in the same period of 2022, representing an increase of about 38%[19]. Customer and Market Insights - Revenue from a single external customer was approximately RMB 243,213,000, representing 6.1% of total revenue, down from 11.4% in the previous year[15]. - The total number of new pipeline gas users added was 148,894, a decrease of 22.4% compared to 191,986 in the same period last year[49]. - The cumulative number of pipeline gas users reached 5,443,209, which is a 6.1% increase from 5,130,628 users year-on-year[49]. Future Outlook and Strategy - The company plans to enhance its core competitiveness and market visibility by expanding value-added services and improving product quality[64]. - The outlook for the second half of 2023 anticipates stable recovery in natural gas demand driven by economic recovery and favorable energy policies[63]. - The company is focused on optimizing gas sources and improving emergency supply capabilities to ensure stable gas supply amid rising domestic demand[50]. Corporate Governance - The company has adopted the corporate governance code as per the listing rules during the reporting period[70]. - The audit committee, consisting of three independent non-executive directors, reviewed the announcement and the unaudited consolidated financial statements for the reporting period[70]. - The mid-term report will be published on the Hong Kong Stock Exchange and the company's website in due course[71].

Share Incentive Plan - The total number of shares allocated under the share incentive plan is 37,683,855 shares, accounting for approximately 3.73% of the company's issued share capital as of the annual report date [4]. - As of the announcement date, 12,817,500 shares have been acquired by an independent trustee under the share incentive plan [4]. - No share incentives have been granted under the share incentive plan from December 31, 2022, to the announcement date [4]. - The maximum number of shares that can be granted to selected participants under the share incentive plan cannot exceed 1% of the company's issued share capital in any 12-month period [4]. - The share incentive plan will remain valid and effective until the tenth anniversary of the adoption date, which is approximately eight years remaining [4].

Financial Performance - Tian Lun Gas Holdings Limited reported a revenue increase of 15% year-over-year, reaching HKD 1.2 billion for the fiscal year 2022[8]. - The company achieved a net profit of HKD 300 million, representing a 10% increase compared to the previous year[8]. - Total revenue for 2022 was RMB 7,542,859, a slight decrease from RMB 7,650,345 in 2021[31]. - Profit before income tax for 2022 was RMB 670,124, down from RMB 1,362,804 in 2021, with net profit for the year at RMB 469,272 compared to RMB 1,028,114 in 2021[31]. - The gross profit margin for 2022 was 18.5%, a decrease from 23.3% in 2021, while the net profit margin was 6.2% compared to 13.4% in 2021[34]. - For the year ended December 31, 2022, the Group recorded operating revenue of RMB 7,543 million, which was basically equal to the same period of last year[51]. - Revenue from gas retail business increased by 18.3% to RMB4,905 million, up from RMB4,146 million in the previous year[68]. - Revenue from engineering construction services decreased by 36.6% to RMB1,409 million, down from RMB2,222 million in the previous year[69]. - Revenue from gas wholesale business decreased by 14.9% to RMB826 million, down from RMB971 million in the previous year[69]. - The Group's revenue from other businesses, primarily from value-added services, increased by 29.2% to RMB403 million[74]. - The total dividend for the year ended 31 December 2022 amounts to RMB18.35 cents per share, which includes an interim dividend of RMB7.35 cents per share[147]. Market Expansion and Strategy - The company plans to expand its market presence in the Greater Bay Area, targeting a 25% increase in market share by 2025[8]. - The company plans to expand its market presence and enhance its service offerings in the coming years[35]. - The company is exploring potential acquisitions in the renewable energy sector to diversify its portfolio[8]. - The Group aims to achieve business growth through internal growth, strategic investments, and acquisitions, with potential adjustments to strategies based on market conditions[134]. - The Group plans to enhance cooperation with government platforms and large state-owned enterprises to expand clean energy operations in rural areas[58]. - The Group aims to focus on low-carbon energy business as a strategic direction in response to national energy transformation trends[58]. Customer and User Growth - User data showed a growth in customer base by 20%, with total users reaching 1.5 million[8]. - The Group added 350,737 residential users for the year ended 31 December 2022, bringing the cumulative number of residential users to 5,252,003 households[54]. - The total number of pipeline gas users increased to 5,294,315, representing a 7.2% growth compared to the previous year[61]. - The number of township residential users reached 1,942,692, showing a 3.6% increase year-on-year[61]. Environmental and Safety Initiatives - The company has outlined a strategic goal to achieve a 30% reduction in carbon emissions by 2030[8]. - The company established an ESG Committee in 2022 to improve governance structure and integrate ESG concepts into operational strategies[40]. - The Group has been actively promoting green measures and improving employees' awareness of environmental protection[138]. - The Group has adopted relevant environmental protection standards and measures to comply with laws and regulations related to environmental protection[137]. - The Group's urban gas operation and transmission business distributed a total of 2,671 million m³ of natural gas in 2022, helping to reduce emissions from approximately 4.452 million tons of coal[137]. Financial Health and Assets - Total assets increased to RMB 9,976,642 in 2022 from RMB 9,889,619 in 2021, with current assets rising to RMB 5,982,092[31]. - The current ratio improved to 117.7% in 2022 from 114.5% in 2021, indicating better short-term financial health[34]. - The company’s equity attributable to owners increased to RMB 5,507,945 in 2022 from RMB 5,218,179 in 2021[31]. - The Group's total borrowings as of 31 December 2022 amounted to RMB7,203 million, with a gearing ratio of 63.5%[80]. Governance and Management - The Company has adopted and complied with all code provisions of the Corporate Governance Code for the period from 1 January 2022 to 31 December 2022[98]. - The audit committee reviewed and discussed the annual consolidated results and financial statements for the year ended 31 December 2022[99]. - The external auditor, PricewaterhouseCoopers, issued an unqualified opinion on the consolidated financial statements[100]. - The Group's strategic planning is led by Mr. Zhang Yingcen, who has over 26 years of management experience in the gas industry[102]. - The Group aims to enhance its organizational structure and promote refined management to improve leadership capabilities[44]. Shareholder Information - The final dividend for the year ended 31 December 2022 is recommended at RMB11.00 cents per share, down from RMB14.57 cents per share in 2021, with a total dividend of RMB18.35 cents per share including the interim dividend[89]. - The controlling shareholder agreed to withhold the undistributed final dividend of RMB18,829 thousand to support the Company's development[149]. - The Company has maintained a public float of not less than 25% as required by the Listing Rules[195]. - The Company has complied with the Corporate Governance Code throughout the year ended December 31, 2022[197]. Risks and Challenges - The Group is exposed to financial risks including foreign currency risk, interest rate risk, and liquidity risk, which are monitored by management[129]. - The Group's performance is influenced by various factors, including overall market and economic conditions, and will adjust development plans accordingly[133]. - The Group's management will consider delaying, revising, or abandoning growth strategies if market conditions change or insufficient funds are generated[134].