Financial Performance - In 2024, the company recorded revenue of RMB 1,688.4 million, a decrease of 12.8% year-on-year[9]. - The net profit attributable to shareholders for the year was RMB 85.1 million, an increase of 3.5% year-on-year[9]. - The gross profit for 2024 was RMB 49.7 million, a decrease of 15.5% from RMB 58.8 million in 2023, with a gross margin of 2.9%[19][21]. - The net profit for 2024 was RMB 84.9 million, down 8.0% from RMB 92.4 million in 2023, while the profit attributable to shareholders increased by 3.5% to RMB 85.1 million[19][21]. - The company reported a cash and cash equivalents balance of RMB 360.3 million as of December 31, 2024, a slight decrease of 0.9% from RMB 363.7 million in 2023[21]. - The total assets of the company decreased by 2.5% to RMB 4,450.6 million as of December 31, 2024, compared to RMB 4,564.4 million in 2023[21]. - The current ratio as of December 31, 2024, was 0.31, a decrease from 0.55 in 2023, indicating a decline in liquidity[55]. - The group recorded a total revenue of RMB 1,688.4 million for the year 2024, a decrease of 12.8% compared to RMB 1,935.6 million in 2023, primarily due to reduced income from natural gas trading and distribution[36]. - EBITDA for 2024 reached RMB 305.0 million, a decline from RMB 371.0 million in 2023[38]. - Other income and gains for 2024 amounted to RMB 54.8 million, down from RMB 69.7 million in 2023, including bank interest income of RMB 2.3 million and government subsidies of RMB 16.6 million[39]. - Administrative expenses for 2024 were RMB 136.3 million, slightly lower than RMB 146.8 million in 2023, indicating stable operational costs[40]. - Financing costs decreased by 36.3% to RMB 110.7 million in 2024 from RMB 173.7 million in 2023, attributed to the shift to RMB bank loans[43]. - The company has no reserves available for distribution to equity holders as of December 31, 2024[198]. - The company did not engage in any purchase, sale, or redemption of its listed securities during the year 2024[194]. Market and Operational Highlights - China's apparent natural gas consumption reached 426.05 billion cubic meters in 2024, growing by 8% year-on-year[8]. - The total gas sales volume of the company was 546.7 million cubic meters, a decrease of 25.5% compared to 733.6 million cubic meters in 2023[19]. - The company has six urban gas projects primarily located in Guangxi Zhuang Autonomous Region and Shanxi Province, with gas sales volume of 267.8 million cubic meters in 2024, down 6.0% from 284.8 million cubic meters in 2023[22]. - The residential gas sales volume increased by 8.1% to 82.3 million cubic meters in 2024, while non-residential gas sales volume decreased by 11.2% to 185.5 million cubic meters[22]. - The total natural gas sales volume to residential and non-residential users reached 267.8 million cubic meters in 2024, a decrease of 6% compared to 2023[23]. - The total trade volume for LNG and CNG in 2024 was 269.1 million cubic meters, a decrease of 37.9% from 433.2 million cubic meters in 2023[24]. - The LNG receiving station project had a total unloading volume of 6,340.6 million cubic meters in 2024, down 8.2% from 6,906.9 million cubic meters in 2023[27]. - The company added 33,084 new gas pipeline users in 2024, bringing the total to 569,369 users, with residential users accounting for 565,467[23]. Strategic Initiatives and Acquisitions - The company acquired 49% of Beijing Unait Energy Engineering Technology Co., Ltd., enhancing its core competitiveness in the new energy sector[12]. - The company completed the acquisition of assets related to the North Seven Business Park Energy Center project, aligning with national dual carbon policy[12]. - The company is actively expanding its clean and low-carbon business and positioning itself in the new energy sector to contribute to the new energy supply structure[18]. - The acquisition of assets related to the Beiqijia Business Park Energy Center generated revenue of RMB 8.7 million in 2024, with a segment profit of RMB 4.1 million[31]. - The company is focusing on energy storage business development, with the Yangzhou project generating revenue of RMB 0.4 million in 2024[32]. - The group plans to focus on the "dual carbon" strategy, enhancing its clean energy and renewable energy business while optimizing energy structure and accelerating industrial upgrades[35]. Governance and Management - The company has adopted corporate governance practices in compliance with the corporate governance code for the fiscal year ending December 31, 2024[89]. - The management team has extensive experience in gas network operations and safety management, with over 20 years in the industry[80]. - The board is committed to high standards of corporate governance and has implemented self-regulatory practices[89]. - The company has appointed Mr. Li Weiqi as the Chairman of the Board and Mr. Wu Haipeng as the CEO for the year 2024[109]. - The board held a total of 5 meetings in 2024, with all directors attending 100% of the meetings[93]. - The company emphasizes the importance of corporate governance and has adopted internal guidelines requiring board approval for significant matters such as major asset acquisitions and dividend distributions[92]. - The company has established a formal and transparent procedure for the selection and nomination of new directors[122]. - The company has arranged appropriate liability insurance for its directors and executives[108]. - The company secretary ensures smooth communication within the board and provides necessary professional development assistance[148]. Risk Management and Compliance - The group has established a risk management framework to assess and prioritize risks based on their potential financial impact and management's focus[156]. - The board has confirmed the effectiveness of the risk management and internal control systems for the year 2024[154]. - The group has a zero-tolerance policy towards bribery, extortion, fraud, and money laundering, maintaining high standards of integrity and transparency[158]. - The company has implemented reporting procedures for employees and the public to raise concerns about potential misconduct internally[157]. - The company has not faced any significant fines or penalties due to non-compliance with laws and regulations during 2024[184]. Shareholder Communication - The company emphasizes regular, effective, timely, and fair communication with shareholders regarding all significant matters affecting the group[169]. - The company is committed to clear, detailed, and timely disclosure of information to shareholders, including regular updates and responses to shareholder concerns[170].

Core Viewpoint - North Gas Blue Sky (06828.HK) is making significant progress in its new energy transformation strategy in 2024, optimizing its business structure and expanding into the new energy sector [1][2]. Financial Performance - In 2024, North Gas Blue Sky achieved a total revenue of 1.688 billion RMB, with a net profit attributable to the parent company of 85.066 million RMB, and a pre-tax profit of 116 million RMB, reflecting a year-on-year growth of 16.4% [3]. - Despite a decline in revenue, the increase in profit highlights the company's effectiveness in cost control and business restructuring [3]. - The company successfully reduced financial costs by 36.3% through optimizing its financing structure, providing solid financial support for its transformation [3]. - The net asset size reached 1.48 billion RMB, with cash on hand amounting to 360 million RMB, indicating strong financial health [3]. Business Strategy - The overall operational strategy for 2024 focuses on leveraging the full industry chain advantages, consolidating the natural gas base, and steadily advancing new energy business [4]. - The total gas sales volume for 2024 was 546.7 million cubic meters, with the company holding a 29% stake in PetroChina's Jing-Tang project, which plays a crucial role in energy supply for the Beijing-Tianjin-Hebei region [4]. - The LNG receiving station at PetroChina Jing-Tang maintained stable operations, contributing approximately 302 million RMB in investment income for the company [4]. New Energy Business Development - North Gas Blue Sky is actively exploring opportunities in energy storage, distributed energy, and multi-energy complementarity, aiming to integrate its natural gas business with new energy [5][6]. - The company has increased the revenue share from its new energy business to nearly 1%, achieving this in less than six months, demonstrating effective execution [5]. - The acquisition of a 49% stake in Beijing Unait Energy Engineering Technology Co., Ltd. enhances the company's technical capabilities and accelerates its renewable energy business layout [7]. - The company also acquired assets related to the North Seven Business Park Energy Center project for 33 million RMB, which provides cooling and heating services to commercial and residential areas [8]. Market Potential and Future Outlook - The rapid development of the energy storage industry presents significant opportunities for North Gas Blue Sky, with a projected compound annual growth rate of 30.40%-37.1% for new energy storage installations in China from 2024 to 2030 [9]. - The company is strategically positioning itself in regions with advantageous electricity pricing policies, focusing on technology innovation and business model transformation to increase its market share in energy storage [9]. - The successful transition of the new energy business from "0 to 1" marks a critical step in the company's transformation, establishing a foundation for long-term development in technology reserves, market experience, and industry chain collaboration [10]. - With ongoing support from policies, technological advancements, and market demand, the long-term value of North Gas Blue Sky is expected to become more prominent as it continues to expand its energy storage applications [11].

Financial Performance - The group recorded revenue of RMB 1,688.4 million for the year 2024, a decrease of 12.8% compared to RMB 1,935.6 million in 2023[3]. - Profit attributable to shareholders increased by 3.5% to RMB 85.1 million in 2024, up from RMB 82.2 million in 2023[3]. - EBITDA for 2024 was RMB 305.0 million, down 17.8% from RMB 371.0 million in 2023[3]. - Total comprehensive income for the year was RMB 93.8 million, down from RMB 108.0 million in 2023[6]. - The gross profit for 2024 was RMB 49.7 million, a decline of 15.5% from RMB 58.8 million in 2023, with a gross margin of 2.9%[41]. - The total segment profit for the year was RMB 320,176,000, compared to RMB 326,528,000 in 2023, indicating a slight decrease of 1.1%[22]. - The pre-tax profit for the year was RMB 116,274,000, compared to RMB 99,868,000 in 2023, showing an increase of 16.4%[29]. - The company reported other income and gains of RMB 54,832,000, down from RMB 69,729,000 in the previous year, a decrease of 21.4%[27]. - The company's net profit attributable to shareholders for the year was RMB 85,066,000, an increase from RMB 82,161,000 in 2023, representing a growth of approximately 3.5%[33]. - The total income tax expense for the year was RMB 31,329,000, significantly higher than RMB 7,493,000 in 2023, indicating a substantial increase in tax obligations[9]. Business Segments - The clean energy and new energy business segment generated revenue of RMB 9.1 million in 2024, with a segment profit of RMB 7.5 million[3]. - The city gas operation segment generated revenue of RMB 928,085,000, up from RMB 915,202,000 in 2023, reflecting a growth of 1%[26]. - The natural gas trading and distribution segment reported revenue of RMB 751,199,000, down 26.4% from RMB 1,020,417,000 in the previous year[26]. - The clean energy and new energy business segment contributed RMB 9,147,000 in revenue, which was not present in the previous year[26]. - The company began operations in the integrated clean energy and new energy business, establishing it as a new reportable segment during the year[21]. Assets and Liabilities - Non-current assets totaled RMB 3,554.1 million as of December 31, 2024, an increase from RMB 3,419.7 million in 2023[7]. - Current liabilities increased to RMB 2,871.5 million in 2024 from RMB 2,078.7 million in 2023[8]. - Total equity attributable to shareholders rose to RMB 1,355.8 million in 2024, compared to RMB 1,261.9 million in 2023[8]. - The group's current liabilities as of December 31, 2024, are approximately RMB 1.97 billion[10]. - Total assets as of December 31, 2024, were RMB 44,506 million, with a debt-to-asset ratio of 66.7%, down from 68.9% in 2023[71]. - The total borrowings as of December 31, 2024, were RMB 23,339 million, with a leverage ratio of 52.4%, down from 53.9% in 2023[71]. Financing and Capital Structure - The group has secured a revolving loan of HKD 1 billion from a subsidiary and a preliminary offer for a syndicated loan of RMB 1 billion from a major bank[12]. - Financing costs decreased to RMB 110,664,000 from RMB 173,735,000, a reduction of 36.3%[28]. - The company plans to continue seeking low-interest debt financing to reduce overall interest costs[73]. - The company has utilized 100% of the funds raised from the capital increase and asset injection plan, totaling RMB 1,494.5 million[74]. Corporate Governance and Compliance - The financial statements are prepared in accordance with International Financial Reporting Standards and have been restated to reflect the change in presentation currency[13]. - The audit committee has reviewed the financial statements and confirmed compliance with accounting principles[91]. - The company has adopted high standards of corporate governance and complied with the relevant codes throughout 2024[87][88]. - The board has proposed amendments to the company's articles of association, pending shareholder approval[93]. Strategic Focus and Future Outlook - The company is focused on developing and operating integrated clean energy and new energy businesses[11]. - The group anticipates sufficient financial resources to continue operations based on past performance and banking relationships[10]. - The company is actively expanding its clean energy business and enhancing its natural gas supply capabilities to contribute to the new energy supply landscape[39]. - The group is focusing on the dual carbon strategy and aims to strengthen its position as a comprehensive clean energy service provider by enhancing its natural gas and renewable energy business[53]. - The company is committed to optimizing its energy structure and improving energy efficiency in response to national policies promoting green and low-carbon development[39]. Shareholder Returns - The board did not recommend a final dividend for 2024, consistent with 2023[3]. - The company will not declare dividends for the years ending December 31, 2024, and 2023, indicating a focus on reinvestment[32]. - The average number of ordinary shares issued during the year remained stable at 22,736,114,715 shares, with no adjustments made for diluted earnings per share due to the absence of convertible bonds[33]. Employee and Operational Metrics - The number of employees decreased to 564 as of December 31, 2024, from 677 in 2023[75]. - The company added 33,084 new gas pipeline users in 2024, bringing the total to 569,369 users[42]. Awards and Recognition - The group received the "ESG Environmentally Friendly Excellence Enterprise" award, reflecting its commitment to sustainable development and improved recognition in the capital market[52].

[Company Information](index=3&type=section&id=Company%20Information) The report provides detailed company information as of August 29, 2024, including board members, committee compositions, main office address, share registrar, auditor (EY), principal bankers, and company website - The report provides detailed company information as of August 29, 2024, including board members, committee compositions, main office address, share registrar, auditor (Ernst & Young), principal bankers, and company website[2](index=2&type=chunk) [Company Profile](index=4&type=section&id=Company%20Profile) The Group is positioned as a comprehensive energy service provider focusing on the entire natural gas industry chain, with Beijing Gas Group Co., Ltd. as its single largest shareholder - The Group is positioned as a comprehensive energy service provider focusing on the entire natural gas industry chain, with Beijing Gas Group Co., Ltd. as its single largest shareholder[4](index=4&type=chunk) - Its main businesses cover three segments: (1) City Gas Business; (2) Natural Gas Trading and Distribution Business; and (3) Integrated Clean Energy and New Energy Business[4](index=4&type=chunk) - In response to the national "Dual Carbon" goals, the Group is actively expanding its integrated clean energy and new energy businesses through self-construction, acquisitions, and collaborations[4](index=4&type=chunk) [Condensed Consolidated Financial Statements](index=5&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) In the first half of 2024, the company's revenue decreased by **26.8%** to **HKD 872 million** year-on-year, with gross profit down **62.5%** to **HKD 16.71 million**, while profit attributable to owners increased by **71.2%** to **HKD 55.31 million** due to increased share of profit from associates and lower finance costs, resulting in basic earnings per share of **HKD 0.24 cents** 2024 First Half Profit or Loss Key Data (HKD thousands) | Indicator | 2024 First Half (Unaudited) | 2023 First Half (Unaudited) | Year-on-year change | | :--- | :--- | :--- | :--- | | **Revenue** | **871,956** | **1,191,450** | **-26.8%** | | Cost of sales | (855,247) | (1,146,846) | -25.4% | | **Gross Profit** | **16,709** | **44,604** | **-62.5%** | | Share of profit from associates | 169,523 | 135,650 | +25.0% | | Finance costs | (64,168) | (76,700) | -16.3% | | Profit before tax | 53,816 | 46,590 | +15.5% | | **Profit for the period** | **41,546** | **43,084** | **-3.6%** | | **Profit attributable to owners of the Company** | **55,313** | **32,272** | **+71.2%** | | **Basic earnings per share (HK cents)** | **0.24** | **0.14** | **+71.4%** | [Condensed Consolidated Statement of Financial Position](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2024, the company's total assets slightly increased to **HKD 5.18 billion**, and net assets rose to **HKD 1.65 billion**, though it still faces a net current liability of approximately **HKD 1.19 billion**, indicating ongoing short-term liquidity pressure Financial Position Key Data (HKD thousands) | Indicator | June 30, 2024 (Unaudited) | December 31, 2023 (Audited) | Change | | :--- | :--- | :--- | :--- | | Total non-current assets | 4,042,237 | 3,823,828 | +5.7% | | Total current assets | 1,137,388 | 1,262,939 | -9.9% | | **Total Assets** | **5,179,625** | **5,086,767** | **+1.8%** | | Total current liabilities | 2,327,551 | 2,284,337 | +1.9% | | Total non-current liabilities | 1,201,593 | 1,176,502 | +2.1% | | **Total Liabilities** | **3,529,144** | **3,460,839** | **+2.0%** | | **Net Assets** | **1,650,481** | **1,625,928** | **+1.5%** | | Net current liabilities | (1,190,163) | (1,021,398) | +16.5% | [Condensed Consolidated Statement of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) In the first half of 2024, net cash flow from operating activities significantly decreased to **HKD 17.22 million**, but cash flow from investing activities turned into a net inflow of **HKD 136 million**, leading to an increase in period-end cash and cash equivalents to **HKD 515 million**, primarily due to dividend income from associates Cash Flow Key Data (HKD thousands) | Indicator | 2024 First Half (Unaudited) | 2023 First Half (Unaudited) | | :--- | :--- | :--- | | Net cash flows from operating activities | 17,219 | 81,036 | | Net cash flows from investing activities | 135,549 | 10,243 | | Net cash flows used in financing activities | (36,268) | (241,520) | | Net increase / (decrease) in cash and cash equivalents | 116,500 | (150,241) | | **Cash and cash equivalents at end of period** | **514,517** | **354,982** | [Summary of Notes to the Financial Statements](index=10&type=section&id=Summary%20of%20Notes%20to%20the%20Financial%20Statements) [Operating Segment Information](index=12&type=section&id=Note%205.%20Operating%20Segment%20Information) The Group's business is divided into three segments, with the City Gas Operations segment being the primary profit driver in the first half of 2024, contributing **HKD 133 million** in segment profit, while the newly established Clean Energy segment has begun generating modest revenue and profit 2024 First Half Segment Revenue and Profit (HKD thousands) | Segment | Revenue | Segment Profit | | :--- | :--- | :--- | | City Gas Operations | 528,900 | 133,269 | | Natural Gas Trading and Distribution | 341,714 | 1,988 | | Development and Operation of Integrated Clean Energy and New Energy | 1,342 | 1,179 | | **Total** | **871,956** | **136,436** | Segment Revenue Year-on-Year Change (HKD thousands) | Segment | 2024 First Half | 2023 First Half | Year-on-year change | | :--- | :--- | :--- | :--- | | City Gas Operations | 528,900 | 540,330 | -2.1% | | Natural Gas Trading and Distribution | 341,714 | 651,120 | -47.5% | | Development and Operation of Integrated Clean Energy and New Energy | 1,342 | – | N/A | | **Total** | **871,956** | **1,191,450** | **-26.8%** | [Dividends](index=17&type=section&id=Note%2011.%20Dividends) The Board of Directors does not recommend the declaration of any interim dividend for the six months ended June 30, 2024 - The Board of Directors does not recommend the declaration of an interim dividend for 2024, consistent with the policy for the same period in 2023[34](index=34&type=chunk) [Events After Reporting Period](index=19&type=section&id=Note%2016.%20Events%20After%20Reporting%20Period) After the reporting period, the company appealed a litigation judgment and completed the acquisition of a **49%** equity interest in Beijing Unite Energy Engineering Technology Co., Ltd - Regarding a lawsuit concerning the acquisition of equity in a target company, the company filed an appeal against the first-instance judgment on July 25, 2024[41](index=41&type=chunk) - On July 3, 2024, the Group completed the acquisition of a **49%** equity interest in Beijing Unite Energy Engineering Technology Co., Ltd. for a consideration of **RMB 41.65 million**[42](index=42&type=chunk) [Management Discussion and Analysis](index=21&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=21&type=section&id=Business%20Review) In the first half of 2024, the Group's total gas sales volume decreased by **20.2%** year-on-year, leading to a **26.8%** revenue decline due to reduced natural gas demand, yet profit attributable to owners grew significantly by **71.2%** driven by increased profit contribution from associate PetroChina Jingtang and effective control over finance costs, while substantial progress was made in clean energy and new energy sectors 2024 First Half Key Operating Data | Indicator | 2024 First Half | 2023 First Half | Year-on-year change | | :--- | :--- | :--- | :--- | | Total Gas Sales Volume (million cubic meters) | 263.4 | 329.9 | -20.2% | | Revenue (million HKD) | 872.0 | 1,191.5 | -26.8% | | Gross Profit (million HKD) | 16.7 | 44.6 | -62.5% | | Profit attributable to owners of the Company (million HKD) | 55.3 | 32.3 | +71.2% | - Profit growth was primarily attributable to: (i) increased share of profit from associate PetroChina Jingtang project; and (ii) lower finance costs[48](index=48&type=chunk)[70](index=70&type=chunk) [Segment Business Performance](index=24&type=section&id=Segment%20Business%20Performance) City gas sales volume increased by **15.2%**, but connection revenue decline led to a **2.1%** segment revenue decrease, while natural gas trading and distribution business saw significant contraction, and the associate LNG receiving terminal project contributed substantial profit with **7.2%** increase in offloading volume, and new clean energy businesses began contributing revenue and are actively expanding - **City Gas Business**: Gas sales volume increased by **15.2%** year-on-year to **141.9 million cubic meters**, primarily driven by the Shanxi project, but connection revenue decreased by **29.5%** due to fewer industrial user connections[52](index=52&type=chunk)[53](index=53&type=chunk) - **Natural Gas Trading and Distribution Business**: Total trading volume decreased by **42.2%** year-on-year to **114.9 million cubic meters**, with sales revenue down **47.5%** to **HKD 341.7 million**, mainly due to decreased natural gas demand[54](index=54&type=chunk) - **LNG Receiving Terminal Project**: The **29%**-owned PetroChina Jingtang project's total LNG offloading volume reached **3.32 billion cubic meters** in the first half, a **7.2%** year-on-year increase, serving as a significant source of Group profit[55](index=55&type=chunk) - **Integrated Clean Energy and New Energy Business**: Achieved substantial progress, including completing the acquisition of Beiqijia assets (contributing **HKD 1.3 million** in revenue), advancing the acquisition of a **49%** equity interest in Beijing Unite, and commencing construction of the Yangzhou user-side energy storage project[56](index=56&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk) [Financial Review](index=28&type=section&id=Financial%20Review) The company's revenue and gross profit both declined in the first half, with gross margin falling from **3.7%** to **1.9%**, yet finance costs decreased by **16.3%** to **HKD 64.2 million** due to optimized debt structure, and the increase in profit attributable to owners was mainly driven by associate contributions and reduced interest expenses, while the net debt-to-equity ratio improved from **141.9%** to **136.8%**, but the current ratio of **0.49** indicates ongoing short-term liquidity pressure - Gross margin decreased from **3.7%** in the same period last year to **1.9%**, primarily due to gas price adjustments in some city gas projects and rising upstream costs[62](index=62&type=chunk) - Finance costs decreased by **16.3%** year-on-year, mainly due to the Group replacing HKD and USD borrowings with lower-cost RMB bank borrowings since 2023[68](index=68&type=chunk) Key Financial Ratios | Indicator | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Current Ratio | 0.49 | 0.55 | | Debt-to-asset Ratio | 68.1% | 68.0% | | Gearing Ratio (Total Borrowings/Total Assets) | 53.5% | 53.3% | | Net Debt-to-equity Ratio | 136.8% | 141.9% | [Future Outlook](index=27&type=section&id=Future%20Outlook) The Group will continue to seize strategic opportunities from national energy transformation and green low-carbon development, focusing on the new energy business, particularly the industrial and commercial energy storage market, aiming to become a first-class new energy enterprise - The Group's recognition in ESG and capital markets improved, receiving "ESG Environmentally Friendly Excellence Enterprise" and "Most Promising Listed Company" awards[59](index=59&type=chunk) - Future strategic focus will be on new energy businesses, especially the industrial and commercial energy storage market with diversified application scenarios, to seek new growth points[60](index=60&type=chunk) [Other Information](index=35&type=section&id=Other%20Information) [Major Shareholders' Interests](index=35&type=section&id=Major%20Shareholders'%20Interests) As of June 30, 2024, Beijing Gas Co., Ltd. is the company's controlling shareholder, holding **66.37%** of shares, with its ultimate controlling party being Beijing Enterprises Group Company Limited, wholly owned by the Beijing SASAC Major Shareholder Holdings | Shareholder Name | Capacity | Number of Shares Held (Long Position) | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Beijing Gas Co., Ltd. | Beneficial Owner | 15,091,042,131 | 66.37% | | Beijing Gas Group | Interest in Controlled Corporation | 15,091,042,131 | 66.37% | | Beijing Enterprises Group Company Limited | Interest in Controlled Corporation | 15,091,042,131 | 66.37% | [Control Clauses in Financing Agreements](index=37&type=section&id=Disclosure%20under%20Listing%20Rule%2013.21) Several of the company's bank financing agreements contain change of control clauses, generally requiring Beijing SASAC, Beijing Enterprises Group, and Beijing Gas Group to maintain ultimate control or single largest shareholder status over the company, with banks having the right to demand immediate repayment of all outstanding amounts if these clauses are breached - Multiple bank financing agreements signed in 2023 and 2024 stipulate that if the controlling shareholder (Beijing Gas Group)'s shareholding in the company falls below **51%**, or if there are significant changes in its upstream shareholder structure, it will trigger a default, allowing banks to demand early repayment[99](index=99&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk)[103](index=103&type=chunk)

Financial Performance - The group recorded revenue of HKD 872.0 million for the first half of 2024, a decrease of 26.8% compared to HKD 1,191.5 million in the first half of 2023[1]. - Profit attributable to shareholders increased by 71.2% to HKD 55.3 million, up from HKD 32.3 million in the same period last year[1]. - EBITDA for the first half of 2024 was HKD 168.7 million, a decrease of 2.8% from HKD 173.6 million in the first half of 2023[1]. - The group reported a total comprehensive income of HKD 24.6 million for the first half of 2024, a significant improvement from a loss of HKD 63.1 million in the same period last year[3]. - Total revenue for the six months ended June 30, 2024, was HKD 871,956,000, a decrease of 26.8% from HKD 1,191,450,000 for the same period in 2023[15]. - The total segment profit for the six months ended June 30, 2024, was HKD 136,436,000, compared to HKD 114,982,000 for the same period in 2023, indicating an increase of 18.6%[15]. - The pre-tax profit for the six months ended June 30, 2024, was HKD 53,816,000, compared to HKD 46,590,000 for the same period in 2023, reflecting an increase of 15.0%[19]. - The company reported a total gas sales volume of 263.4 million cubic meters for the first half of 2024, down 20.2% from 329.9 million cubic meters in the same period of 2023[30]. - Gross profit for the first half of 2024 was HKD 16.7 million, down 62.5% from HKD 44.6 million in the same period of 2023, resulting in a gross margin of 1.9%[30]. - The company's attributable profit for the first half of 2024 was HKD 55.3 million, an increase of 71.2% compared to HKD 32.3 million in the first half of 2023[30]. Dividends and Earnings Per Share - Basic and diluted earnings per share for the first half of 2024 were both HKD 0.24, compared to HKD 0.14 in the same period last year[1]. - The board of directors did not recommend the declaration of an interim dividend for the first half of 2024, consistent with the previous year[1]. - The company did not declare an interim dividend for the six months ended June 30, 2024, consistent with the previous year[22]. Assets and Liabilities - Total assets as of June 30, 2024, amounted to HKD 4,042.2 million, an increase from HKD 3,823.8 million as of December 31, 2023[4]. - Current liabilities totaled HKD 2,327.6 million as of June 30, 2024, compared to HKD 2,284.3 million at the end of 2023[5]. - Net assets attributable to shareholders increased to HKD 1,650.5 million from HKD 1,625.9 million at the end of 2023[5]. - As of June 30, 2024, the group's current liabilities net amount is approximately HKD 1,190.2 million, indicating sufficient available funds for continued operations[7]. - Total liabilities to total assets ratio was 68.1% as of June 30, 2024, slightly up from 68.0% as of December 31, 2023[55]. - The net debt ratio improved to 136.8% as of June 30, 2024, down from 141.9% as of December 31, 2023[55]. - The group maintained a current ratio of 0.49 as of June 30, 2024, compared to 0.55 as of December 31, 2023[55]. Business Operations and Segments - The group operates three main business segments: urban gas operations, natural gas trading and distribution, and integrated clean energy and new energy development[11]. - The group has commenced the development and operation of integrated clean energy and new energy businesses, marking a new operational segment[11]. - The natural gas business experiences seasonal fluctuations, with higher demand typically observed in the second half of the year due to winter heating needs[10]. - The gas operation segment generated revenue of HKD 528,900,000, down from HKD 540,330,000, while the natural gas trading and distribution segment saw a significant decline to HKD 341,714,000 from HKD 651,120,000[15]. - The group added 15,561 new gas connection users in the first half of 2024, bringing the total number of users to 551,846[34]. - The group signed a long-term gas supply agreement with Beijing Gas Group, ensuring stable gas supply from January 1, 2024, to December 31, 2026[35]. Financing and Investments - The company completed the acquisition of a 49% stake in Beijing Unait Energy Engineering Technology Co., Ltd. for RMB 41,650,000 (approximately HKD 45,737,000) on July 3, 2024[26]. - The company has a capital commitment of HKD 57,790,000 as of June 30, 2024, compared to HKD 45,960,000 as of December 31, 2023[27]. - The group issued convertible bonds totaling HKD 300 million, maturing on December 28, 2025[52]. - The group has utilized 100% of the funds raised from the capital increase and asset injection plan for repaying existing bank loans and related interests[58]. - The company is appealing a civil judgment requiring it to pay RMB 25,088,000 related to a lawsuit, with the appeal scheduled for September 5, 2024[26]. Sustainability and Future Plans - The company aims to increase its clean low-carbon energy business in response to the rapid development of the energy storage market, which has seen a growth of over 40% in installed capacity compared to the end of 2023[29]. - The company is focusing on the green low-carbon transition, with non-fossil energy consumption expected to reach 18.9% of total energy consumption by 2024[29]. - The company is focusing on expanding its energy storage business, particularly in East and South China, with the Yangzhou project entering the construction phase[39]. - The company received the "ESG Environmentally Friendly Excellence Enterprise" award, reflecting its commitment to sustainable development[40]. Corporate Governance - The board is committed to high standards of corporate governance and has adopted practices in line with the corporate governance code[70]. - The audit committee has reviewed the accounting principles and discussed risk management and internal controls for the first half of 2024[68].

Audit and Financial Controls - The company paid HKD 4,000,000 for audit services and HKD 673,340 for non-audit services to Ernst & Young in 2023[144] - The audit committee reviewed the independence and objectivity of external auditors and the efficiency of the audit process[137] - The audit committee has the authority to investigate any matters that may significantly impact the company's operational or financial performance[141] - The company's financial controls, risk management, and internal control systems were reviewed to ensure effective implementation by management[142] Corporate Governance - The board of directors held 5 meetings in 2023, with full attendance from key members including the Chairman and CEO[157] - The compliance committee, established in July 2022, is chaired by the audit committee chairman and includes all independent non-executive directors[153] - The company confirmed the independence of its independent non-executive directors, including Mr. Cui Yulei, Ms. Xu Huimin, and Mr. Xu Jianwen[164] - The board is responsible for corporate governance functions, including reviewing the training and professional development of directors and senior management[145] - The company's directors are required to retire and be eligible for re-election at shareholder meetings in accordance with the company's articles of association[160] Financial Performance - Revenue for the year reached 2,150.3 million HKD, a 37.1% increase compared to 2022[178] - Net profit for the year was 102.6 million HKD, a 786.0% increase compared to 2022[178] - Gross profit for the year was 65.4 million HKD, a 31.9% increase compared to 2022[178] - Gross margin for the year was 3.0%, a slight decrease from 3.2% in 2022[178] - Profit attributable to shareholders was 91.3 million HKD, a 390.9% increase compared to 2022[178] - Revenue for 2023 increased by 37.1% to HK$2,150,279 thousand compared to HK$1,568,466 thousand in 2022[192] - Net profit for 2023 surged by 786.0% to HK$102,640 thousand from HK$11,584 thousand in 2022[192] - The company's EBITDA for 2023 rose by 77.9% to HK$416,736 thousand from HK$234,287 thousand in 2022[192] - Cash and cash equivalents decreased by 27.6% to HK$401,344 thousand in 2023 from HK$554,062 thousand in 2022[192] Gas Sales and Market Trends - Gas sales volume reached 733.6 million cubic meters, a 93.5% increase compared to 2022[187] - Natural gas sales volume in 2023 reached 284.8 million cubic meters, a 111.6% increase from 134.6 million cubic meters in 2022[193] - Residential user gas sales volume increased by 6.9% to 76.1 million cubic meters in 2023 from 71.2 million cubic meters in 2022[193] - China's natural gas apparent consumption in 2023 was 394.53 billion cubic meters, a 7.6% year-on-year increase[173] Strategic Investments and Agreements - The company has no significant investment or capital asset agreements as of the report date but will consider potential opportunities in the future[146] - The company secured a 700 million HKD equivalent RMB term loan facility from its controlling shareholder, Beijing Gas Group, in December 2023[187] - The company signed a natural gas purchase agreement with Beijing Gas Group, effective from January 1, 2024, to December 31, 2026[196] - The company acquired a 49% stake in Beijing Unite Energy Engineering Technology Co., Ltd. for RMB 41,650,000, with the transaction expected to be completed by June 30, 2024[200] - The company entered into a strategic cooperation framework agreement with Beijing Guoneng Guoyuan Energy Technology Co., Ltd. in June 2023 to collaborate in new energy, asset-light business, and technology R&D[199] Business Growth and Contributions - The acquisition of Guangxi Tengxian city gas business contributed to the revenue and profit growth[178] - The company's gas trade and distribution business also contributed to the revenue growth[178]

Financial Performance - The group recorded a revenue of HKD 2,150.3 million for the full year 2023, an increase of 37.1% compared to HKD 1,568.5 million in 2022[2]. - The group's profit for the year 2023 was HKD 102.6 million, a remarkable increase of 786.0% from HKD 11.6 million in 2022, primarily due to the contribution from the Guangxi Teng County urban gas project acquisition[2]. - The EBITDA for the full year 2023 was HKD 416.7 million, representing a 77.9% increase from HKD 234.3 million in 2022[2]. - Basic and diluted earnings per share for 2023 were HKD 0.40, compared to HKD 0.14 in 2022[2]. - The total gross profit for the group was HKD 65.4 million, up 31.9% from HKD 49.6 million in 2022, with a gross profit margin of 3.0% for 2023, slightly down from 3.2% in 2022[54]. - The group's net profit attributable to shareholders was HKD 91.3 million in 2023, significantly up from HKD 18.6 million in 2022, reflecting a strong performance in city gas and LNG projects[115]. Revenue Segments - The city gas operations segment generated revenue of HKD 982,838,000 in 2023, up from HKD 551,583,000 in 2022, reflecting an increase of 78%[24]. - The natural gas trading and distribution segment reported revenue of HKD 1,106,728,000, an increase of 19% from HKD 927,354,000 in the previous year[24]. - The industrial customer direct supply segment experienced a decline in revenue to HKD 26,854,000 from HKD 45,388,000, representing a decrease of 41%[24]. - The natural gas refueling station segment's revenue decreased to HKD 33,859,000 from HKD 44,141,000, a decline of 23%[24]. - The group's city gas business recorded revenue of HKD 982.8 million for the full year 2023, a 78.1% increase from HKD 551.6 million in 2022[104]. Gas Sales Volume - The total gas sales volume for 2023 was 733.6 million cubic meters, a significant increase of 93.5% from 379.1 million cubic meters in 2022, driven by increased natural gas demand and the acquisition of the Guangxi Teng County urban gas project[2]. - The total sales volume of natural gas to residential and non-residential users reached 284.8 million cubic meters, a 111.6% increase compared to 134.6 million cubic meters in 2022[58]. - The total trade volume reached 433.2 million cubic meters in 2023, up 90.8% from 227.1 million cubic meters in 2022[105]. Assets and Liabilities - Non-current assets totaled HKD 3,823.8 million as of December 31, 2023, slightly down from HKD 3,856.0 million in 2022[5]. - Current assets decreased to HKD 1,262.9 million in 2023 from HKD 1,364.7 million in 2022[5]. - The company's total assets as of December 31, 2023, were HKD 5,086,800 thousand, down from HKD 5,220,700 thousand in 2022, reflecting a decrease of 2.6%[140]. - The group has a net current liability of approximately HKD 1 billion as of December 31, 2023, but expects sufficient funds to continue operations due to past performance and financial support from its parent company[25]. - The total liabilities to total assets ratio improved slightly to 68.0% in 2023 from 68.8% in 2022[140]. Financing and Costs - The group's financing costs for 2023 totaled HKD 193.0 million, compared to HKD 133.9 million in 2022, with a decrease in bank loan interest expenses from HKD 91.8 million in 2022 to HKD 84.2 million in 2023[39]. - Financing costs increased by 44.1% to HKD 193.0 million in 2023, compared to HKD 133.9 million in 2022, primarily due to rising reference interest rates[115]. - The group has secured new financing of HKD 700 million from Beijing Gas Group, aimed at refinancing existing projects, which is expected to alleviate financial cost pressures[161]. Dividends - The board of directors did not recommend the declaration of a final dividend for the year 2023, consistent with 2022[2]. - The group did not recommend the payment of dividends for the years ended December 31, 2023, and 2022[44]. Strategic Initiatives - The group has actively participated in energy transition and is accelerating the layout of new energy businesses in response to national policies promoting natural gas energy development[52]. - The company aims to optimize its urban gas asset portfolio to maximize profits while ensuring sustainable development and greater returns for shareholders[83]. - The strategic cooperation agreement with Beijing Guoneng Guoyuan Energy Technology Co., Ltd. aims to explore collaboration in new energy and technology research and development[108]. - The group plans to enhance its comprehensive energy business, focusing on renewable energy and clean energy development, supported by its major shareholder[109]. Market Outlook - The group anticipates continued economic recovery in China, with a focus on high-quality development and energy transition in 2024[110]. - The group aims to diversify investments beyond traditional natural gas projects, aligning with national carbon neutrality goals and enhancing core competitiveness in the energy sector[111].

智通财经APP讯，北京燃气蓝天(06828)公布，于2023年12月22日，该公司(作为借款人)已就总额最高离岸人民币2亿元或等额港元的非承诺性循环贷款融资接纳一家银行发出的融资函件，自提款日期起计十二个月内可供提取。 ...

Financial Performance - Revenue for the six months ended June 30, 2023, was HKD 1,191,450,000, representing a 29.6% increase from HKD 919,261,000 in the same period of 2022[21] - Gross profit for the same period was HKD 44,604,000, up from HKD 40,639,000, indicating a growth of 9.7%[21] - The net profit for the period was HKD 43,084,000, compared to HKD 18,308,000 in the previous year, reflecting a significant increase of 135.5%[21] - The basic and diluted earnings per share for the period were HKD 0.14, down from HKD 0.15 in the previous year[21] - The group's profit before tax for the six months ended June 30, 2023, was HKD 32,272,000, compared to HKD 19,968,000 for the same period in 2022, representing a significant increase[70] - The group reported a net other income and gains of HKD 8,189,000 for the six months ended June 30, 2023, down from HKD 17,623,000 in the same period last year[91] - Net profit for the first half of 2023 was HKD 43.1 million, representing a 135.3% increase from HKD 18.3 million in the same period of 2022[104] Expenses and Liabilities - The company reported a decrease in administrative expenses to HKD 71,929,000 from HKD 96,128,000, a reduction of 25.1%[21] - As of June 30, 2023, total current liabilities amounted to HKD 1,165,478,000, an increase from HKD 1,102,845,000 as of December 31, 2022, representing a growth of approximately 5.7%[23] - Non-current liabilities decreased slightly to HKD 1,111,456,000 from HKD 1,123,981,000, reflecting a reduction of approximately 1.1%[23] - The total equity attributable to shareholders was HKD 1,286,531,000, a decrease from HKD 1,356,654,000, representing a drop of approximately 5.2%[23] - The company’s total liabilities as of June 30, 2023, were HKD 2,332,421,000, compared to HKD 2,467,556,000 as of December 31, 2022, showing a reduction of about 5.5%[23] Cash Flow and Assets - Cash and cash equivalents decreased to HKD 354,982,000 from HKD 554,062,000, a decline of 36%[12] - The company reported cash flow data for the six months ended June 30, 2023, but specific figures were not detailed in the provided documents[28] - The net cash flow from operating activities was HKD 81,036 thousand, a significant improvement from a cash outflow of HKD 40,979 thousand in the previous year[49] - The group’s investment activities generated a net cash flow of HKD 10,243 thousand, a decrease from HKD 299,458 thousand in the previous year, indicating a shift in investment strategy[49] - The total assets as of June 30, 2023, were HKD 5,010.0 million, down from HKD 5,220.7 million as of December 31, 2022[124] Market and Business Strategy - The company plans to continue expanding its market presence and developing new projects in the natural gas sector, leveraging its resources and capital advantages[9] - The company aims to enhance its operational efficiency and reduce costs further in the upcoming periods[9] - The company aims to capitalize on market opportunities under the dual carbon goals and accelerate the development of renewable and clean energy[128] - The company anticipates a recovery in natural gas demand in China for 2023, driven by urbanization and green transformation initiatives, which will release significant market potential[136] - The natural gas business experiences seasonal fluctuations, with higher demand typically observed in the second half of the year due to winter heating needs[57] Financing and Investments - The company secured a syndicated loan of HKD 1,013 million in January 2023, which is to be repaid within one year[32] - The group issued convertible bonds totaling HKD 300 million, maturing on December 28, 2025[167] - The group has pledged certain properties, plants, and equipment, as well as investment properties and bank balances as collateral[174] - The group plans to utilize more RMB-denominated borrowings to mitigate financial costs and currency risk due to the high interest rates on HKD loans[171] Shareholder and Governance - The company has complied with the corporate governance code as per the listing rules throughout the first half of 2023[184] - The company’s major shareholder, Beijing Gas Group, is required to maintain at least 66% of the issued shares of the company under the financing terms[188] - Beijing Gas Group indirectly owns approximately 41.13% of the company’s issued share capital[189] - The board does not recommend the declaration of an interim dividend for the first half of 2023[158] Operational Highlights - The total revenue for the city gas operation segment reached HKD 517,213 thousand, an increase of 55.8% compared to HKD 332,044 thousand in the same period last year[65] - The number of natural gas sales volume reached 123.2 million cubic meters, a 72.5% increase from 71.4 million cubic meters in the first half of 2022[108] - The total trade volume for the group was 198.9 million cubic meters, up 97.9% from 100.5 million cubic meters in the first half of 2022[110] - The group recorded a substantial increase in gas sales volume in the urban gas business, rising by 72.5% compared to the same period last year[84] - The company reported a total LNG unloading volume of 3,096.0 million cubic meters in the first half of 2023, a 3.5% increase from 2,992.1 million cubic meters in the same period of 2022[134]

[Summary Highlights](index=1&type=section&id=Summary%20Highlights) The group achieved significant revenue and profit growth in H1 2023, driven by increased gas sales and strategic acquisitions, despite a decline in gross profit margin Key Financial Highlights | Indicator | H1 2023 (HK$ thousand) | H1 2022 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,191.5 | 919.3 | 29.6 | | Gross profit | 44.6 | 40.6 | 9.8 | | Gross profit margin | 3.7% | 4.4% | (15.9) | | Profit for the period | 43.1 | 18.3 | 135.3 | | Profit attributable to owners of the Company | 32.3 | 20.0 | 61.6 | | Basic earnings per share (HK cents) | 0.14 | 0.15 | (6.7) | | Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) | 173.6 | 117.4 | 47.9 | - In H1 2023, the Group's total gas sales volume was **329.9 million cubic meters**, a significant **84.0% increase** year-on-year, primarily due to growing natural gas demand and the acquisition of the Guangxi Tengxian city gas project[97](index=97&type=chunk) - Profit attributable to owners of the Company increased by **61.6%**, mainly due to growth in principal business revenue, reduced legal and professional fees (non-recurring item), and lower administrative expenses from continuous cost reduction and efficiency improvement initiatives[97](index=97&type=chunk) - The Board does not recommend declaring an interim dividend for H1 2023[107](index=107&type=chunk) [Unaudited Interim Results](index=2&type=section&id=Unaudited%20Interim%20Results) This chapter presents the unaudited condensed consolidated interim results of Beijing Gas Blue Sky Holdings Limited and its subsidiaries for the six months ended June 30, 2023, with comparative figures for the same period in 2022 [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The Group recorded significant growth in revenue, gross profit, and profit for the period in H1 2023, driven by business expansion and cost control, despite a decline in gross profit margin Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | For the 6 months ended June 30, 2023 (HK$ thousand) | For the 6 months ended June 30, 2022 (HK$ thousand) | | :--- | :--- | :--- | | Revenue | 1,191,450 | 919,261 | | Cost of sales | (1,146,846) | (878,622) | | Gross profit | 44,604 | 40,639 | | Other income and gains, net | 8,189 | 17,623 | | Administrative expenses | (71,929) | (96,128) | | Impairment reversal on financial assets, net | 22,972 | 14,768 | | Other expenses, net | (16,356) | (41,067) | | Finance costs | (76,700) | (52,772) | | Share of profit/(loss) of a joint venture | 160 | (600) | | Share of profit of associates | 135,650 | 137,114 | | Profit before tax | 46,590 | 19,577 | | Income tax expense | (3,506) | (1,269) | | Profit for the period | 43,084 | 18,308 | | Profit attributable to owners of the Company | 32,272 | 19,968 | | Profit/(loss) attributable to non-controlling interests | 10,812 | (1,660) | | Basic and diluted earnings per share (HK cents) | 0.14 | 0.15 | - Total comprehensive loss for the period was **HK$(63,051) thousand**, a narrowing from **HK$(72,836) thousand** in H1 2022[1](index=1&type=chunk)[3](index=3&type=chunk) [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2023, the Group's total assets and equity slightly decreased, while total current liabilities remained high, leading to an increase in net current liabilities Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2023 (HK$ thousand) | December 31, 2022 (HK$ thousand) | | :--- | :--- | :--- | | **Non-current assets** | | | | Property, plant and equipment | 579,312 | 627,733 | | Investment properties | 68,302 | 73,415 | | Right-of-use assets | 777,044 | 777,044 | | Goodwill | 399,273 | 409,565 | | Operating rights | 25,601 | 24,719 | | Investments in a joint venture | 1,937,491 | 1,893,268 | | Total non-current assets | 3,843,058 | 3,856,001 | | **Current assets** | | | | Inventories | 21,790 | 20,255 | | Trade receivables | 116,532 | 111,821 | | Cash and cash equivalents | 354,982 | 554,062 | | Total current assets | 1,166,943 | 1,364,711 | | **Current liabilities** | | | | Trade and bills payables | 110,304 | 131,039 | | Bank and other borrowings | 1,575,357 | 1,700,276 | | Total current liabilities | 2,332,421 | 2,467,556 | | **Non-current liabilities** | | | | Bank and other borrowings | 750,822 | 770,512 | | Convertible bonds | 236,263 | 236,263 | | Total non-current liabilities | 1,111,456 | 1,123,981 | | **Equity** | | | | Total equity | 1,566,124 | 1,629,175 | | Net current liabilities | (1,165,478) | (1,102,845) | [Notes to the Unaudited Condensed Consolidated Interim Financial Information](index=6&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Interim%20Financial%20Information) This chapter provides detailed notes to the unaudited condensed consolidated interim financial information, covering company details, accounting policies, operating segment data, and explanations for financial statement changes [General Information](index=6&type=section&id=General%20Information) This section outlines the company's registration, listing, principal place of business, main activities, and ultimate controlling entity - The Company was incorporated in Bermuda, and its shares are listed on The Stock Exchange of Hong Kong Limited[131](index=131&type=chunk) - The Group is primarily engaged in the wholesale and distribution of compressed natural gas (CNG), liquefied natural gas (LNG), fuel oil, and other related oil by-products, pipeline distribution and sale of natural gas to residential, commercial, and industrial consumers, sale of gas-related equipment, provision of pipeline connection services, and operation of CNG and LNG vehicle refilling stations[8](index=8&type=chunk)[112](index=112&type=chunk)[132](index=132&type=chunk) - The Company's ultimate controlling entity is Beijing Enterprises Group Company Limited, a state-owned enterprise wholly owned by the Beijing Municipal People's Government State-owned Assets Supervision and Administration Commission[132](index=132&type=chunk) [Basis of Preparation](index=7&type=section&id=Basis%20of%20Preparation) This section details the basis for preparing the condensed consolidated interim financial information, including compliance with IAS 34 and Listing Rules, and preparation on a going concern basis - The unaudited condensed consolidated interim financial information has been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting issued by the International Accounting Standards Board and the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[134](index=134&type=chunk) - The financial information is prepared on a going concern basis, assuming the realization of assets and settlement of liabilities in the normal course of business[133](index=133&type=chunk) [Changes in Accounting Policies and Disclosures](index=7&type=section&id=Changes%20in%20Accounting%20Policies%20and%20Disclosures) This section details new and amended IFRSs adopted for the period, including revisions to accounting policy disclosures, definition of accounting estimates, and deferred tax, assessing their impact on the Group's financial information - The Group applied IAS 1 (Amendment) Disclosure of Accounting Policies from January 1, 2023, which is expected to affect accounting policy disclosures in the annual consolidated financial statements but has no impact on the condensed consolidated interim financial information[12](index=12&type=chunk) - IAS 8 (Amendment) Definition of Accounting Estimates clarified the distinction between changes in accounting estimates and changes in accounting policies, with no impact on the Group's financial position or performance[136](index=136&type=chunk) - IAS 12 (Amendment) Deferred Tax related to Assets and Liabilities arising from a Single Transaction narrowed the scope of the initial recognition exemption, with no significant impact on the Group's condensed consolidated interim financial information[116](index=116&type=chunk)[137](index=137&type=chunk) [Seasonality of Operations](index=8&type=section&id=Seasonality%20of%20Operations) This section highlights the seasonal fluctuations in the Group's natural gas business, with demand typically higher in the second half of the year due to winter heating needs - The Group's natural gas business experiences seasonal fluctuations, with demand generally higher in the second half of each year, primarily due to winter heating consumption[138](index=138&type=chunk) [Operating Segment Information](index=8&type=section&id=Operating%20Segment%20Information) This section categorizes the Group's business into four reportable segments: city gas operations, direct supply to industrial customers, natural gas trading and distribution, and natural gas refilling stations, based on operational nature and services provided, presenting their revenue and performance Operating Segment Revenue and Profit/(Loss) | Segment | H1 2023 Revenue (HK$ thousand) | H1 2023 Segment Profit/(Loss) (HK$ thousand) | H1 2022 Revenue (HK$ thousand) | H1 2022 Segment Profit/(Loss) (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | | City gas operations | 517,213 | 121,307 | 332,044 | 112,936 | | Direct supply to industrial customers | 16,668 | 2,624 | 17,972 | (1,372) | | Natural gas trading and distribution | 634,452 | (7,937) | 549,329 | (11,496) | | Natural gas refilling stations | 23,117 | (1,012) | 19,916 | (534) | | Total | 1,191,450 | 114,982 | 919,261 | 99,534 | | Unallocated other income and gains, net | | 8,189 | | 17,623 | | Unallocated impairment reversal on financial assets, net | | 22,972 | | 14,768 | | Unallocated corporate expenses | | (22,853) | | (59,576) | | Finance costs | | (76,700) | | (52,772) | | Profit before tax | | 46,590 | | 19,577 | - Over **90%** of the Group's revenue is derived from Mainland China, and over **90%** of its non-current assets (excluding financial assets) are located in Mainland China, thus no geographical information is presented[142](index=142&type=chunk) [Revenue](index=10&type=section&id=Revenue_Note) This section provides an analysis of the Group's revenue for the reporting period, presented by business segment Revenue by Source | Revenue Source | For the 6 months ended June 30, 2023 (HK$ thousand) | For the 6 months ended June 30, 2022 (HK$ thousand) | | :--- | :--- | :--- | | City gas operations | 517,213 | 332,044 | | Direct supply to industrial customers | 16,668 | 17,972 | | Natural gas trading and distribution | 634,452 | 549,329 | | Natural gas refilling stations | 23,117 | 19,916 | | **Total Revenue** | **1,191,450** | **919,261** | [Other Income and Gains, Net](index=10&type=section&id=Other%20Income%20and%20Gains,%20Net_Note) This section details the composition of the Group's other income and gains, and explains the reasons for their changes Other Income and Gains, Net | Item | For the 6 months ended June 30, 2023 (HK$ thousand) | For the 6 months ended June 30, 2022 (HK$ thousand) | | :--- | :--- | :--- | | Bank interest income | 1,387 | 1,281 | | Rental income | 880 | 716 | | Income from sales of gas appliances | – | 685 | | Government grants and subsidies | 563 | 1,782 | | Gain on disposal of a joint venture | – | 5,961 | | Fair value changes of financial assets at fair value through profit or loss | (23) | 679 | | Net exchange differences | (555) | (1,392) | | Others | 5,937 | 7,911 | | **Total** | **8,189** | **17,623** | - Other income and gains, net, decreased, primarily due to the recognition of a **HK$6.0 million** gain from the disposal of a joint venture in H1 2022, which was a one-off non-recurring item[67](index=67&type=chunk) [Finance Costs](index=11&type=section&id=Finance%20Costs_Note) This section analyzes the Group's finance costs for the reporting period, indicating an increase in total finance costs due to higher interest expenses on bank borrowings Finance Costs | Item | For the 6 months ended June 30, 2023 (HK$ thousand) | For the 6 months ended June 30, 2022 (HK$ thousand) | | :--- | :--- | :--- | | Interest expense on bank borrowings | 29,637 | 34,425 | | Interest expense on corporate bonds | 18,035 | 13,250 | | Interest expense on loan from direct holding company | 17,379 | – | | Interest expense on convertible bonds | 8,450 | – | | Interest expense on other borrowings | 2,970 | 4,620 | | Interest expense on lease liabilities | 229 | 477 | | **Total** | **76,700** | **52,772** | - Finance costs increased by **45.3%** from **HK$52.8 million** in H1 2022 to **HK$76.7 million** in H1 2023, primarily due to higher interest expenses on bank and other borrowings resulting from an increase in HIBOR[165](index=165&type=chunk) [Profit Before Tax](index=11&type=section&id=Profit%20Before%20Tax_Note) This section lists the major expenses and income deducted or included in the calculation of profit before tax, including cost of inventories sold, depreciation, amortization, and employee benefit expenses Items Deducted/Included in Profit Before Tax | Item | For the 6 months ended June 30, 2023 (HK$ thousand) | For the 6 months ended June 30, 2022 (HK$ thousand) | | :--- | :--- | :--- | | Cost of inventories sold | 1,127,376 | 851,977 | | Depreciation of property, plant and equipment | 34,412 | 32,427 | | Depreciation of investment properties | 1,848 | 1,102 | | Depreciation of right-of-use assets | 3,766 | 7,512 | | Amortisation of operating rights | 10,292 | 4,020 | | Employee benefit expenses (including Directors' emoluments) | 42,471 | 51,152 | | Impairment reversal on financial assets, net | (22,972) | (14,768) | [Income Tax](index=12&type=section&id=Income%20Tax_Note) This section explains the Group's income tax expense for the reporting period, primarily from Mainland China subsidiaries, with no taxable profit generated in Hong Kong Income Tax Expense | Item | For the 6 months ended June 30, 2023 (HK$ thousand) | For the 6 months ended June 30, 2022 (HK$ thousand) | | :--- | :--- | :--- | | Current - Mainland China | 6,243 | 1,827 | | Deferred | (2,737) | (558) | | **Total tax expense for the period** | **3,506** | **1,269** | - The Group did not generate any taxable profit in Hong Kong for the six months ended June 30, 2023, and therefore no provision for Hong Kong profits tax was made for the period[147](index=147&type=chunk) [Dividends](index=12&type=section&id=Dividends_Note) This section explicitly states that the Board does not recommend declaring an interim dividend for the six months ended June 30, 2023 - The Board does not recommend declaring an interim dividend for the six months ended June 30, 2023 (H1 2022: nil)[35](index=35&type=chunk) [Earnings Per Share](index=12&type=section&id=Earnings%20Per%20Share_Note) This section provides the calculation and results for basic and diluted earnings per share, explaining the anti-dilutive effect of convertible bonds Basic and Diluted Earnings Per Share | Indicator | H1 2023 (HK cents) | H1 2022 (HK cents) | | :--- | :--- | :--- | | Basic and diluted earnings per share | 0.14 | 0.15 | - Basic earnings per share is calculated based on the profit attributable to owners of the Company of **HK$32,272,000** (H1 2022: **HK$19,968,000**) and the weighted average number of ordinary shares outstanding during the period of **22,736,114,715** (H1 2022: **12,986,114,715**)[148](index=148&type=chunk) - For the period ended June 30, 2023, the convertible bonds had an anti-dilutive effect on the presented basic earnings per share, thus no adjustment was made[178](index=178&type=chunk) [Trade and Other Receivables](index=12&type=section&id=Trade%20and%20Other%20Receivables_Note) This section provides an aging analysis of trade receivables and notes that their balance remained largely consistent with December 31, 2022 Aging Analysis of Trade Receivables | Aging | June 30, 2023 (HK$ thousand) | December 31, 2022 (HK$ thousand) | | :--- | :--- | :--- | | Unbilled portion and billed within 3 months | 69,354 | 70,894 | | Billed: 4 to 6 months | 7,072 | 8,898 | | Billed: 7 to 12 months | 10,350 | 3,958 | | Billed: Over 1 year | 29,756 | 28,071 | | **Total Trade Receivables** | **116,532** | **111,821** | - The balance of trade receivables remained largely consistent with the balance as of December 31, 2022[168](index=168&type=chunk) [Trade and Bills Payables](index=13&type=section&id=Trade%20and%20Other%20Payables_Note) This section provides an aging analysis of trade and bills payables and explains the main reasons for changes in their balances Aging Analysis of Trade and Bills Payables | Aging | June 30, 2023 (HK$ thousand) | December 31, 2022 (HK$ thousand) | | :--- | :--- | :--- | | Billed: Within 3 months | 48,652 | 24,780 | | Billed: 4 to 6 months | 10,913 | 19,362 | | Billed: 7 to 12 months | 11,884 | 9,553 | | Billed: Over 1 year | 32,470 | 53,748 | | Unbilled | 6,385 | 23,596 | | **Total Trade and Bills Payables** | **110,304** | **131,039** | - The balance of trade and bills payables decreased by **HK$20.7 million**, primarily due to the Group's payment of certain project costs during the period[73](index=73&type=chunk) [Comparative Amounts](index=13&type=section&id=Comparative%20Amounts) This section states that certain comparative amounts have been reclassified and restated to conform to the current period's presentation - Certain comparative amounts have been reclassified and restated to conform to the current period's presentation[152](index=152&type=chunk) [Management Discussion and Analysis](index=14&type=section&id=Management%20Discussion%20and%20Analysis) This chapter comprehensively discusses the Group's operating results, financial position, industry overview, business review, future outlook, capital structure, and financial resource management for the reporting period, aiming to provide in-depth insights for investors [Industry Overview](index=14&type=section&id=Industry%20Overview) This section outlines China's stabilizing economic recovery, challenges from complex international geopolitics, financial market volatility, and energy sector issues, while emphasizing national policy guidance on clean energy development - China's economy shows signs of stabilization and recovery, but complex international geopolitical situations, financial market volatility, and slow post-pandemic economic recovery pose challenges to the energy sector[153](index=153&type=chunk) - The National Energy Administration issued the 'Guiding Opinions on Energy Work in 2023,' aiming to increase the proportion of non-fossil energy in total energy consumption to approximately **18.3%**, and wind and solar power generation to **15.3%** of total electricity consumption[38](index=38&type=chunk) [Business Review](index=14&type=section&id=Business%20Review) This section reviews the operational performance of the Group's various business segments, highlighting the significant increase in total gas sales volume, primarily driven by recovering natural gas demand and the acquisition of the Guangxi Tengxian city gas project [Development and Operation of City Gas Business](index=16&type=section&id=Development%20and%20Operation%20of%20City%20Gas%20Business) The city gas business recorded significant growth in H1 2023, with substantial increases in gas sales volume and revenue, primarily due to the acquisition of the Guangxi Tengxian city gas project, particularly for industrial users City Gas Business Performance | Indicator | H1 2023 | H1 2022 | Change % | | :--- | :--- | :--- | :--- | | Natural gas sales volume (million cubic meters) | 123.2 | 71.4 | 72.5 | | －Residential users | 42.7 | 40.5 | 5.4 | | －Non-residential users | 80.5 | 30.9 | 160.5 | | City gas business sales revenue (HK$ thousand) | 517.2 | 332.0 | 55.8 | | Natural gas sales and other services revenue (HK$ thousand) | 465.7 | 284.0 | 64.0 | | Connection revenue (HK$ thousand) | 51.5 | 48.0 | 7.3 | - Following the capital increase and asset injection completed at the end of 2022, the Group strengthened its high-quality asset portfolio in the city gas business and further expanded its city gas business footprint with the development of the city gas operator in Tengxian, Guangxi Zhuang Autonomous Region[26](index=26&type=chunk) - During the period, the Group added **13,442** new gas pipeline connection users, bringing the cumulative user count to **517,441**, including **13,403** new residential users and **39** new non-residential users[41](index=41&type=chunk) [LNG and CNG Trading and Distribution Business](index=17&type=section&id=LNG%20and%20CNG%20Trading%20and%20Distribution%20Business) The Group's LNG and CNG trading and distribution business recorded significant growth in total trading volume and sales in H1 2023, primarily due to increased natural gas demand and optimized gas source procurement strategies LNG and CNG Trading and Distribution Performance | Indicator | H1 2023 | H1 2022 | Change % | | :--- | :--- | :--- | :--- | | Total trading volume (million cubic meters) | 198.9 | 100.5 | 97.9 | | Trading and distribution business sales (HK$ thousand) | 634.5 | 549.3 | - | - The Group adjusted its gas source procurement strategy in response to supply and demand, continuously optimizing its gas source structure and deepening cooperation with upstream suppliers, including entering into a master agreement for the purchase of LNG with its controlling shareholder, Beijing Gas Group[27](index=27&type=chunk) [LNG Receiving Terminal Project](index=18&type=section&id=LNG%20Receiving%20Terminal%20Project) The PetroChina Jingtang LNG Receiving Terminal Project, in which the Group holds an interest, saw an increase in total LNG offloading volume in H1 2023, mainly due to market recovery and increased demand post-pandemic LNG Receiving Terminal Offloading Volume | Indicator | H1 2023 (million cubic meters) | H1 2022 (million cubic meters) | Change % | | :--- | :--- | :--- | :--- | | Total LNG offloading volume | 3,096.0 | 2,992.1 | 3.5 | - PetroChina Jingtang's LNG receiving terminal is a major winter peak-shaving and supply guarantee station in the Beijing-Tianjin-Hebei region, and is China's largest LNG receiving terminal in terms of storage and peak-shaving capacity[188](index=188&type=chunk) [Other Businesses](index=18&type=section&id=Other%20Businesses) Revenue from direct supply to industrial customers decreased, while gas sales volume and revenue from LNG and CNG refilling stations increased Other Business Revenue and Sales Volume | Business | H1 2023 Revenue (HK$ thousand) | H1 2022 Revenue (HK$ thousand) | Change % | | :--- | :--- | :--- | :--- | | Direct supply to industrial customers | 16.7 | 18.0 | (7.2) | | LNG and CNG refilling station business | 23.1 | 19.9 | 16.1 | | LNG and CNG refilling station sales volume (million cubic meters) | 4.6 | 3.9 | - | [Future Outlook](index=18&type=section&id=Future%20Outlook) The Group anticipates a recovery in China's natural gas demand and will actively seize market opportunities under dual carbon goals, accelerating the development of renewable and clean energy to build a new energy business system - The Group will continue to implement national strategies for actively addressing climate change, accelerate the green transformation of its development model, and actively seek market opportunities through organic growth, acquisitions, and other means to accelerate the development of new energy businesses[160](index=160&type=chunk)[189](index=189&type=chunk) - The Group has announced a potential acquisition of certain equity interests in an energy sector company and entered into a strategic cooperation framework agreement with Beijing Guoneng Guoyuan Energy Technology Co., Ltd., demonstrating its efforts to seek opportunities in the clean energy market[189](index=189&type=chunk) - China's natural gas demand is expected to show recovery growth in 2023, and the Group will deepen clean energy cooperation with relevant institutions or enterprises to promote the establishment of clean energy partnerships[190](index=190&type=chunk) [Financial Review](index=19&type=section&id=Financial%20Review_MD%26A) This section provides a detailed analysis of the Group's financial performance for the reporting period, including changes in revenue, gross profit, various expenses, profit, and major items of the condensed consolidated statement of financial position, along with their underlying reasons [Revenue](index=19&type=section&id=Revenue_MD%26A) Revenue significantly increased, primarily attributed to higher income from natural gas trading and distribution business, and contributions from the acquisition of the Guangxi Tengxian city gas project Revenue Performance | Indicator | H1 2023 (HK$ thousand) | H1 2022 (HK$ thousand) | Change % | | :--- | :--- | :--- | :--- | | Revenue | 1,191.5 | 919.3 | 29.6 | - The increase in revenue was primarily attributable to higher income from the natural gas trading and distribution business, and contributions from the acquisition of the Guangxi Tengxian city gas project completed at the end of 2022[45](index=45&type=chunk) [Gross Profit and Gross Margin](index=19&type=section&id=Gross%20Profit%20and%20Gross%20Margin_MD%26A) Gross profit increased, but the gross profit margin decreased, mainly due to rising cost of sales from continuous adjustments in upstream prices Gross Profit and Gross Margin Performance | Indicator | H1 2023 (HK$ thousand) | H1 2022 (HK$ thousand) | Change % | | :--- | :--- | :--- | :--- | | Gross profit | 44.6 | 40.6 | 9.8 | | Gross profit margin (%) | 3.7% | 4.4% | (15.9) | - The decline in gross profit margin was mainly due to rising cost of sales resulting from continuous adjustments in upstream prices[31](index=31&type=chunk) [Other Income and Gains, Net](index=19&type=section&id=Other%20Income%20and%20Gains,%20Net_MD%26A) Other income and gains, net, decreased, primarily due to the recognition of a one-off gain from the disposal of a joint venture in H1 2022 Other Income and Gains, Net | Indicator | H1 2023 (HK$ thousand) | H1 2022 (HK$ thousand) | | :--- | :--- | :--- | | Other income and gains, net | 8.2 | 17.6 | - The decrease was due to the recognition of a **HK$6.0 million** gain from the disposal of a joint venture in H1 2022, which was a one-off item[67](index=67&type=chunk) [Impairment Reversal on Financial Assets, Net](index=19&type=section&id=Impairment%20Reversal%20on%20Financial%20Assets,%20Net_MD%26A) Net impairment reversal on financial assets increased compared to the same period last year Impairment Reversal on Financial Assets, Net | Indicator | H1 2023 (HK$ thousand) | H1 2022 (HK$ thousand) | | :--- | :--- | :--- | | Impairment reversal on financial assets, net | 23.0 | 14.8 | - Impairment reversal on financial assets increased by **HK$8.2 million** compared to H1 2022[68](index=68&type=chunk) [Administrative Expenses](index=19&type=section&id=Administrative%20Expenses_MD%26A) Administrative expenses decreased, primarily due to cost reduction and efficiency improvement initiatives, leading to lower daily operating costs such as staff costs Administrative Expenses Performance | Indicator | H1 2023 (HK$ thousand) | H1 2022 (HK$ thousand) | Change % | | :--- | :--- | :--- | :--- | | Administrative expenses | 71.9 | 96.1 | (25.2) | - The decrease in administrative expenses was mainly due to the implementation of cost reduction and efficiency improvement measures and further enhancement of the Group's operational efficiency, leading to lower daily operating costs (e.g., staff costs)[47](index=47&type=chunk) [Other Expenses, Net](index=20&type=section&id=Other%20Expenses,%20Net_MD%26A) Other expenses, net, significantly decreased, primarily due to the recognition of non-recurring legal and professional fees related to the company's share resumption in the prior year Other Expenses, Net | Indicator | H1 2023 (HK$ thousand) | H1 2022 (HK$ thousand) | | :--- | :--- | :--- | | Other expenses, net | 16.4 | 41.1 | - The decrease in other expenses was mainly due to lower recognition of legal and professional fees in the current period compared to the prior year, where professional fees related to the Company's share resumption were recognized in H1 2022 as a non-recurring item[194](index=194&type=chunk) [Finance Costs](index=20&type=section&id=Finance%20Costs_MD%26A) Finance costs increased, primarily due to higher HIBOR for certain bank and other borrowings in H1 2023 compared to H1 2022 Finance Costs Performance | Indicator | H1 2023 (HK$ thousand) | H1 2022 (HK$ thousand) | Change % | | :--- | :--- | :--- | :--- | | Finance costs | 76.7 | 52.8 | 45.3 | - The increase in finance costs was mainly due to higher HIBOR for certain bank and other borrowings of the Group in H1 2023 compared to H1 2022[165](index=165&type=chunk) [Income Tax](index=20&type=section&id=Income%20Tax_MD%26A) Income tax expense increased, primarily from current tax generated by Mainland China subsidiaries Income Tax Expense | Indicator | H1 2023 (HK$ thousand) | H1 2022 (HK$ thousand) | | :--- | :--- | :--- | | Income tax expense | 3.5 | 1.3 | - Income tax expense primarily refers to current tax of **HK$6.2 million** generated by its Mainland China subsidiaries[195](index=195&type=chunk) [Profit Attributable to Owners of the Company](index=20&type=section&id=Profit%20Attributable%20to%20Owners%20of%20the%20Company_MD%26A) Profit attributable to owners of the Company for the period significantly increased, primarily benefiting from growth in principal business revenue, reduced legal and professional fees, and lower administrative expenses Profit Attributable to Owners of the Company | Indicator | H1 2023 (HK$ thousand) | H1 2022 (HK$ thousand) | | :--- | :--- | :--- | | Profit attributable to owners of the Company for the period | 32.3 | 20.0 | - Profit increased by **HK$12.3 million**, mainly due to growth in principal business revenue, reduced legal and professional fees (non-recurring item), and lower administrative expenses[154](index=154&type=chunk)[166](index=166&type=chunk) [Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA)](index=19&type=section&id=Earnings%20Before%20Interest,%20Tax,%20Depreciation%20and%20Amortisation%20%28EBITDA%29) EBITDA significantly increased, primarily due to market recovery after the gradual subsidence of the global COVID-19 pandemic and continuous stringent cost control EBITDA Performance | Indicator | H1 2023 (HK$ thousand) | H1 2022 (HK$ thousand) | Change % | | :--- | :--- | :--- | :--- | | EBITDA | 173.6 | 117.4 | 47.9 | - The increase in EBITDA was mainly due to the gradual subsidence of the global COVID-19 pandemic and continuous stringent cost control in H1 2023[46](index=46&type=chunk) [Changes in Major Items of Condensed Consolidated Statement of Financial Position](index=20&type=section&id=Changes%20in%20Major%20Items%20of%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This section analyzes changes in major asset and liability items in the condensed consolidated statement of financial position, including non-current assets, current assets, current liabilities, and non-current liabilities [Non-current Assets](index=20&type=section&id=Non-current%20Assets) The balance of property, plant and equipment decreased, mainly affected by depreciation provisions and the depreciation of RMB against HKD; investments in associates increased, primarily due to share of profit and exchange rate fluctuations - The balance of property, plant and equipment decreased by **HK$48.4 million** compared to the end of 2022, mainly due to depreciation provisions and exchange rate fluctuations from the depreciation of RMB against HKD[71](index=71&type=chunk) - The net value of investments in associates increased compared to December 31, 2022, primarily due to the share of profit generated by associates during the period and the net impact of exchange rate fluctuations from the depreciation of RMB against HKD[197](index=197&type=chunk) - Goodwill arose from the acquisition of subsidiaries since 2015[167](index=167&type=chunk) [Current Assets](index=21&type=section&id=Current%20Assets) Cash and cash equivalents decreased, mainly due to repayment of bank and other borrowings; trade receivables remained largely stable - Cash and cash equivalents balance was **HK$355.0 million**, a decrease of **HK$199.1 million** from December 31, 2022, mainly due to the Group's repayment of bank and other borrowings during the period[198](index=198&type=chunk) - The balance of trade receivables remained largely consistent with the balance as of December 31, 2022[168](index=168&type=chunk) - The balance of prepayments, deposits, and other receivables remained largely consistent with the balance as of December 31, 2022[51](index=51&type=chunk) [Current Liabilities](index=21&type=section&id=Current%20Liabilities) Trade and bills payables decreased, mainly due to payment of project costs; other payables and accrued expenses increased, primarily due to higher advance receipts - The balance of trade and bills payables decreased by **HK$20.7 million**, primarily due to the Group's payment of certain project costs during the period[73](index=73&type=chunk) - The balance of other payables and accrued expenses increased compared to December 31, 2022, mainly due to an increase in the Group's advance receipts during the period[170](index=170&type=chunk) [Non-current Liabilities](index=21&type=section&id=Non-current%20Liabilities) The balance of bank and other borrowings remained largely consistent with December 31, 2022, primarily including a shareholder loan from Beijing Gas Group; convertible bonds also remained unchanged - Bank and other borrowings primarily refer to a **HK$700 million** shareholder loan from Beijing Gas Group to the Company, maturing on December 31, 2025, with its balance remaining largely consistent with December 31, 2022[169](index=169&type=chunk) - Convertible bonds refer to the **HK$300 million** principal amount of convertible bonds issued by the Company to Beijing Gas Group, maturing on December 28, 2025[52](index=52&type=chunk) [Capital Structure and Financial Resources](index=21&type=section&id=Capital%20Structure%20and%20Financial%20Resources) This section details the Group's funding sources, liquidity position, and strategies to reduce financial costs and exchange rate risks, including replacing HKD and USD borrowings with RMB borrowings - The Group finances its operations through shareholders' equity, bank and other borrowings, and convertible bonds[74](index=74&type=chunk) Capital Structure and Financial Resources | Indicator | June 30, 2023 (HK$ thousand) | December 31, 2022 (HK$ thousand) | Change % | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | 354,982 | 554,062 | (35.9) | | Total assets | 5,010,001 | 5,220,712 | (4.0) | | Total equity | 1,566,124 | 1,629,175 | (3.9) | | Net current liabilities | 1,165.5 | 1,102.8 | - | | Current ratio | 0.50 | 0.55 | - | | Debt-to-asset ratio | 68.7% | 68.8% | - | | Total borrowings | 2,562.4 | 2,707.1 | - | | Gearing ratio | 51.1% | 51.9% | - | | Net debt-to-equity ratio | 141.0% | 132.2% | - | - Starting from H1 2023, the Group began replacing HKD and USD bank and other borrowings with RMB bank borrowings to mitigate rising financial costs and reduce exchange rate fluctuation risks[55](index=55&type=chunk) [Use of Proceeds from Capital Increase and Asset Injection Plan](index=22&type=section&id=Use%20of%20Proceeds%20from%20Capital%20Increase%20and%20Asset%20Injection%20Plan) This section details the use of proceeds from the capital increase and asset injection plan, showing that most funds were used for loan repayment and general working capital, with the remainder allocated for business development Use of Proceeds from Capital Increase and Asset Injection Plan | Purpose | Designated Net Amount in Circular (HK$ million) | Amount Utilized up to Dec 31, 2022 (HK$ million) | Amount Utilized in H1 2023 (HK$ million) | Unutilized Amount as of June 30, 2023 (HK$ million) | % Utilized as of June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | :--- | | Repayment of existing bank borrowings | 1,013.0 | 1,013.0 | – | – | 100% | | Repayment of outstanding corporate bonds and related interest, and other Group borrowings | 337.0 | 87.2 | 249.8 | – | 100% | | Business development | 94.5 | – | – | 94.5 | 0% | | General working capital | 50.0 | – | 50.0 | – | 100% | | **Total** | **1,494.5** | **1,100.2** | **299.8** | **94.5** | **93.7%** | - As of June 30, 2023, **HK$94.5 million** of the net proceeds from the capital increase and asset injection plan remained unutilized and is expected to be utilized within 2023[56](index=56&type=chunk) [Employees Information](index=23&type=section&id=Employees%20Information) This section provides information on the Group's employee headcount, principles for determining remuneration, and other benefits offered Employee Headcount | Indicator | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Total employees | 730 | 644 | - Employee remuneration is determined with reference to market conditions and individual performance, subject to periodic review. The Group also provides other employee benefits (including medical insurance) and grants discretionary incentive bonuses to eligible employees based on their performance and contributions to the Group[57](index=57&type=chunk) [Pledge of Assets of the Group](index=23&type=section&id=Pledge%20of%20Assets%20of%20the%20Group) This section lists the Group's assets pledged as collateral for bank and other borrowings, including property, plant and equipment, investment properties, equity interests in subsidiaries, collection rights of receivables, and bank balances - As of June 30, 2023, the Group's assets pledged as collateral for bank and other borrowings were as follows: * Pledge of certain of the Group's property, plant and equipment * Pledge of the Group's equity interest in a subsidiary * Pledge of the Group's investment properties * Pledge of collection rights of receivables arising from natural gas sales by a subsidiary * Pledge of certain of the Group's bank balances[58](index=58&type=chunk)[80](index=80&type=chunk)[204](index=204&type=chunk) - Save as disclosed, as of June 30, 2023, the Group had not made any other pledges on its assets[96](index=96&type=chunk) [Tax Relief](index=23&type=section&id=Tax%20Relief) This section states that the Company is unaware of any tax relief or exemption available to shareholders by virtue of holding the Company's securities - The Company is not aware of any tax relief or exemption available to shareholders by virtue of holding the Company's securities[79](index=79&type=chunk) [Exchange Rate Fluctuation Risk](index=23&type=section&id=Exchange%20Rate%20Fluctuation%20Risk) This section discusses the exchange rate fluctuation risk faced by the Group, particularly between RMB and HKD, and outlines its mitigation strategies - The Group's principal debts and borrowings and reporting currency are denominated in HKD, while revenue is primarily denominated in RMB, exposing it to the risk of foreign exchange gains/losses arising from the settlement of debts and borrowings[58](index=58&type=chunk) - The Group will consider utilizing more RMB-denominated borrowings in the future and will continue to closely monitor RMB currency fluctuations, taking appropriate measures to mitigate currency risk[58](index=58&type=chunk) - In H1 2023, the Group did not enter into any financial instruments for hedging purposes or other hedging instruments to hedge exchange rate risk[202](index=202&type=chunk) [Contingent Liabilities](index=23&type=section&id=Contingent%20Liabilities) This section states that as of June 30, 2023, the Group had no significant contingent liabilities - As of June 30, 2023, the Group had no significant contingent liabilities[59](index=59&type=chunk) [Events After Reporting Period](index=23&type=section&id=Events%20After%20Reporting%20Period) This section confirms that no significant events affecting the Company occurred after June 30, 2023, and up to the announcement date - No significant events affecting the Company occurred after June 30, 2023, and up to the date of this announcement[60](index=60&type=chunk) [Other Information](index=24&type=section&id=Other%20Information) This chapter covers other important information, including the Group's dividend policy, significant acquisitions and disposals, material investment plans, continuing connected transactions, audit committee review, trading of listed securities, corporate governance, and board members [Dividends](index=24&type=section&id=Dividends_Other) The Board does not recommend declaring an interim dividend for H1 2023 - The Board does not recommend declaring an interim dividend for H1 2023[82](index=82&type=chunk) [Significant Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures](index=24&type=section&id=Significant%20Acquisitions%20and%20Disposals%20of%20Subsidiaries,%20Associates%20and%20Joint%20Ventures) Except as disclosed in this announcement, the Group had no significant acquisitions or disposals of subsidiaries, associates, and joint ventures for the six months ended June 30, 2023 - Save as disclosed in this announcement, for the six months ended June 30, 2023, the Group had no significant acquisitions or disposals of subsidiaries, associates, and joint ventures[83](index=83&type=chunk) [Material Investments and Future Plans for Material Investments or Capital Assets](index=24&type=section&id=Material%20Investments%20and%20Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) Except as disclosed in this announcement, as of the announcement date, the Group had no material investments or any plans for material investments or additions to capital assets approved by the Board - Save as disclosed in this announcement, as of the date of this announcement, the Group had no material investments or any plans for material investments or additions to capital assets approved by the Board[84](index=84&type=chunk) [Continuing Connected Transactions](index=24&type=section&id=Continuing%20Connected%20Transactions) The Company entered into a master agreement with Beijing Gas Group for the sale of LNG to the Company, which was approved by independent shareholders - The Company entered into a master agreement with Beijing Gas Group, whereby Beijing Gas Group agreed to sell LNG to the Company for the period from February 25, 2021, to December 31, 2023[85](index=85&type=chunk) - The entering into of the master agreement was approved by independent shareholders at the extraordinary general meeting held on May 5, 2021[61](index=61&type=chunk) [Review by Audit Committee](index=24&type=section&id=Review%20by%20Audit%20Committee) The Audit Committee reviewed the Group's accounting principles and standards, discussed and reviewed risk management, internal control, and reporting matters, as well as the Company's condensed consolidated financial statements and unaudited interim results for the six months ended June 30, 2023 - The Audit Committee has reviewed the accounting principles and standards adopted by the Group, and has discussed and reviewed risk management, internal control, and reporting matters[92](index=92&type=chunk) - The Audit Committee has also reviewed the Company's condensed consolidated financial statements and unaudited consolidated interim results for the six months ended June 30, 2023, with management[92](index=92&type=chunk) [Purchase, Sale or Redemption of the Company’s Listed Securities](index=24&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company%E2%80%99s%20Listed%20Securities) During H1 2023, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - During H1 2023, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[63](index=63&type=chunk) [Corporate Governance](index=25&type=section&id=Corporate%20Governance) The Company adopted and complied with the code provisions of the Corporate Governance Code set out in Appendix 14 to the Listing Rules throughout H1 2023 - The Company adopted and complied with the code provisions of the Corporate Governance Code set out in Appendix 14 to the Listing Rules throughout H1 2023[64](index=64&type=chunk) [Compliance with the Model Code](index=25&type=section&id=Compliance%20with%20the%20Model%20Code) The Board confirms that all Directors complied with the Model Code for Securities Transactions by Directors of Listed Issuers throughout the period ended June 30, 2023 - The Board, having made specific enquiries of all Directors, confirmed that all Directors complied with the Model Code for Securities Transactions by Directors of Listed Issuers throughout the period ended June 30, 2023[89](index=89&type=chunk) [Publication of Results Announcement and Interim Report](index=25&type=section&id=Publication%20of%20Results%20Announcement%20and%20Interim%20Report) This interim results announcement is published on the HKEXnews website and the Company's website, and the interim report will be dispatched to shareholders and uploaded to the aforementioned websites in due course - This interim results announcement is published on the HKEXnews website (www.hkexnews.hk) and the Company's website (www.bgbluesky.com)[95](index=95&type=chunk) - The Company's interim report for H1 2023, containing all information required by the Listing Rules, will be dispatched to shareholders and uploaded to the aforementioned websites for review in due course[95](index=95&type=chunk) [Board of Directors](index=25&type=section&id=Board%20of%20Directors) This section lists the composition of the Board of Directors as of the announcement date, including executive, non-executive, and independent non-executive directors - As of the date of this announcement, the executive Directors are Mr. Li Weiqi, Mr. Wu Haipeng, Mr. Chen Ning, and Mr. Yang Shuoxuan; the non-executive Directors are Mr. Zhi Xiaoye and Mr. Shao Dan; and the independent non-executive Directors are Mr. Cui Yulei, Ms. Xu Huimin, and Mr. Xu Jianwen[95](index=95&type=chunk) [Date of Announcement](index=25&type=section&id=Date%20of%20Announcement) This section specifies the date of issuance for this announcement - Hong Kong, August 30, 2023[66](index=66&type=chunk)