CHINA GAS HOLD(00384)2023-12-19 08:30Revenue and Profit Performance - Revenue for the six months ended 30 September 2023 was HK$36,049.15 million, a decrease of 16.1% compared to HK$42,976.49 million in the same period last year[6] - Gross profit for the period was HK$5,723.57 million, down 17.9% from HK$6,971.86 million in the previous year[6] - Profit before taxation decreased by 42.5% to HK$2,519.23 million from HK$4,384.06 million in the prior year[6] - Profit for the period attributable to owners of the company was HK$1,830.41 million, a decline of 43.8% compared to HK$3,260.04 million in the previous year[7] - Basic earnings per share dropped to HK34.00 cents from HK59.92 cents in the same period last year[7] - Total comprehensive expense for the period was HK$3,396.98 million, an improvement from HK$5,842.11 million in the previous year[7] - Total revenue for the six months ended 30 September 2023 was HK$36,049.154 million, a decrease of 16.1% compared to HK$42,976.485 million in the same period last year[27] - Profit for the period attributable to owners of the company decreased to HK$1,830,412,000 for the six months ended 30 September 2023 from HK$3,260,039,000 in the same period last year[52] - Adjusted net profit for the six months ended 30 September 2023 was HK$2,458,926 thousand, compared to HK$3,289,857 thousand in the same period last year[132] - Profit for the period (Nearest HKFRS Measure) attributable to owners of the Company was HK$1,830,412 thousand for the six months ended 30 September 2023, down from HK$3,260,039 thousand in the previous year[132] Cost and Expenses - The company's cost of sales decreased by 15.8% to HK$30,325.58 million from HK$36,004.63 million in the prior year[6] - Finance costs increased by 22.0% to HK$994.47 million compared to HK$815.11 million in the previous year[6] - Finance costs for the six months ended 30 September 2023 increased to HK$994,471,000 from HK$815,111,000 in the same period last year, primarily due to higher interest on bank and other borrowings[44] - PRC Enterprise Income Tax decreased to HK$490,367,000 for the six months ended 30 September 2023 from HK$844,243,000 in the same period last year[45] - Income tax expenses decreased by 22.7% year-on-year to HK$412,023,000[126] Assets and Liabilities - Non-current assets decreased from HK$105,070,770 thousand to HK$100,925,608 thousand, a decline of 3.9%[10] - Investment properties decreased from HK$2,881,831 thousand to HK$2,602,363 thousand, a decline of 9.7%[10] - Property, plant and equipment decreased from HK$66,891,255 thousand to HK$64,882,376 thousand, a decline of 3.0%[10] - Current assets decreased from HK$52,220,439 thousand to HK$48,429,874 thousand, a decline of 7.3%[10] - Inventories decreased from HK$5,655,445 thousand to HK$5,214,914 thousand, a decline of 7.8%[10] - Contract assets decreased from HK$12,706,697 thousand to HK$10,424,671 thousand, a decline of 18.0%[10] - Trade and other receivables decreased from HK$16,702,411 thousand to HK$15,312,855 thousand, a decline of 8.3%[10] - Net current liabilities increased from HK$440,236 thousand to HK$3,703,076 thousand, a significant shift from net assets to net liabilities[12] - Total equity decreased from HK$64,790,379 thousand to HK$61,318,078 thousand, a decline of 5.4%[12] - Non-current liabilities decreased from HK$40,720,627 thousand to HK$35,904,454 thousand, a decline of 11.8%[12] - Total assets as of 30 September 2023 were HK$149,355,482,000, with bank balances and cash amounting to HK$11,118,020,000[127] - The Group's total bank loans and other loans amounted to HK$55,430,323,000 as of 30 September 2023, a decrease from HK$60,010,801,000 as of 31 March 2023[128] - Contract liabilities decreased to HK$8,820,015,000 as of 30 September 2023 from HK$9,080,132,000 as of 31 March 2023[129] - Trade receivables decreased to HK$5,527,963,000 as of 30 September 2023 from HK$6,282,627,000 as of 31 March 2023[129] - Trade and bill payables increased slightly to HK$14,657,737,000 as of 30 September 2023 from HK$14,647,872,000 as of 31 March 2023[129] - The Group pledged bank deposits of HK$135,651,000 and property, plant, and equipment of HK$6,172,463,000 as of 30 September 2023[129] Cash Flow - Net cash from operating activities for the six months ended 30 September 2023 was HK$7,565,434 thousand, compared to HK$4,736,177 thousand in the same period last year[17] - Net cash used in investing activities for the six months ended 30 September 2023 was HK$2,591,192 thousand, compared to HK$3,895,349 thousand in the same period last year[17] - Net cash used in financing activities for the six months ended 30 September 2023 was HK$3,541,257 thousand, compared to a net cash inflow of HK$3,999,376 thousand in the same period last year[17] - Net increase in cash and cash equivalents for the six months ended 30 September 2023 was HK$1,432,985 thousand, compared to HK$4,840,204 thousand in the same period last year[17] - Cash and cash equivalents at 30 September 2023 were HK$10,982,369 thousand, compared to HK$13,807,999 thousand at 30 September 2022[17] Business Segments and Sales - Sales of natural gas decreased by 12.0% to HK$21,718.489 million from HK$24,675.655 million in the previous year[27] - Sales of liquefied petroleum gas (LPG) dropped by 28.5% to HK$8,421.663 million from HK$11,776.299 million[27] - Gas connection and engineering design and construction revenue declined by 15.4% to HK$3,364.508 million from HK$3,975.623 million[27] - Value-added services revenue increased slightly by 1.1% to HK$1,804.486 million from HK$1,785.589 million[27] - Other businesses revenue decreased by 3.1% to HK$740.008 million from HK$763.319 million[27] - The company's total sales of natural gas increased by 1.7% to 16.97 billion m3 in the first half of the financial year[91] - Total natural gas sales volume increased by 1.7% to 16,971 million m³ in the first half of the fiscal year[94] - Industrial natural gas sales through retail business decreased by 4.3% to 4,896 million m³, while commercial sales increased by 7.6% to 1,517 million m³[97] - CNG/LNG refilling station sales declined by 18.4% to 291 million m³[97] - LPG sales volume amounted to 1.98 million tons, a year-on-year increase of 9.8%, with wholesale business at 1.58 million tons (up 8.7%) and end-user retail at 399,000 tons (up 14%)[111] - LPG sales revenue was HK$8,421,663,000, a year-on-year decrease of 28.5%, while profit before tax increased by 138.4% to HK$194,341,000[111] Investments and Capital Commitments - The Group acquired property, plant and equipment at a total cost of approximately HK$3,729,348,000 during the period[55] - The Group disposed of or wrote-off property, plant and equipment with a carrying amount of HK$198,816,000, resulting in a gain on disposal of HK$5,245,000[55] - The Group recognised approximately HK$62,386,000 of right-of-use assets and HK$42,324,000 of lease liabilities for the six months ended 30 September 2023[55] - The fair value of investment properties decreased by HK$59,161,000, recognised directly in the condensed consolidated statement of profit or loss and other comprehensive income[54] - Capital commitments for property, plant, and equipment increased to HK$227,044,000 as of 30 September 2023 from HK$179,574,000 as of 31 March 2023[130] - Capital commitments for construction materials increased to HK$171,207,000 as of 30 September 2023 from HK$134,206,000 as of 31 March 2023[130] - Capital commitments for properties under development decreased to HK$188,211,000 as of 30 September 2023 from HK$235,176,000 as of 31 March 2023[130] Legal and Contingent Liabilities - The company faced a legal claim of approximately HK$140 million from a former director, including alleged salary and bonus losses[86][87] - The company has been advised by legal advisors that there is a sound basis for defending the claims, and no provision for contingent liabilities was made as of 30 September 2023[86][87] Strategic Initiatives and Future Plans - The company leveraged digital-twin technology for visualization-based operations and delicacy management in the intelligent pipeline networks of the Hangzhou Asian Games Village[90] - The company implemented price pass-through policies and gas price adjustments for residential users to bolster industry reform and steady dollar margin recovery in gas sales[90] - The Group invested in the Safety Control Digital and Intelligent System, including the Safety Alert program, which provides data collection, assessment, monitoring, and early warning functions, enhancing workplace safety[99][100] - China Gas is diversifying its business portfolio by developing commercial and industrial PV, energy storage, and energy-conservation services[136] - The Group is enhancing its HSE Management System and digitalizing workplace safety to improve intrinsic safety[136] - China Gas is transitioning from a natural gas supplier to an integrated energy supplier and service provider, focusing on "multi-energy integration and gas-power coordination"[136] - The Group has joined the Oil and Gas Methane Partnership (OGMP) and has formulated mid- to long-term strategies for methane emissions reduction[138] - China Gas is aligning its operations with the UN Sustainable Development Goals (SDGs) and China's clean energy strategies, focusing on carbon peaking and neutrality goals[138] - The company declared an interim dividend of HK15.0 cents per share for the six months ended 30 September 2023, up from HK10.0 cents per share in the same period last year[142][143] - The company will focus on growing new businesses, including value-added services and integrated energy, while strengthening its core natural gas business[140][141] - The company aims to transform into a leading clean energy supplier and low-carbon transformation contributor, emphasizing innovation, green development, and social responsibility[140][141] - The company has adopted a methane emission reduction strategy as the first Chinese member and gold member of the Oil and Gas Methane Partnership (OGMP)[139] - The company will leverage national policies such as old pipeline renovation and the "bottled-to-piped-gas" project to drive growth[140][141] Shareholder Information - Mr. LIU Ming Hui holds 975,745,428 shares, representing 17.95% of the total issued shares of the company[151] - Mr. HUANG Yong holds 168,783,200 shares, representing 3.11% of the total issued shares of the company[151] - Mr. ZHU Weiwei holds 6,000,000 shares, representing 0.11% of the total issued shares of the company[151] - Ms. LI Ching holds 2,000,000 shares, representing 0.04% of the total issued shares of the company[151] - Mr. LIU Mingxing holds 800,000 shares, representing 0.01% of the total issued shares of the company[153] - Mr. ZHAO Yuhua holds 2,400,000 shares, representing 0.04% of the total issued shares of the company[153] - Dr. MAO Erwan holds 2,200,000 shares, representing 0.04% of the total issued shares of the company[153] - Mr. LIU holds 189,356,089 shares in China Gas Fortune Marine, representing 60.00% of the total issued shares of the associated corporation[154] - Mr. LIU holds 29 shares in Electronic Business Development Company Limited, representing 29% of the total issued shares of the subsidiary[156] - China Gas Group Limited beneficially owns 569,262,200 shares, with 50% ownership by Joint Coast, which is wholly-owned by Mr. LIU[157] - Mr. HUANG is deemed to be interested in a total of 168,783,200 shares, including 168,013,200 shares beneficially owned by him and 770,000 shares held by his spouse[157] - The percentage of shares is calculated based on 315,593,482 shares of China Gas Fortune Marine in issue as of 30 September 2023[157] - Mr. LIU is deemed to be interested in 189,356,089 shares of China Gas Fortune Marine beneficially owned by China Gas Group Limited (incorporated in Anguilla), with 50% ownership by Joint Coast, which is wholly-owned by Mr. LIU[157] - The percentage of shares is calculated based on 100 shares of Electronic Business in issue as of 30 September 2023[157] - Mr. LIU holds a 29% interest in Yipin Smart Living (BVI) Company Limited, a wholly-owned subsidiary of the company, which holds a 71% interest in Electronic Business[157] - As of 30 September 2023, the outstanding share options exercisable under the 2013 Share Option Scheme is 3,000,000[163] - Total share options granted to directors and eligible employees as of 30 September 2023 amounted to 245,017,600, with 3,000,000 new options granted during the period[169] - All share options granted to directors and eligible employees on 23 April 2020 were lapsed or cancelled, totaling 245,017,600 options[169] - Service providers were granted 3,000,000 new share options on 24 May 2023, with an exercise price of HK$10.50 and an exercise period until 23 May 2025[169] - The 2013 Share Option Scheme expired on 30 September 2023, and no further share options may be granted under this scheme[170] - The fair value of 3,000,000 share options granted on 24 May 2023 was approximately HK$5,796,000, with a closing price of HK$9.55 per share before the grant date[172] - The 2023 Share Option Scheme allows a maximum of 544,033,577 share options to be granted, representing approximately 10% of the total issued shares as of 30 September 2023[173] - The maximum number of share options permitted to be granted to service providers under the 2023 Share Option Scheme is 54,403,357, representing 1.00% of the total issued shares as of 30 September 2023[173] - No share options were granted, exercised, lapsed, or canceled under the 2023 Share Option Scheme during the six months ended 30 September 2023[176] - The maximum number of share options available for grant under the 2023 Share Option Scheme as of 30 September 2023 is 544,033,577, representing approximately 10% of the total issued shares of the company[176] - The service provider sub-limit for the 2023 Share Option Scheme is 54,403,357, representing approximately 1% of the total issued shares of the company as of 30 September 2023[176] - No shares were awarded under the Share Award Scheme during the six months ended 30 September 2023[179] - 15,000 awarded shares vested on 18 June 2023, with a weighted average closing price of HK$9.37 before the vesting date[182] - The total balance of awarded shares as of 30 September 2023 is 15,000, all of which are for employees[181] - The Share Award Scheme allows for a maximum award of 1% of the company's issued share capital to any selected participant within any 12-month period[177] - The Share Award Scheme is valid for 10 years from its adoption date, with no further awards involving new shares allowed after the amendment on 23 August 2023[177] - The number of shares available for grant under the Share Award Scheme at the beginning and end of the period ended 30 September 2023 was 271,971,788 shares, representing approximately 5.00% of the total issued shares of the Company[184] - The number of shares that may be issued in respect of options and awards granted under all schemes of the Company during the period divided by the weighted average number of shares of the relevant class in issue for 30 September 2023 is approximately 0.06%[184] - Beijing Enterprises Group Company Limited holds 1,277,935,143 shares, representing approximately 23.51% of the total issued shares of the Company[186] - Beijing Enterprises Group (BVI) Company Limited holds 1,274,965,143 shares, representing approximately 23.46% of the total issued shares of the Company[186