Financial Performance - Revenue grew by 7.3% year-on-year to HKD 101.27 billion in 2023[11] - The Group's profit attributable to owners increased by 10.4% to HK5.22billion,withaproposedfinaldividendof100.69HKcentsandatotaldividendof115.69HKcentsfortheyear,representingadividendpayoutratioof50.34.04 billion, with segment profit growing by 19.0% to HK1.37billion,andexcludingcurrencyfluctuations,revenueandprofitgrewby33.3101.27 billion in 2023, representing a year-on-year increase of 7.3%[38] - The Group's operating cash flow increased by HK5.8billiontoHK10.16 billion, representing a 58.0% year-on-year growth[36] - The Group's share price increased by 7.5 times from HK3.4in2008toHK25.6 in 2023, and its market capitalization grew by 19.2 times from HK3.08billiontoHK59.24 billion[41] - The Group's profit increased by 21.8 times from HK240millionin2008toHK5.22 billion in 2023, while turnover grew by 33.9 times from HK2.99billiontoHK101.27 billion[41] - In 2023, the Group's revenue increased by 7.3% to HK101.27billion,withprofitattributabletoownersrisingby10.45.22 billion[46] - The Group's operating profit increased by 6.3% to HK9.21billionin2023,andcashgeneratedfromoperationsrosefromHK4.35 billion in 2022 to HK10.16billionin2023[46]−Revenuefor2023increasedby7.3101,271,905,000 compared to HK94,338,329,000in2022[66]−Grossprofitroseby2.018,451,671,000 from HK18,081,851,000in2022[66]−Profitfortheyeargrewby11.97,058,886,000 from HK6,308,519,000in2022[66]−Netcashfromoperatingactivitiessurgedby133.410,156,593,000 from HK4,351,390,000in2022[66]−Totalassetsincreasedby22.8137,871,085,000 from HK112,303,585,000in2022[69]−Bankbalancesandcashgrewby55.09,978,468,000 from HK6,437,479,000in2022[69]−Netprofitmargin(attributabletoshareholders)improvedby0.2pptto5.263,383,682,000 from HK52,545,423,000in2022[69]−TheGroup′sannualrevenuein2023amountedtoHK101.27 billion, a 7.3% increase from HK94.34billionin2022,drivenbyrapiddevelopmentingassalesandrisingupstreamnaturalgasprices[74]−ProfitattributabletoownersoftheCompanyincreasedby10.45.22 billion in 2023 from HK4.73billionin2022[74]−Netoperatingcashflowaftertaxin2023wasHK10.16 billion, with bank balances and cash totaling HK9.98billionattheendoftheyear[75]−NetcashinflowaftertaxfromoperationsduringtheyearamountedtoHK10.16 billion (2022: HK4.35billion)[77][79]−Bankbalancesandcashatyear−endwereHK9.98 billion (2022: HK6.44billion),with99.4540,540,830,000[179] - The company recommended a 2023 Final Dividend of 100.69 HK cents per share, with a total distribution for 2023 of 115.69 HK cents per share (2022: 105 HK cents per share)[180][181] Gas Sales and Operations - Total natural gas sales volume increased by 8.1% year-on-year to 38.78 billion cubic meters in 2023[11] - Annual gas sales volume reached 38.784 billion cubic meters, serving 57.78 million customers by the end of 2023[8] - Natural gas sales increased by 8.1% to 38.78 billion cubic meters, with industrial gas sales accounting for 51.9% (20.11 billion cubic meters), commercial gas sales for 21.2% (8.21 billion cubic meters), and residential gas sales for 24.3% (9.44 billion cubic meters)[16][17] - The Group's national apparent consumption of natural gas reached 394.53 billion cubic meters, a 7.6% increase year-on-year, with a total gas volume of approximately 3.00 billion cubic meters, representing a 68.0% year-on-year increase[15] - Gross gas sales volume increased by 8.1% from 35.89 billion m3 in 2022 to 38.78 billion m3 in 2023[48] - Revenue from sales and distribution of gas fuel and related products accounted for 81.6% of total revenue in 2023, up from 79.6% in 2022[46] - Gross gas volume in 2023 reached 38.78 billion cubic meters, an 8.1% increase compared to the previous year[74] - Total connected customers increased by 3,412,568 to 57,779,698 in 2023, with residential customers accounting for 57,294,810, a 3,369,962 increase from 2022[73] - Gross sales volume of gas increased by 8.1% to 38,784 million cubic meters in 2023, with residential, industrial, and commercial segments growing by 11.1%, 7.2%, and 9.0% respectively[73] Expansion and Acquisitions - CR Gas operates 276 city gas projects across 25 provinces in China, including 15 provincial capitals and 76 prefecture-level cities[5] - The total connectable population covered by CR Gas is 346 million[8] - CR Gas aims to expand through sustainable organic growth and quality external acquisitions while exploring new opportunities in the gas value chain[14] - The Group developed 41,310 new industrial and commercial users and 3,313,000 residential users, including 2,833,000 new house connections, 384,000 old house connections, and 46,000 rural "coal-to-gas conversion" users[19] - The Group signed 3 new projects and registered 8 projects, expanding its operational region by 4,057 square kilometers, and consolidated 重慶燃氣集團股份有限公司, acquired 51% equity in 昆明煤氣(集團)控股有限公司, and increased its shareholding in 廈門華潤燃氣有限公司 by 2%[20][21] - The Group's registered city gas projects reached 276, spanning 25 provinces, including 15 provincial capital cities and 76 prefecture-level cities[22] - The Group invested in 11 new projects in 2023, with expected improvements in return rates as these projects achieve higher operating efficiency and generate more returns[75] - The Group spent HK2.74billionincapitalexpenditureforacquisitionexpansionandHK5.15 billion on upgrading and expanding city gas pipelines and related facilities (2022: HK6.24billion)[77][79]−In2023,theCompanyinvestedorpaidHK2.74 billion in 11 city gas projects, with most projects wholly or majority-owned by the Group[190] - As of December 31, 2023, CR Gas's portfolio included 276 city gas projects, covering 25 Chinese provinces, including 15 provincial capitals and 76 prefecture-level cities[190] Operational Efficiency and Cost Management - The company focuses on improving operational efficiency and consolidating its core advantages in the city gas market of sophisticated regions[13] - Centralized procurement accounted for 90.14% of total material procurement expenditure by the end of 2023, reducing costs while maintaining product quality[53] - The company implemented benchmarking initiatives across all business sectors, leading to significant improvements in cost reductions and performance in 2023[50] - The company centralized design and construction activities, enhancing standardization and further reducing costs[52] - The company improved customer service by increasing household safety inspection success rates, shortening complaint processing times, and promoting internet payments[53] - The company enhanced cash management by including more member companies in the system, significantly increasing cash reserves and reducing overall borrowing costs[54] - The company streamlined supply chain management with rigorous tender systems and new guidelines for projects and quality control[53] - The company promoted IT systems across various operational levels, including project management, financial reporting, and customer service, to improve efficiency[53] - The Group centralized cash management, significantly increasing the cash pool size and reducing overall borrowing costs[55] - The Group implemented taxation rationalization measures to reduce tax exposure and expedite tax setoffs and refunds[55] Safety and Training - The Group conducted safety audits for 74 regional companies, identifying over 5,031 hidden safety hazards in 2023[57][58] - The Group provided a total of 372,800 person/times of safety training for employees in 2023[57][59] - The Group invested HK0.111billionin2023tocompletethetransformationof80kmofcastironpipeline[58]−TheGroupoperates5regionaltrainingcentersacrossChina,locatedinWuxi,Jining,Zhengzhou,Fuzhou,andChengdu[60][61]CorporateGovernanceandLeadership−Mr.YANGPing,aged49,wasappointedasExecutiveDirectorandCEOon23rdDecember2021,andisalsothechairmanoftheCorporateGovernanceCommittee[92][93]−Mr.LIXiaoshuang,aged45,wasappointedasExecutiveDirectoron8thDecember2023,andhasbeenVicePresidentsince2016andCFOsince2017[94]−Mr.WANGGaoqiang,aged54,wasappointedasNon−executiveDirectoron15thSeptember2021,withover30yearsofexperienceincorporatefinanceandinternalaudit[95]−Mr.LIUJian,aged63,wasappointedasNon−executiveDirectoron15thSeptember2021,withextensiveexperienceininternationaltradeandsales[96]−Ms.GELu,aged52,wasappointedasNon−executiveDirectoron27thSeptember2023,withover30yearsofexperienceinthepharmaceuticalindustry[97]−Mr.WONGTakShing,aged73,wasappointedasanIndependentNon−executiveDirectorin1998andservesastheChairmanoftheRemunerationCommittee[98]−Mr.YUHonTo,David,aged76,wasappointedasanIndependentNon−executiveDirectorandChairmanoftheAuditandRiskManagementCommitteeonDecember28,2012[99]−Mr.YANGYuchuan,aged60,wasappointedasanIndependentNon−executiveDirectorandamemberoftheAuditandRiskManagementCommitteeinAugust2018[100]−Mr.LIPokYan,aged66,wasappointedasanIndependentNon−executiveDirectorandamemberoftheRemunerationCommitteeon27thSeptember2023[101]−TheCompanyhasadoptedthemandatoryprovisionsoftheCorporateGovernanceCodeandmaintainsaCorporateGovernanceHandbook,updatedsince2005[107][108]−TheCompanycompliedwiththeCorporateGovernanceCodethroughouttheyear,exceptfordeviationsfromprovisionsC.3.3andF.2.2[108][109]−TheBoardconsistsof2ExecutiveDirectors,4Non−executiveDirectors,and4IndependentNon−executiveDirectors,withone−thirdofDirectorsrequiredtoretirebyrotationateachannualgeneralmeeting[114]−TheBoardheld5meetingsin2023,withdetailedattendancerecordsprovidedforeachDirector[115][116]−Thecompanyheldonegeneralmeetingin2023,withattendancedetailsforDirectors[117]−Thecompanyhasatotalof58,608employeesasoftheendof2023,comprisingapproximately19,341femalesand39,267males,reflectingagenderratioof2:1[120][121]−ToachievegenderdiversityontheBoard,thecompanyappointedonefemaleDirectorin2023tocomplywiththeListingRules[120][121]−TheBoardwillannuallyreviewtheimplementationandeffectivenessoftheBoarddiversitypolicy,consideringiteffectiveinachievingdiversity[122]−TheNominationCommitteedidnotsetanymeasurableobjectivesforachievingdiversityontheBoardduringthereviewyear[120][121]−ThecompanyencouragesallDirectorstoparticipateincontinuousprofessionaldevelopmenttoenhanceandupdatetheirknowledgeandskills[125][126]−TheAuditandRiskManagementCommitteereviewedthefinancialstatementsandyearlyresultsannouncementfor2022,andthehalf−yearlyandyearlyresultsfor2023,includingtheGroup′sfinancialandaccountingpoliciesandpractices[139]−TheAuditandRiskManagementCommitteeheldfourmeetingsin2023,withdetailedattendancerecordsforeachmember[140]−TheRemunerationCommitteeheldthreemeetingsin2023toreviewanddeterminethebonusandcompensationofExecutiveDirectorsandseniormanagement[142]−Theremunerationofseniormanagementfortheyearended31stDecember2023iscategorizedintobands,with3individualsearningbetweenHKD2,000,001toHKD2,500,000and4individualsearningbetweenHKD2,500,001toHKD3,000,000[144]−TheNominationCommitteeheldtwomeetingsin2023,withattendancedetailsprovidedforeachmember[149][150]−TheNominationCommitteeevaluatescandidatesbasedoncriteriaincludingdiversity,commitment,industryexperience,integrity,andpotentialcontributionstotheBoard[151]−TheNominationCommitteemayconsultvarioussourcesforidentifyingsuitablecandidates,suchasreferrals,advertising,andthird−partyrecommendations[153]−TheNominationCommitteeconsidersfactorslikeattendance,participation,andperformancewhenrecommendingretiringDirectorsforre−appointment[151]−TheNominationCommitteefollowsastructuredprocessforevaluatingandrecommendingcandidates,includinginterviews,backgroundchecks,andsubmissionofpersonalinformation[153]−TheInvestmentCommitteewasresponsibleformakinginvestmentdecisionswithinthethresholdofUS8 million to US20millionorotherthresholdsauthorizedbytheBoard[155]−TheInvestmentCommitteewasdissolvedanddischargedon25thAugust,2023[155]−TheCorporateGovernanceCommitteeheldonemeetingon31stMarch,2023,withfullattendancefromitsmembers[158]−TheBoardmaintainsaneffectiveriskmanagementandinternalcontrolsystemtomanagerisksrelatedtoESGandotherbusinessobjectives[159]−TheInternalAuditDivisionconductedreviewsofkeyriskmanagementsystemsandreportedfindingstotheAuditandRiskManagementCommitteeforfurtherimprovement[159]−TheCompanyhasadoptedanti−corruptionandwhistleblowingpoliciestoregulateemployeeconductandreportanymisconduct[160]−TheBoardissatisfiedwiththeeffectivenessofthecurrentriskmanagementandinternalcontrolsystemsbasedontheannualreview[160]−TheCompanyhasadoptedtheModelCodeforSecuritiesTransactionsbyDirectorsassetoutinAppendixC3oftheListingRules,andalldirectorscompliedwiththecodeduringtheyear[161]−ThecompanypaidHK12.234 million for audit services and HK1.335millionforinterimreviewservicesin2023[167]−Non−assuranceservices,includingassuranceoncontinuingconnectedtransactionsandagreed−uponproceduresonannualresults,costHK556,000 and HK111,000respectivelyin2023[167]−Totalfeespaidorpayabletotheexternalauditor,KPMG,amountedtoHK14.236 million for the year ended 31st December 2023[167] - The company's risk management and internal control systems were deemed effective by the Board based on the annual review[162] - The company has adopted an anti-corruption and anti-bribery policy and a whistleblowing policy to address improprieties[162] - All directors complied with the Model Code for Securities Transactions by Directors during the year[163] - The company's shareholders holding at least one-tenth of the paid-up capital can convene a special general meeting[170] - Shareholders holding at least 5% of the paid-up capital or 100 registered shareholders can request the company to circulate a statement of up to 1,000 words for a general meeting[170] - The company's Company Secretary, Mr. LO Chi Lik Peter, resigned effective 1st January 2024, and Ms. CHENG Kwai Yuk was appointed as the new Company Secretary[169] - The primary contact for the Company Secretary is Mr. LI Xiaoshuang, the Executive Director and Chief Financial Officer[169] Sustainability and ESG - The Group's ESG rating was maintained at A by MSCI, reflecting its commitment to sustainable development[35] - The company aims to become a world-class energy service enterprise trusted by the public, focusing on reducing energy costs and carbon emissions for customers[110][111] - The company's strategy includes innovation in development models, upgrading products and services, and adhering to a low-carbon cycle to enhance sustainability[112] - Charitable donations by CR Gas amounted to HK$3,695,000 with cumulative volunteer services of 79,000 persons/times in 2023[65] Market and Economic Environment - China's GDP grew by 5.2% year-on-year in 2023, with natural gas consumption expected to continue steady growth[11] - Natural gas sales are expected to grow steadily in 2024, supported by declining international natural gas prices and China's push for carbon neutrality[42] - Moody's, Standard & Poor's, and Fitch maintained the Group's credit rating at A2, A-, and A- respectively in 2023, reflecting strong financial performance[39][41] - The Group plans to adhere to the "1+2+N" business strategy in 2024, focusing on steady growth in principal business and