Thursday, March 28, 2024
 
Columnist
Martin Hennecke
 
TOWNGAS CHINA
HKEx Stock Code : 01083 
 
Corporate Profile
Principally engaged in the sales and distribution of natural gas and liquefied petroleum gas (¡§LPG¡¨) in the People's Republic of China (the ¡§PRC¡¨) including the provision of piped natural gas and LPG, construction of gas pipelines, the operation of city gas pipeline network, the operation of natural gas automobile refilling stations, and the sale of gas household appliances.

Business Review - For the year ended December 31, 2012

In 2012, the Group capitalised on opportunities presented by the vigorous development of the natural gas industry in China to embrace ever brighter business prospects in the energy sector. In addition, we also excelled in our environmental protection, community welfare and corporate governance achievements.

Sales of Piped Gas

In 2012, the Group sold a total of 5.32 billion cubic metres of piped gas, representing an increase of 13.9% against 4.67 billion cubic metres sold last year. Industrial gas sales grew by 310 million cubic metres to account for approximately 58.4% in the total volume of gas sold by the Group. Commercial gas sales increased slightly to approximately 16.8% of the total volume of gas sold by the Group. Residential gas sales in turn accounted for approximately 24.8% of total gas volume sold. The continuing growth of our industrial and commercial gas sales demonstrated the success of the Group's project development strategy to strengthen industrial gas consumption, while also benefiting from China's stable economic growth. A gas sales profile underpinned by industrial and commercial gas consumption will help to ensure ongoing growth of the Group's future gas sales. It also allows the Group to promptly shift upstream price adjustments to industrial and commercial customers, while provides further assurance for the ongoing profit growth of the Group's gas sales.

Project Acquisitions

We continued to expand the geographic extent of our business presence in 2012 with the acquisitions of eight new projects in Liaoning, Shandong, Jiangxi, Fujian and Hebei Provinces. These included a piped city gas and a midstream gas pipeline project in Wafangdian City, Dalian, Liaoning Province and piped gas projects in Xinqiu District in Fuxin City, Liaoning Province; Binhai Science and Technology Industrial Park in Zhaoyuan City, Shandong Province; Pingyin County in Jinan City, Shandong Province; Yifeng County in Yichun City, Jiangxi Province; as well as debut projects in Fujian Province and Hebei Province. These included piped gas projects in Changting County, Longyan City, Fujian Province and Lingang Industrial Park, Shanhaiguan District in Qinhuangdao City, Hebei Province. The operating area of Changting County comprises three large-scale industrial parks, including Changting Rare Earth Industrial Park, a provincial-level industrial park and a key national production base for the rare earth industry, while the Lingang Industrial Park is a provincial-level industrial cluster for gas consumption-related industries. These two projects hold enormous potential for industrial gas consumption, providing solid foundations for the next phase of our development in Fujian and Hebei Provinces. Total gas consumption of the eight projects mentioned is expected to reach approximately 600 million cubic metres in five years.

There are four new projects for the Group in early 2013, consisting of city gas projects located at Shiheng Town in Feicheng City and Economic Development Zone in Boxing County in Binzhou City, Shandong Province; the Zhengpugang Xin Qu Modern Industrial Zone in Maanshan City, Anhui Province; and Mianzhu City in Sichuan Province. These projects will provide solid foundation for the development of the Group's business in 2013. Total gas consumption of these four new projects is expected to reach approximately 350 million cubic metres in five years.

Business Outlook - For the year ended December 31, 2012

With China's ongoing growth into an affluent society, the Group's competitive edges both in gas supply safety and excellent customer services will become more prominent. Looking forward, we will be leveraging opportunities arising from the ¡§12th Five-Year Plan¡¨ to expedite our development and increase efficiencies, while doing our best to enhance management standards and customer satisfaction levels, to sustain our leading position in the market.

Under the ¡§12th Five-Year Plan¡¨, the economy of China will develop rapidly and focus will be put on environmental protection as well as pollution reduction. We will be seeking growth underpinned by quality and efficiency. Apart from setting aggressive business targets, project companies of the Group will also ensure that challenging targets are achieved in conjunction with relevant benchmarks in gas safety, customer services and human resources, as we maintain our role as a model in China's city gas industry.

Source: Towngas China (01083) Annual Results Announcement
Chairman Chan Wing Kin, Alfred Issued Capital (shares) 2,613M
Par Value HKD 0.1 Market Capitalisation (HKD) 18,133M
 
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