|- Profit Attributable to Shareholders Increased 73% to RMB34.4M|
- Striving to Become an Integrated Smart Energy Provider in China
- HK IPO in progress
HONG KONG, Aug 30, 2018 - (ACN Newswire) - Changfeng Energy Inc. (Changfeng), a company listed on the Toronto Venture Exchange (TSXV:CFY), today announced its interim results for the six months ended 30 June 2018 (1H 2018).
- Revenues increased by 20% to RMB204.9M (1H 2017: RMB170.2M)
- Gross profit grew by 14% to RMB89.2M (1H 2017: RMB78.3M)
- Profit attributable to shareholders from continuing operations increased by 73% to RMB 34.4M (1H 2017: RMB19.8M)
- Total gas volume sold up by 19%
- Basic earnings per share from continuing operations was RMB .53 (1H 2017: RMB .30)
For 1H 2018, the Group recorded total revenue of RMB204.9M (1H 2017: RMB170.2M), up by 20% year-on-year (YoY). Of the total revenue, gas distribution utility and compressed natural gas (CNG) vehicle refueling contributed RMB176.3M and RMB28.6M respectively. Gross profit rose by 14% to RMB89.2M (1H 2017: RMB78.3M). EBITDA from continuing operations was RMB 32.2M (1H 2017: RMB28.0M). Profit attributable to shareholders from continuing operations was RMB34.4M (1H 2017: RMB19.8M), increased by 73% YoY, due to increase in profit from continue operations and fair value change relating to the disposal of controlling interest in a subsidiary. Basic earnings per share from continuing operations amounted to RMB 0.53 (1H 2017: RMB 0.30).
This is the second year of Changfeng's three-year plan to strategically shift its corporate focus to sustainable energy in combination with natural gas to become an integrated energy provider in the PRC. During the reported period, total gas sales volume rose by 19% to 29.5 million cubic metres, mainly contributed by Sanya and the commencement of gas sales in the Hebei region in the second quarter of 2018. Increase in gas price continued since May 2017.
Mr. Huajun Lin, Chairman, President and CEO of Changfeng, who has over 20 years of experience in the natural gas industry, said: "We are pleased to have delivered satisfactory results with growing revenue and improved profitability. We expect the volume of gas sold during the rest of the year to increase with our existing pipeline networks in the Sanya Region continuing to add both residential and commercial and industrial customers to its network, the industrial customers in Hebei Province, and the successful procurement of the two new LNG supply customers in Wenchang City, Hainan Province this month, which marked Changfeng's first step into extending its natural gas distribution business outside of Sanya City on the Hainan Island.
We will continue to put great effort in the preparation of the HK IPO as to meet the target of successful listing on the HKEx within the first half of 2019, which will serve to broaden Changfeng's investor base, increase stock liquidity, and allow the company to gain access to and recognition of strategic investors in the Chinese market."
Projects in Operation
Currently Changfeng has six projects in operation: two pipeline natural gas distribution projects, two liquefied natural gas ("LNG") supply distribution projects, and two compressed natural gas ("CNG") vehicle refueling stations. Changfeng has a 30-year exclusive concession right to distribute natural gas in Sanya City and the supply of natural gas to three factories in Xingtai City, Shijiazhuang City and Baoding City, Hebei Province, which officially commenced in March 2018, April 2018 and May 2018 respectively.
Projects under Development
Major projects under development include the integrated smart energy project (the "Haitang Bay Integrated Smart Energy Project") which combines the usage of multiple clean energy sources, including solar, hydro, electricity, and natural gas (CCHP/Co-Gen), to supply cooling, heating, as well as hot water to the hotels, shopping centers, and households in the Haitang Bay area of Sanya City Hainan Province, with the 30-year concession right to build, own and operate four energy-processing stations there.
IPO Schedule in Hong Kong
Changfeng has been pursuing its plans to launch a public offering (the "HK IPO") of its shares together with the listing of its shares on The Stock Exchange of Hong Kong Limited (the "HKEx"). Since late 2017, the Company has successfully procured several new projects that are currently either under development or at the initial stage of operation, whose contributions will only be reflected in the financial results as those projects become fully operational.
Consequently, management of Changfeng has determined to reschedule its pursuit of the HK IPO for completion during the first half of 2019, which would permit it to advance these new projects and enable their results to be reflected in its financial statements for the year ending December 31, 2018, thereby incorporating those results in the HK IPO process and potentially enhancing the Company's valuation.
Prospects and Strategic Focus
For the rest of 2018, Changfeng will continue to implement its long-term growth strategy through its proposed Guangdong Grid pipelined gas project in the Western Guangdong area of the Guangdong Province and work towards moving forward the development of the Haitang Bay Integrated Smart Energy Project with the EDF Group in Sanya City to commence commercial operation by the end of 2018.
Changfeng has always strived to provide natural gas to its customers, a cleaner alternative to coal since the Company's inception over 20 years ago. As the Chinese economy now moves away from fossil dependency in correspondence with central government guidance, Changfeng looks to integrated smart energy and clean technology to complement the usage of natural gas. The following three sectors will be Changfeng's main business lines in the next three years from 2017-2019: a) natural gas downstream distribution, including urban city pipeline gas distribution, gas refueling stations, and LNG distribution; b) integrated smart energy system to distribute power, heat, cooling, and hot water; and c) natural gas mid-stream infrastructure.
Mr. Lin concluded: "Since the Company's inception over 20 years ago, Changfeng has always strived to provide natural gas, a cleaner alternative to coal, to our customers. We believe that China's smart energy is on a strong growth trend and presents huge potential with opportunities. Changfeng will continue to adhere to its development strategies and leverage its abundant experience in operating an advanced model so as to provide cleaner energy, striving for the highest returns to our shareholders."
About Changfeng Energy Inc. (Toronto listed symbol: TSXV:CFY)
Changfeng Energy Inc. is a leading integrated smart energy provider and natural gas distribution company (or natural gas utility) in China. Changfeng has been listed on the Toronto stock exchange of Canada ("TSXV") since 2008, and is the only natural gas company in China listed on the TSXV. In 2009, Changfeng was recognized as one of China's Top Ten Most Influential Brands in the natural gas industry. For details of Changfeng, please visit: www.changfengenergy.com.
Topic: Press release summary
Sectors: Daily Finance, Daily News
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