Slide 1: Towngas China 2020 Annual Results Announcement
Towngas China (1083.HK) 2020 Annual Results Announcement 1
Slide 2: Financial Review
Go Green Every Day 38 22 Bia cb MIRE Financial Review for, ee a
Slide 3: 2020 financial results summary
(HK$ Mn) 2020 2019 Change Turnover Gas Sales 10,616 10,835 -2% Connection Fees 2,210 2,089 +6% 12,826 12,924 -1% Operating Profit 1,824 1,756 +4% Profit Attributable to Shareholders 1,447 1,308 +11% Earnings per Share HK 49.56 cents HK 46.06 cents +8% Dividends per Share* HK 15 cents HK 15 cents Div
Slide 4: Stable dividend payout ratio
Stable dividend payout ratio 33% 34% 33% 30% 31% 2016 2017 2018 2019 2020 4
Slide 5: RMB exchange rate and 2021 forecast
2019 2020 2021F Average Rate: - 4% Average Rate: - 1% Average Rate: + 5% 7.40 7.20 7.00 Average: RMB 6.6 6.80 6.60 Average: RMB 6.93 6.40 Average: RMB 6.89 6.20 6.00 2019 2020 2021 (Forecast) *Forecast (2021 Mar ~ Dec): RMB 6.60@USD 5
Slide 6: Balance sheet, credit ratings and valuation ratios
31 Dec 31 Dec 17 Mar 31 Dec Items 2020 2019 2021 2019 HK$ Bn HK$ Bn Total assets 42.9 38.2 P/E Ratio 7.0x 11.7x Net asset value 22.6 20.3 P/B Ratio 0.5x 0.8x Cash and Bank 2.3 2.0 Total borrowings 11.5 10.2 Baa1 Credit Ratings: Interest Coverage 7.8x 7.7x BBB+ Net Gearing 28.9% 29.0% 6
Slide 7: Shanghai Gas subscription transaction steps and funding
Transaction Step Funding • Subscription of 25% of enlarged capital of Shanghai Gas by : Bridging loans secured Towngas China • Subscription of 25% of enlarged capital of Towngas China by : Funds returning to Towngas China Shanghai Gas 7
Slide 8: Business Summary
Go Green Every Day 38 22 Bia cb MIRE Business Summary for, ee a
Slide 9: 2020 business highlights
Gas sales rose 8% to 12 billion m3 704,000 new customers 11* new projects with annual gas sales 350 million m3 Net profit rose 11% Dividend per share HK$0.15, to HKD1.447 bn dividend payout ratio 30.8%, with attractive dividend yield ~4% * All project companies 9
Slide 10: ESG governance and reporting
The Board ESG Committee led by CEO and executive directors, ESG Committee reporting to the Board Accreditation and auditing ensure thoroughness and credibility of data Towngas amongst first in the industry to publish CSR report Organised the first National forum on Corporate Social Responsibility
Slide 11: ESG recognition and indices
Constituent of Hang Seng Corporate Sustainability Index Series since 2011 Named ESG Leading Enterprise by Bloomberg Businessweek and Deloitte China Outstanding performance in environmental protection, CSR and corporate governance 11
Slide 12: Project portfolio by type
197 164 City gas Shareholding of 3 listed companies 7 Provincial capitals 29 Key cities 21 Distributed energy 1 Upstream 4 Midstream 7 Engineering and other projects All project companies 12
Slide 13: Listed companies and key cities
3 Listed companies 29 Key cities include: Foran Energy (002911.SZ) 38.67% Guangdong: Foshan, Qingyuan, Shaoguan Chengdu Gas Shandong: Zibo, Taian, Weifang, Weihai (603053.SH) 11.70% Changchun Gas Anhui: Anqing, Maanshan (600333.SH) 28.20% Sichuan: Mianyang Zhejiang: Huzhou 7 Provincial capitals Heil
Slide 14: Operational Performance
38 22 Bia cb IRIS —K Go Green Every Day Operational Performance F abiey RET” te Ree,
Slide 15: Gas sales and customer numbers
Gas Sales Customer 12,003 Mn m3 8% (’000) 2019 2020 Change 11,120 Residential 13,295.5 13,988.6 +693.1 (5.2%) 11% Industrial 8.3 9.4 +1.1 (13.3%) Commercial 134.6 144.5 +9.9 (7.4%) 10,004 Total 13,438.4 14,142.5 +704.1 (5.2%) 2018 2019 2020 15
Slide 16: Gas sales by segment, covered population and penetration
Mn m3 2018 2019 2020 76% 264 2% Distributed Energy System 150 -14% 1,515 13% Commercial 1,763 9% 1,618 2018 2019 2020 Covered Population (Mn people) 70.8 73.9 76.3 7,581 63% Industrial 6,782 6,008 +13% +12% Penetration rate of residential households (%) 53 54 55 2,378 2,425 2,643 22% Residential +2%
Slide 17: Selling price, gas cost and unit opex
Selling Price 2018 2019 2020 (RMB/m3) Unit Opex (RMB/m3) Residential 2.45 2.56 2.59 0.49 Industrial 2.66 2.76 2.46 * 0.43 0.42 0.41 Commercial 3.01 3.22 2.99 * Avg. Selling Price 2.68 2.78 2.56 Avg. Gas Cost 2.09 2.19 1.99 * 2017 2018 2019 2020 Unit Gas Margin 0.59 0.59 0.57 * Due to COVID-19, NDRC
Slide 18: Shanghai Gas 25% stake and operating data
Expect to complete by ① 25% May 2021 25%② 2020 Gas sales volume: 8.9 Bn m³ Customers: 6.4 Mn LNG import volume: 4.3 Mn tonnes (~ 6 Bn m³) Estimated profit RMB 850 Mn (> 30% growth) Expect double digit growth in sales volume & profit in 2021 18
Slide 19: Upstream shale gas supply
Shale gas reserves Secured upstream gas supply of 300 million m3 p.a. Over 400 billion m³ recoverable Liquefaction and storage facilities to be commissioned in 2022 Own gas source for project companies and gas trading 19
Slide 20: Business Strategy and Opportunities
Business Strategy and Opportunities 20
Slide 21: Hebei LNG terminal
LNG terminal invested and built by Hebei JV partner, China Suntien 2 x 200,000 m3 LNG storage tanks invested by HKCG 1 million MT/year right of use of the LNG terminal to be commenced in Q4 2022 21
Slide 22: LNG terminals and group gas procurement savings
6 LNG terminals plus Weiyuan shale gas liquefaction plant PipeChina provides third-party access to facilitate gas trading Tangshan Caofeidian Beijing LNG terminal Jintan gas storage fulfils peak- shaving and storage functions Jintan gas storage Group procurement to reduce cost 2021 2022 2023
Slide 23: Clean heating opportunity
1 In line with the state policy on promoting clean heating Distributed and individual household heating in urban areas 2 Individual household heating in rural areas 3 Target to gain annual gas sales of 4 billion m3 in 3-5 years 23
Slide 24: Online members and Bauhinia products
Online Members million 3.7 2 1.1 2018 2019 2020 Bauhinia RMB million Online Products RMB million 460 470 400 4 1 1 6 34 36 2018 2019 2020 Appliance Floor heating project 炉具签约金额 contract amount 地暖工程签约金额 contract amount 24
Slide 25: Customer base strengths and value-added services
>14 million Additional services with existing customers + regular safety 163 customer centres on 6.4 million customers from inspection home visits top of community centres Shanghai Gas Reaching >47 million Establishing customers every year consumer finance business Strengths Platform content & meal-
Slide 26: Home lifestyle centres and platform content
Replicating home lifestyle centre Enriching platform content • Collaborating with health foods Home • First home lifestyle centre opened User KOLs such as “Day Day Cook” to lifestyle on 12 Dec 2020 viscosity develop core content matrices on healthy fine foods • 2021: To launch 20 home lifestyle cent
Slide 27: Home lifestyle centre rollout and revenue targets
Business Business Business surfacing development maturity 2021 2022-2023 2024-2025 20 outlets transformed in 2021 80 outlets during development stage 200 outlets in maturity stage Progression 10 in east China, 8 in GBA, 2 in other areas 40 in east China, 28 in GBA, 100 in east China, 60 in GBA, 12 i
Slide 28: Smart energy: renewables, power grid and multi-energy
Upstream renewables Power grid Smart energy Photovoltaics (PV) Transmission Energy storage Integrated grid energy Wind Distribution services Power grid Multi-energy supply Power Storage Rooftop PV EV charging stations Offshore wind power 28
Slide 29: Towngas energy projects across 21 provinces
é \~ Rapid Development at Towngas Energy 128 projects across 21 provinces (As at February 2021) © Multi-energy supp ‘@) OT riaoning Beijing-Tianjin-Hebei @ Power sales @ Photovoltaics © Energy storage EV charging stations © & battery bank Integrated energy © services (JV) Greater Bay Area_ Hainan
Slide 30: Conclusion by Chairman
38 22 Bia cb MIRE Go Green Every Day Conclusion by Chairman F abiey RET” te Ree,
Slide 31: 2021 targets and shareholder returns
To ensure an increase in quantity and quality of natural gas sales (Natural gas sales and margin) Annual gas sales volume to achieve double digit growth Unit gas margin remains stable Unit opex to decrease by 1 cent Target to add ~30 projects To continue to create greater return for sharehol
Slide 32: Benefits of the Shanghai Gas investment
Access to a large and quality city-gas market The Group now has a much stronger positioning in Eastern China Market value-added products/services to an addition of 6.4 million households Gained access to Shanghai Gas’ LNG importation facilities Probable IPO of the Shanghai Gas JV 32
Slide 33: Share incentive scheme
• Share Incentive Scheme to be implemented to link with Group performance and business growth KPIs: - Net profit - Gas sales volume - Extended business growth - Smart energy • Group to acquire scheme shares from the market for awarding to senior executives 33
Slide 34: Carbon peak by 2030 and neutrality by 2060
Peak carbon emissions Lush green hills make by 2030 mountains of gold 绿水青山就是金山银山 Attain carbon neutrality by 2060 34
Slide 35: 14th Five-Year Plan guidance
• 14th Five-Year Plan (2021-2025) Guidance Strategy Innovation, coordination, greenness, openness, sharing Domestic and international dual cycle 35
Slide 36: Natural gas as the energy backbone of the future
• As a form of clean energy, natural gas is the energy backbone of the future • PipeChina and third-party entry permitted • Multiple gas source (LNG, Russian gas) and open gas procurement options • Extended business • Cost control: Investment restriction, reduction, and deferment 36
Slide 37: Thank You
Go Green Every Day 38 22 Bia cb IRIS —K Thank You
Slide 38: Forward-looking statements disclaimer
This presentation and subsequent discussion may contain certain forward- looking statements. These forward-looking statements reflect Towngas China’s view on some future events and involve known and unknown risks and uncertainties and other factors which may cause actual performance and development