Hong Kong & China Gas Co. Ltd. · HKEX:3
Hong Kong & China Gas — The Hong Kong and China Gas Company — FY2024 Earnings Presentation
48 slides from Hong Kong & China Gas's earnings presentation, Mar 19, 2025
Slide 1: FY2024 Annual Results
The Hong Kong and China Gas Company Limited (0003.HK) FY2024 Annual Results 19 March 2025 The Hong Kong and China Gas | 2024 Annual Results 1
Slide 2: 2024: Overall Operating Environment
2024: Overall Operating Environment Macro Operating Environment Environment Hong Kong tariff increased by 4.8% & Geopolitics affecting supply chains & tariffs Monthly maintenance charge increased by 5.3% Growing gas demand & improving dollar margin on Chinese Sluggish macroeconomy Mainland; Ongoing
Slide 3: 2024 Business Highlights
2024 Business Highlights Bring in partners to Renewable Energy enhance and strengthen Business profits grew 544% all businesses Peter Promote intellectualised & Tariffs successfully digitalised operation; Wong increased in Hong Kong Wai-yee Cost reduction & efficiency and Chinese Mainland improvemen
Slide 4: Utility Business and Growth Business Highlights
Chief Operating Officers Utility Business Don Martin Cheng Hill-kwong Kee Wai-ngai Zhou Heng-xiang • Tariff increased by 4.8%, monthly • Gas sales volume increased by 5%; speed up • Collaborated LTA with “Three Majors” maintenance charge increased by 5.3%, first cost pass-through; diversified gas so
Slide 5: 2024: Overview of Business Operations
2024: Overview of Business Operations Utility Business Growth Business Hong Kong Mainland Renewable Energy Extended Business Green Energy Gas Sales Volume (TJ) Gas Sales Volume (billion m³) Accumulated PV Customer Coverage (million) EcoCeres (million tonnes) 27,159 +0.1% 36.4 +5% Grid-connected (GW)
Slide 6: Agenda
Agenda Financial Highlights P. 7 Business Review Utility Business o Hong Kong Gas Business P. 12 o Mainland Gas Business P. 16 o Mainland Water and Environment P. 24 Growth Business o Renewable Energy P. 26 o Extended Business P. 32 o Green Energy P. 35 ESG P. 43 Group Business Guidance P. 45 Th
Slide 7: Financial Highlights
Financial Highlights The Hong Kong and China Gas | 2024 Annual Results 7
Slide 8: Profit from Operations: 7.5 billion
Profit from Operations Utility Business Growth Business Others Hong Kong Mainland Renewable Extended Green Energy Mainly Eco Energy Business (EcoCeres) 3.97 billion 3.1 billion 0.32 billion 0.47 billion 0.08 billion -0.44 billion (1083: 0.48 billion) -0.7% +5% Profit: +544% +8% -87% Loss reduced by:
Slide 9: 2024 Annual Results
2024 Annual Results (Unit: HK$ million) 2023 2024 Changes (%) Revenue 56,971 55,473 -3 Profit from Operations 7,123 7,499 +5 Corporate Financial Expenses (1,459) (1,544) -6 Core Operating Profit 5,664 5,955 +5 Fair Value Changes 36 49 - Business Restructuring and Impairment (469) (176) - Acquisition
Slide 10: Financial Position
Financial Position (Unit: HK$ billion) 2023 2024 Total Assets 162.0 158.3 Net Assets 71.0 68.3 Cash 9.0 6.4 Borrowings 57.8 57.4 Net Gearing Ratio* 40.7% 42.8% *Note: Net Debt / (Net Debt + Equity） Credit Rating: A- A1 The Hong Kong and China Gas | 2024 Annual Results 10
Slide 11: Capital Expenditure & Efficiency Management
Capital Expenditure & Efficiency Management Capital Expenditure (Unit: HK$ billion) 2023 2024 0003.HK 10.2 6.0 1083.HK 6.6 3.3 Efficiency Management Key Priorities Achievements Cost reduction & • Integrated management, reduced administrative costs and optimised human capital Efficiency improvement •
Slide 12: Utility Business — Hong Kong Gas Business
Utility Business ——Hong Kong Gas Business The Hong Kong and China Gas | 2024 Annual Results 12
Slide 13: Successfully Increased Tariff from August 1, 2024
Successfully Increased Tariff from August 1, 2024 Profit increases by HK$0.36 billion/year 1. Basic Tariff (Unit: HK$/MJ) 2. Monthly Maintenance Charge (Unit: HK$) 10 +0.5 +1.3 cents First adjustment +5.3% in 26 years +4.8% 9.5 The Hong Kong and China Gas | 2024 Annual Results 13
Slide 14: Stable Gas Sales in Hong Kong
Stable Gas Sales in Hong Kong Gas Sales Volume (Unit: TJ) Increase in Gas Sales Volume 27,159 (Unit: TJ) (equivalent to 780 million m³of natural gas) Aviation Catering & +0.1% Industrial Laundry Workshops +107 Industrial 1,833 7% Hotels +66 Tourism- related Commercial 10,889 40% Theme Parks +20 Comm
Slide 15: Value Creation in Tough Time, Seeking Breakthrough in H2 Energy Business
Value Creation in Tough Time, Seeking Breakthrough in H2 Energy Business Established Hydrogen Stable Gas Business Energy Business • Stable gas volume • Collaborating with the HKSAR Government • Northbound consumption trends to promulgate a development blueprint for towards stability green energy • R
Slide 16: Utility Business — Mainland Gas Business
Utility Business ——Mainland Gas Business The Hong Kong and China Gas | 2024 Annual Results 16
Slide 17: Continuous Growth in Gas Volume
Continuous Growth in Gas Volume Gas Sales Volume (Unit: billion m3) • Continuous growth in residential customers drove an +5% increase in gas volume 36.36 34.70 • Promoted “cylinder-to-pipeline” and Gas+ business to increase commercial gas volume 15.93 44% Industrial 15.54 • The “New heating demand
Slide 18: Gas+: Focus on Strategy with Steady Growth
Gas+: Focus on Strategy with Steady Growth Energy Sales Volume Focus on energy management outsourcing services for (Unit: billion kWh) public institutions; and expand asset-light energy services Business 2.21 +29% Strategy 1.71 The state is promoting industrial equipment upgrades, supporting the dev
Slide 19: Steadily Rising Dollar Margin
Steadily Rising Dollar Margin Average Selling Price, Gas Cost and Dollar Margin (Unit: RMB/m3) 2023 2024 Changes • Cost pass-through is basically completed for Residential 2.75 2.82 +0.07 non-residential Selling Commercial 3.56 3.61 +0.05 Price • 75% of the enterprises completed residential cost pas
Slide 20: Connection Business Revenue
Connection Business Revenue The national real estate market remained weak, new connections under pressure The number of household connections decreased YoY • The “cylinder-to-pipeline” for commercial customers (Unit: thousands) and the development of industrial customers have driven an increased in
Slide 21: Long-term Prospects for China's Natural Gas are Highly Promising
Long-term Prospects for China’s Natural Gas are Highly Promising Market Size Expected to Seizing Development Opportunities Expand Continuously • The state encourages natural gas to play an active role in (Unit: billion m3) the development of a new energy ecosystem; with a priority of integrating its
Slide 22: Gas Supply Chain - Assurance of Gas Supply
Gas Supply Chain - Assurance of Gas Supply • Stringent gas supply assurance & cost reduction management are the primary objectives to help sustain business growth and stay competitive Caofeidian • LTA for pipeline gas with a total gas volume of 15 billion m³ collaborating with the “Three Majors” Jin
Slide 23: Gas Supply Chain: Supporting The Expansion of City Gas Distribution
Gas Supply Chain: Supporting The Expansion of City Gas Distribution Steady Growth of Self-coordinating Gas Source Volume (Unit: billion m3) 600 60 Self-coordinating gas source % • Group coordination target: ~50 billion m3 500 50 • 2025: ~6 billion m3 22% 23% • 2030: ~10 billion m3 400 22% 40 22% 22%
Slide 24: Utility Business — Mainland Water & Environment
Utility Business ——Mainland Water & Environment The Hong Kong and China Gas | 2024 Annual Results 24
Slide 25: Steady Growth of Water & Environment Business
Steady Growth of Water & Environment Business Water Net Profit (Unit: billion tonnes) (Unit: RMB million) 1.61 +3% 1.65 Projects Disposal 79 2023 2024 +13% Environment (Solid Waste) (Unit: million tonnes) Operating 415 468 Profit 1.46 +10% 1.61 2023 2024 2023 2024 The Hong Kong and China Gas | 2024
Slide 26: Growth Business — Renewable Energy
Growth Business ——Renewable Energy The Hong Kong and China Gas | 2024 Annual Results 26
Slide 27: Renewable Energy: Profit Growth on Fast-track
Renewable Energy: Profit Growth on Fast-track Operational Data 2023 2024 Changes Grid-connected (GW) 1.8 2.3 +0.5 Power Generation Volume (billion kWh) 0.94 1.83 +95% Gross Margin per kWh (RMB) 0.346 0.294 -0.052 Financial Data (RMB million) BU Profit Contribution 198 589 +197% PV Business Net Profi
Slide 28: Power Generation Volume Doubled
Power Generation Volume Doubled （Unit: billion kWh ） +95% 1.83 Industry-leading grid-connected scale 1 and growth rate The grid-connection completed in 2023 laid down a strong foundation and help 0.94 2 contributing to rapid power generation growth in 2024 Decreased sunlight hours led to a 3 5% decr
Slide 29: Energy & Carbon Management Services: Profit over RMB100 Million
Energy & Carbon Management Services: Profit over RMB100 Million (Unit: RMB million) Electricity trading volume surged to +209% 1 8.4 billion kWh, contributing a profit 102 of RMB77 million Over 400 MWh of C&I energy storage 2 contracts signed, contributing a technical service fee of RMB21 million 33
Slide 30: Successful Issuance of Quasi-REITs
Successful Issuance of Quasi-REITs • Successfully issued the first tranche of RMB515 million with an interest rate of 2.3%, below the Towngas Smart Energy’s average borrowing rate of 3.7% • First quasi-REITs targeting PV and energy storage • The strong market interest was reflected in the program’s
Slide 31: The Renewable Energy Business Offers Immense Growth Potential
The Renewable Energy Business Offers Immense Growth Potential Renewable Energy Becoming Address Challenges & Main Source of Power Generation Seize Opportunities 1. Maintain High Returns through Power Generation Structure Forecast (Unit: trillion kWh) “Cost Reduction & Efficiency Improvement” 20 • Cu
Slide 32: Growth Business — Extended Business
Growth Business ——Extended Business The Hong Kong and China Gas | 2024 Annual Results 32
Slide 33: Restructuring Completed, Focus on Smart Kitchen
Restructuring Completed, Focus on Smart Kitchen Revenue: 4.07 billion Hong Kong Mainland Net Profit: 0.47 billion Revenue: 1.89 billion Revenue: 2.18 billion Net Profit: 0.42 billion +8% Net Profit: 0.05 billion +6% Customer Coverage 2.04 million 42.49 million Customer Services Active Users 0.34 mil
Slide 34: Extended Business: Boost ARPC
Extended Business: Boost ARPC* 2030 Target Revenue: ~HK$8.0 billion Become A Reliable Lifestyle Service Solution Provider *Note: average revenue per customer The Hong Kong and China Gas | 2024 Annual Results 34
Slide 35: Growth Business — Green Energy
Growth Business ——Green Energy The Hong Kong and China Gas | 2024 Annual Results 35
Slide 36: Actively Deploying Supply Chain for "Marine-Land-Air" Green Fuels
Actively Deploying Supply Chain for “Marine-Land-Air” Green Fuels Marine Land Air Green Methanol Hydrogen SAF The Hong Kong and China Gas | 2024 Annual Results 36
Slide 37: Green Methanol Business Strategies
Green Methanol Business Strategies Inner Mongolia’s production plant upgrade to produce green methanol Production Capacity Current • Target production capacity: 0.3 million tonnes (2028) • The leading edge in technology & international certification (currently one of the few entities in mainland to
Slide 38: Green Methanol: Marine Fuel Market Exhibits Enormous Development Prospects
Green Methanol: Marine Fuel Market Exhibits Enormous Development Prospects Green Methanol Will Become The Primary International Marine Transportation Low-carbon Marine Fuel Emissions Reduction is Beneficial to The (Unit: million tonnes) Green Methanol Market The average demand for methanol in the ne
Slide 39: Established Hydrogen Energy Business in Hong Kong
Established Hydrogen Energy Business in Hong Kong Commercialisation of Conversion of Waste Green Construction Site Hydrogen Energy to Hydrogen Sai Kung Hydrogen Fueling Hydrogen-powered construction site Production of Green Hydrogen from Charging Station Pilot Project adopted by customers Biogas Lan
Slide 40: EcoCeres: 2024 Operating Performance
EcoCeres: 2024 Operating Performance The construction progress of the Malaysian plant is on Both production and sales volume have increased track, targeting commissioning by the end of 2025 The proportion of SAF production for the entire year has increased to 60%, amounting to 0.18 million tonnes 20
Slide 41: EcoCeres: 2024 Operating Performance — CEO Mr. Matti Lievonen
EcoCeres: 2024 Operating Performance Mr. Matti Lievonen CEO 2008-2018 NESTE Former President & CEO Led the energy transition of NESTE, a Finnish energy company, and created NESTE’s global markets for SAF & HVO Named by As One of Best 200 CEOs of McKinsey The 21st Century Worldwide Jan 2025 EcoCeres
Slide 42: EcoCeres: Collaboration in Promoting SAF Development in HK
EcoCeres: Collaboration in Promoting SAF Development in HK HSBC, Cathay Pacific, and EcoCeres have reached a significant collaboration Carbon Reduction Solution Provider: to promote SAF in Hong Kong EcoCeres Promote SAF Development in HK SAF Green SAF User: Value Customer: Cathay Pacific HSBC The Ho
Slide 43: ESG
ESG The Hong Kong and China Gas | 2024 Annual Results 43
Slide 44: 2024: ESG Performance
2024: ESG Performance Industry Award ESG Rating • HKCG (stock code: 0003) is one of the longest-standing • HKCG attained the highest score among Chinese HSI constituents and has been awarded the “55 Years in Hang Seng Index Award” enterprises in the gas industry in the S&P Global Corporate Sustainab
Slide 45: Group Business Guidance
Group Business Guidance The Hong Kong and China Gas | 2024 Annual Results 45
Slide 46: 2025 Business Guidance
2025 Business Guidance Utility Business Growth Business Hong Kong Mainland Renewable Energy Extended Business Green Energy Gas Sales Volume (TJ) Gas Sales Volume (billion m³) Accumulated PV Customer Coverage (million) EcoCeres (million tonnes) Remains Grid-connected (GW) Production Volume: 0.30 27,2
Slide 47: Thank You
THANK YOU Fine isS—K Go Green Every Day
Slide 48: Disclaimer
Disclaimer This presentation and corresponding discussion may contain certain forward-looking statements, including statements regarding our intent, belief or current expectations with respect to The Hong Kong and China Gas’s businesses and operations, market conditions, results of operation and fin
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