Chairman’s Statement


2021 is the first year of the “14th Five-Year Plan”, and the year of launching the “carbon peak by 2030 and carbon neutrality by 2060” initiative proposed by China. As more COVID-19 vaccine inoculations roll out, global economy will gradually recover. China has also been constructing a new “dual circulation” development pattern, under which the domestic macro-economy has begun to rebound in view of the improved external demand and expanded domestic demand. As one of the major energy sources in China, natural gas has maintained steady growth by virtue of the recovery of both investment and consumption. As to policies, the market-oriented reform of the natural gas industry has been further promoted, which embraced new opportunities for industry development as well as challenges.

Over the past year, National Oil and Gas Pipeline Network Company commenced operations and initiated the gas supplier licensing system. Many large LNG receiving stations along the coast have begun to open up to third parties. A critical step has been taken in the market-oriented and diversified reform of the domestic natural gas industry, which also brought opportunities for city gas operators to integrate gas sources, safeguard the gas supply, and reduce energy costs for customers. Along with the integration of the pipeline network and gas resources, as well as the interconnection of the major pipeline networks at a faster pace, we can foresee that city gas and other terminal projects will play a more prominent role in the natural gas industry chain. In addition, the “14th Five-Year Plan” and the “No. 1 Document” of the CPC also proposed the “gas-powered villages” policy, which opened up a new business model and journey for the development of the city gas industry. On 21 February 2021, Smart MicroGrid, pioneered and promoted by China Gas, has gained the attention and recognition of the State and policy makers. The CPC released the “No. 1 Document” in 2021, which proposed “to promote the use of gas in rural areas, and to support the construction of safe and reliable gas storage tank stations and MicroGrid gas supply systems in rural areas”, providing strong policy support for the development of our Smart MicroGrid business. In future, leveraging the superior national environmental protection and industrial policies, the Group will make good use of its own market and management advantages and stick to its “value chain extension” strategy, so as to keep up with the development trend in spite of difficulties. Making consistent efforts of cost reduction and efficiency enhancement, changes and development, as well as exploration of potential in the “replacement of coal with gas” market nationwide and expansion of the township gas market, we will push forward our three major new businesses, namely Smart MicroGrid, Urban Heating, and value-added services. We will promote our energy technology innovation in a continuous way, and strive on our digital transformation strategy so as to develop a comprehensive plan to put our “Cloud China Gas, Digital China Gas, Smart China Gas” initiative into action. Taking our city gas business as the foundation, we will focus on the development trend of the high-tech industries, and achieve digital transformation by means of big data, artificial intelligence and Industrial Internet of Things, in order to play a positive role in facilitating green energy development.

Over the past year, China Gas strove ahead and delivered exceptional operating and financial performance. Being admitted into the Hang Seng Shanghai-Shenzhen-Hong Kong (Selected Corporations) 300 Index, the Hang Seng ESG 50 Index and the Hang Seng Corporate Sustainability Benchmark Index, our ESG rating was upgraded to BBB by MSCI. In light of the long-term vision towards carbon peaking and carbon neutrality proposed by the central government, the Group believes that the optimization of energy structure and the promotion of environmental protection and air pollution control policies will be further implemented in China, further highlighting the role of natural gas and LPG industries in the national energy system.

Looking forward to the new financial year, the Group will enter a new stage of development and step on a new historical starting point. Riding on the national preferential policies for accelerating reform and innovation and developing clean energy, we will make intensive effort into our corporate social responsibility management. We will pull out all the stops to create values for our shareholders, customers, employees, partners and social stakeholders, while improving our core competitiveness and sustainable development capabilities. We strive to become a world’s leading urban integrated energy service provider which attains green and sustainable development, so as to celebrate the 20th anniversary of the Group with our outstanding performance.

 

Mr. LIU Ming Hui

Chairman, Managing Director and President