HONG KONG, CHINA - Media OutReach - 12 April 2019 - Beijing Gas Blue Sky Holdings Limited ("the Company" or "Beijing Gas Blue Sky", together with its subsidiaries, the "Group", HKSE stock code: 6828) is pleased to announce that, Goldlink Capital Limited, a wholly owned subsidiary of the Company, conditionally agreed to acquire the entire issued share capital of Daily Joyous Limited ("Target Company") at a consideration of RMB205,000,000 (equivalent to approximately HK$239,174,000).

 

The Target Company indirectly hold 100% equity interest in Zhejiang Bo Xin Energy Company Limited ("Zhejiang Bo Xin") and 51% equity interest in Guangdong Xin Te Energy Company Limited ("Xin Te").

 

The principal business of Zhejiang Bo Xin included direct supply of liquefied natural gas ("LNG") to industrial users and trading of LNG. It receives stable gas supply from CNOOC's Zhejiang Ningbo LNG terminal and mainly distributes and supplies to large scale industrial users. Zhejiang Bo Xin's major sales network covers Yangtze River Delta region, which is the key LNG consumption area in the PRC with developed local economy and numerous industrial and commercial enterprises. This area has a strong market demand and the LNG consumption is expected to have considerable growth potential in the future. Xin Te is principally engaged in direct supply of LNG to industrial users.

 

For the year ended 31 December 2018, Zhejiang Bo Xin had 68 customers with sales volume of approximately 104,132 tons, whereas Xin Te had 23 customers with sales volume of approximately 14,653 tons. For the year ended 31 December 2017 and 2018, Zhejiang Bo Xin recorded net profit after taxation of approximately RMB13,325,000 and RMB5,583,000 respectively; Xin Te recorded net profit after taxation of approximately RMB1,294,000 and RMB823,000.

 

Upon completion of the Acquisition, Zhejiang Bo Xin will be renamed as Beijing Gas Blus Sky Bo Xin Energy Limited and will be engaged in the development of LNG trading and distribution, direct supply and relevant businesses in eastern China.

 

Mr. Tommy Cheng, Co-Chairman and Executive Director of the Group said that "we believe that the Acquisition demonstrated the Group's strategic layout of full LNG industry chain and replenished the market share and influence of the Group in the midstream and downstream market of the LNG business in the Yangtze River Delta region, enhancing the overall LNG distribution capacity and sales capacity of the Group. It will be easier to achieve economies of scale through increasing the total trade volume, thereby improving the bargaining power of the Group in the upstream market.

 

The Acquisition will help the Group to achieve cooperation in the Yangtze River Delta region with upstream gas suppliers and terminals, coupled with the Group's established distribution advantages in the Beijing-Tianjin-Hebei region and other markets, the Group will achieve its strategic planning of importing gas from overseas sources independently in the future and capture more revenue under the great opportunity of the fast-growing market of imported LNG."

 

In the past two years, the Group was committed to develop LNG business in the PRC, and has preliminarily established its full LNG industrial chain advantage in terms of scale in the country.


In order to implement the Group's market layout strategy of "connecting the south and the north" along the coast, the Group also focuses on the development of the market in the Yangtze River Delta. The Group has established good cooperative relationship with various upstream gas suppliers with a stable gas supply, and has a direct supply business with large scale industrial users, forming a good LNG sales capacity.

 

Meanwhile, the Group also proactively develops overseas gas source and cooperates with strategic investors to ensure a stable supply with favourable gas sourcing price. As of the end of 2018, the business of the Group covers 22 provinces and cities across the country with an end distribution advantage of over 3 million m3 per day in Beijing-Tianjin-Hebei, Pan Bohai Rim and Yangtze River Delta regions.

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