#120 1997-2017 享受成长 中國天倫燃氣控股有限公司 CHINA TIANLUN GAS HOLDINGS LIMITED (HKEx Stock Code:1600) 2018 Interim Results Company Presentation August 2018 天伦燃气 TIANLUN GAS CNG ER 天機气#2Disclaimer The information and opinions carried by this document is not for the purpose of comprehensive research, financial services or legal opinion. China Tian Lun Gas Holdings. Limited does not guarantee its accuracy and integrity. This document contains the information that is only to provide reference. They cannot be sold, be bought, or be subscribed for securities or other part for the invitation. This document contains information and opinion that can only reflect China Tian Lun Gas Holdings Limited's opinion on the date of the presentation. China Tian Lun Gas Holdings Limited can change anything on this document without notices. China Tian Lun Gas Holdings Limited will not be liable on any loss which is caused by the information, opinion in this document. 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Results Highlights#520 1997-2017 享受成长 天伦燃气 Rapid Growth in All Segments in 2018H1 TIANLUN GAS Results Highlights 2017H1 2018H1 YOY Gas Sales Volume (mn m³) 501 605 20.7% • C&I Gas 271 348 27.4% Residential Gas 83 123 48.2% Number of newly connected users 96,530 135,138 40.0% Operation Highlights . Newly Connected Residential Users 95,691 134,077 40.1% Newly Connected C&I Users 839 1,061 26.5% Number of accumulated users 1,430,829 1,796,858 25.6% Revenue (RMB mn) 1,490 1,899 27.4% Gas Sales Revenue 1,163 1,453 25.0% Earning Highlights Connection Revenue 298 399 33.6% Gross Profit (RMB mn) 379 498 31.3% Adjusted Profit Attributable to 187 253 34.9% Shareholders *(RMB mn) * Excluding gains/losses of cross currency swap contracts and exchange. Interim dividends of RMB 5.36 cents/share, with a payout ratio of 25%. 5#6II. Business Review#7158 Projects in 16 Provinces Across the Country 天伦燃气 TIANLUN GAS Obtained new concession rights in Wugang City in 2018H1. Tian Lun Gas has 58 city gas projects in 6 major regions; 51 gas stations in operation; 2 LNG plant projects; and 6 long-haul pipelines. RC 1997-2017 享受成长 Northwest Region city gas projects: 7 gas stations: 8 Southwest Region city gas projects: 13 gas stations: 6 LNG plant project: 1 內蒙古 黑龙江 Northeast Region Northeast Region city gas projects: 10 gas stations: 16 LNG plant project: 1 North Henan Region Northwest Region North Henan Region city gas projects: 8 gas stations: 8 South China Region Southwest Region city gas projects: 5 Long-haul Pipeline Division ◆ Long-haul pipelines: 6 South Henan Region 江西 South Region South Henan Region city gas projects: 15 gas stations: 13 7#8天伦燃气 Focusing on Regions with Fast Growth in Gas Consumption, including 18 Projects in "2+38" Cities 20 1997-2017 享受成长 Gansu Baiyin Gulang Shaanxi Qianxian* Liquan* Mizhi Wubu Yunnan Huize Yanshan Gejiu Guangnan Ludian Hekou Shandong Heze* Caoxian* Shanxian* Dongming* Sichuan Xindu, Chengdu Jintang, Chengdu Guangdong Longhu, Chaohzou Shaonnou Fuyang, Chaozhou Dongfeng, Chaozhou Chenghai, Shantou Lechang Henan Jiangsu Hebi* Suzhou Shilin, Hebi✶ Heqi, Hebi* Jilin Xuchang Xuchang New District Dunhua 内蒙古 Shangjie, Zhengzhou* Panshi Puyang High Tech Da'an District* Jiutai Minquan, Shangqiu 河北 Tongyu Yucheng, Shangqiu Zhenlai Song, Luoyang* Nongan 陕西 Xinye, Nanyang* Yitong 四川 湖北 Lankao, Kaifeng* Changchun Airport Weishi, Kaifeng* Zone 贵州 湖南江西 Qian'an 「福建 Chaoyang, Shantou 云南2 Weibei Food Industrial Park* 2 广西 Xinwei Industrial Park* Fujian Weishi Airport New Sanming District* Xichuan, Nanyang Hunan Baofeng, Pingdingshan Gas Stations: 51 LNG Plant Projects: 2 Long-Haul Pipelines: 6 (including 3 under construction) Ye County, Pingdingshan Wugang, Pingdingshan Guangxi Dongkou Fenghuang City Gas Projects: 58 * Projects in "2+38"Cities Luzhai Guanyang 8#9TIANLUN GAS Strong Growth in Gas Sales with Improving Mix ('000 m³) 2017H1 2018H1 YOY 1. C&I 263,015 336,211 27.8% 2. Residential 82,683 122,534 48.2% 3. Other Users 155,515 146,241 -6.0% Total Gas Sales Volume 501,213 604,986 20.7% 5. Long-haul Pipline Gas 394,496 419,911 6.4% Transmission Volume Total 895,709 1,024,897 14.4% Gas Sales Volume Breakdown in 2017H1 Other Users, 31.0% C&I, 52.5% Resident ial, 16.5% Gas Sales Volume Breakdown in 2018H1 Improving Mix Other Users, 24.1% Residential, 20.3% C&I, 55.6% 20 1997-2017 享受成长 9#1020 天伦燃气 Fast Growth in Both C&l and Residential Sales Volume, *** TIANLUN GAS Gas Sales Volume to C&I Users '000 m³ 400,000 + 27.8% 350,000 336,211 300,000 263,015 250,000 200,000 150,000 100,000 50,000 2017H1 2018H1 Gas Sales Volume to Residential Users '000 m³ 140,000 110,000 82,683 80,000 +48.2% 122,534 50,000 2017H1 2018H1 Benefiting from C&I coal-to-gas conversion, strong 3rd/4th-tier cities presence, as well as the Company's efforts to quickly develop C&I users, sales volume to C&I users recorded continuous rapid growth of 27.8% YoY in 1H2018. Benefiting from increasing penetration rate and contribution by newly acquired projects, sales volume to residential users increased by 48.2% YoY in 1H2018. 10#11天伦燃气 Newly Connected Users Increased Rapidly TIANLUN GAS (households) 2017H1 2018H1 YOY Number of newly connected 96,530 135,138 40.0% users Residential households 95,691 134,077 40.1% C&I users 839 1,061 26.5% Number of accumulated 1,430,829 1,796,858 25.6% users Residential households 1,421,073 1,780,362 25.3% C&I users 9,756 16,496 69.1% Accumulated C&I Users '000 households C&I Users' Designed Daily Capacity 20,000 '0000 m³/day 16,000 + 69.1 % 800 16,496 + 38.3 % 726 600 12,000 525 9,756 8,000 400 4,000 200 0 2017H1 0 2018H1 2017H1 2018H1 11 20 1997-2017 享受成长#12天伦燃气 Strong Momentum of Value-Added Services TIANLUN GAS Promote bellows, alarms and other equipment to new and existing users, and improve gas safety awareness 20 1997-2017 享受成长 ✓ Cooperate with China Insurance and Ping An Gas Insurance to sell civil and Modification and related commercial products insurance maintenance insurance Gas appliance sales ✓ Cooperate with leading domestic gas appliance manufacturers to provide high quality appliances to value-added customers 12#13III. Financial Performance 13#14AE Rapid Growth in Revenue and Earnings 天伦燃气 TIANLUN GAS 2017H1 2018H1 YOY '000 RMB '000 RMB Revenue 1,490,353 1,899,344 27.4% • Gas Sales 1,162,742 1,452,854 25.0% • Connection 298,197 398,471 33.6% Others 29,415 48,018 63.2% Sales Proceeds 1,683,497 1,991,171 18.3% Gross Profit 379,064 497,844 31.3% Gas Sales 162,881 206,374 26.7% Connection 199,656 260,715 30.6% Others 16,527 30,755 86.1% EBITDA 433,909 570,104 31.4% Profit for the Year 196,906 226,881 15.2% Profit Attributable to 186,815 215,307 15.3% Shareholders Adjusted Profit Attributable 187,245 252,514 34.9% to Shareholders * * Excluding gains/losses of cross currency swap contracts and exchange. RC 1997-2017 享受成长 14#15天伦燃气 TIANLUN GAS Strong Growth in Gas Sales and Connection Revenue, 2 Value-add Services Become a New Growth Driver Revenue Breakdown in 2017H1 Revenue Breakdown in 2018H1 1997-2017 享受成长 Others, 2.0% Connection, 20.0% Gas Sales, 78.0% '000 RMB Gas Sale Revenue + 25.0% 1,452,854 1,600,000 1,400,000 1,162,742 1,200,000 1,000,000 800,000 600,000 400,000 200,000 2017H1 2018H1 Connection Revenue Others , 2.5% Connection , 21.0% Gas Sales, 76.5% Other Revenue + 63.2% '000 RMB 450,000 + 33.6% '000 RMB 398,471 60,000 400,000 350,000 50,000 298,197 300,000 40,000 250,000 29,415 200,000 30,000 150,000 20,000 100,000 50,000 10,000 2017H1 2018H1 48,018 2017H1 2018H1 15#16C&I & Residential Gas Sales Revenue Ramped Up TIANLUN GAS Rapidly Gas Sales Revenue Breakdown in 2017H1 '000 RMB 900,000 Other Users, 28.2% C&I, 52.8% Residential, 16.0% C&I Gas Sales Revenue + 30.8% 800,000 700,000 624,388 600,000 500,000 400,000 300,000 200,000 100,000 Gas Sales Revenue Breakdown in 2018H1 Other Users, 24.4% Residential , 18.3% C&I, 56.1% Residential Gas Sales Revenue + 46.3% 265,461 '000 RMB 300,000 815,682 240,000 181,507 180,000 120,000 60,000 2017H1 2018H1 2017H1 2018H1 16 RC 1997-2017 享受成长#17TIANLUN GAS Profit Margin Rises Steadily Gross Margin 30.0% 25.4% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 2017H1 Gross Margin of Gas Sales 26.2% 18.0% 14.0% 15.0% 12.0% 9.0% 6.0% 3.0% 0.0% 2018H1 2017H1 Gross Margin of Connection Adjusted Net Margin 14.2% 2018H1 RC 1997-2017 享受成长 75.0% 67.0% 16.0% 65.4% 14.0% 13.1% 60.0% 12.0% 45.0% 8.0% 30.0% 4.0% 15.0% 0.0% 0.0% 2017H1 2018H1 2017H1 2018H1 17#18天伦燃气 Solid Balance Sheet TIANLUN GAS 30 Jun 2017 '000 RMB 30 Jun 2018 '000 RMB 10,068,115 Total Assets 8,107,171 Total Equity 2,949,812 3,329,948 Total Liabilities 5,157,359 6,738,167 Total Liabilities 63.6% 66.9% /Total Assets Cash Balance 700,976 1,820,537 Total Borrowings 3,834,418 5,222,166 Domestic Borrowings 1,638,314 2,625,309 % of Total 42.7% 50.3% Overseas Borrowings 2,196,104 2,596,857 % of Total 57.3% 49.7% Total No. of Issued 989,615 989,615 Shares ('000 shares) RC 1997-2017 享受成长 18#19IV. Strategies & Outlook 19#20天伦燃气 TIANLUN GAS Implement Coal-to-Gas Conversion Strategy RC 1997-2017 享受成长 2018-2020 and ■ Focus on the short-term medium-term strategy of coal-to-gas conversion in Henan province. Realize the business collaboration in Henan province and promote the integration of large Henan module. Take the opportunity of coal to gas conversion and combine the current situation of township coal-to-gas in Henan, adopt the quasi-merger and acquisition strategy to improve the expansion speed and quality Take the coal-to-gas conversion in Henan province as a sample and replicate in other provinces and cities across the country 5-Year Strategy ■Integrate High-Quality Talents ■Integrate High-Quality Projects ■Integrate High-Quality Capital 20 20#21天伦燃气 TIANLUN GAS Business Model: Integration of Upstream and Downstream of Gas Enterprises 1997-2017 享受成长 With the gradual opening of the country's policy on upstream gas, more downstream gas enterprises. will enter into the upstream gas development, realise the combination of commodity and market optimization, and optimise allocation of market resources Upstream Gas Development Conventional Midstream Gas Transportation Downstream Gas Distribution Vehicle Transportation Gas Domestic Gas LNG Industrial Fuel Unconventional Gas CNG City Gas Pipeline LNG Terminal LNG Import Transportation Pipeline Gas Import Network City Pipeline Electricity Generation Chemical Industry#22天伦燃气 Talent Model: Cooperate and Develop Together TIANLUN GAS 01 RC 1997-2017 享受成长 Promote the partnership mechanism to stimulate the creativity of management and employees 02 Develop the mechanism for dividend sharing Build Platform Introduce Talents 03 Promote the development of platform to realize complementary advantages 04 Listed company uses shares and options to motivate employees#23天伦燃气 Introducing Government Subsidies and Policy-based Loans TIANLUN GAS to the Market through Collaboration with Governmental Financing Platform SZ Yuzi Holding Government support and resources synergy are essential in order to speed up township coal- to-gas conversion projects in Henan. ■ As an investment and financing company under Henan provincial government, Yuzi Holding is mainly engaged in infrastructure projects such as old reconstruction, targeted poverty alleviation, beautiful countryside, etc. city ■ Yuzi Holding plays an important role in getting government subsidies and policy-based loans. 天伦燃气 TIANLUN GAS Tian Lun Gas was founded in Henan, with professional operation experiences and rich resources. The two partners have complementary advantages their cooperation. ■ Tian Lun Gas is responsible for construction and operation of projects. 20 1997-2017 享受成长 23 23#24Specialized Fund Supported by Long-term Loan from Policy Banks to Invest in Coal-to-Gas Conversion RC 1997-2017 享受成长 天伦燃气 TIANLUN GAS Project company ■Yuzi Holding and Tian Lun Gas jointly established a township coal- to-gas conversion investment fund of RMB 10 billion, with the first phase of RMB 1 billion has been funded. (60%: 40%) ■ Under the fund, an investment holding company is responsible for investing in coal-to-gas conversion projects. ■ The coal-to-gas conversion investment fund will provide start- up funds for the investment holding company to implement coal-to-gas conversion projects. ■ Policy banks and financial institutions will provide investment holding company with long-term (15 years, 1:4) policy financing support. Project company Yuzi Holding Tian Lun Gas 60% 40% Township Coal-to-gas Conversion Investment Fund Investment Holding Company Project company Project company Project company 24 24#251E10 Million Township Households to Convert in 5 Years TIANLUN GAS RC 1997-2017 享受成长 Number of Construction (10,000 households) 400 350 350 300 270 250 200 200 150 120 100 60 50 0 2018 2019 2020 2021 2022 Increase the Support of Gas Supply Strengthen gas exploration at the national policy level Gas Supply Explore new model of "market- oriented gas sources coordination" Open LNG terminals and introduce more gas enterprises Inter-connect of pipeline networks and coordinated gas supply 55 25#26天伦燃气 1E2020 Vision Strategic Planning (Brief Analysis) TIANLUN GAS Cooperate and Develop Together 天伦燃气 TIANLUN GAS 20 1997-2017 享受成长 Share and Win Together Investors trust the efforts of management and employees through unique vision to earn shareholder- related interests. Through this platform, management can fully exploit customer's potential and earn commissions. Employees earn considerable income through piece work, more pay for more work. Ensure large number of suppliers to earn relevant benefits through a stable customer platform. 天伦燃 ANLUN 112 uayi Employee Benefit Supplier Benefit Management Benefit Investor Benefit Customer Benefit { Only if each benefit party get the satisfaction of relevant interests, the whole new business chain will be bigger and bigger, and will support Tian Lun's main business development. Customers get satisfactory and security products through quality-assured service, 26#27Investor Relations Contact: [email protected] Hong Kong: (852) 3470 9069 Mainland: (86) 371-6370 7151 中國天倫燃氣控股有限公司 CHINA TIANLUN GAS HOLDINGS LIMITED (HKEx Stock Code:1600) Focusing on Gas Utilization Entering Rapid Growth Phase 27