China Resources Gas Group Limited: history, ownership, mission, how it works & makes money

A Brief History of China Resources Gas Group Limited

China Resources Gas Group Limited (CR Gas) was founded in 2003 and is a leading player in the gas distribution sector in China. Its primary business includes the distribution of natural gas, as well as providing solutions for gas utilization.

The company operates under the larger umbrella of China Resources (Holdings) Company Limited, which has a diversified portfolio in various sectors including retail, energy, and real estate.

In the early years, CR Gas expanded its operations rapidly, securing a number of city gas projects across various regions of China. By 2015, CR Gas had established a strong presence by providing piped natural gas to approximately 35 million users, with a focus on urban and residential markets.

As of 2022, CR Gas was reported to have undertaken over 200 gas projects, with a distribution network that extends to more than 1,200 kilometers of pipelines throughout various provinces in China.

In terms of stock performance, CR Gas was listed on the Hong Kong Stock Exchange in 2007 under the ticker 1193.HK. The company's stock has seen notable growth over the years, particularly post-2020. For instance, in 2021, the share price reached a peak of HKD 35, reflecting a significant increase from previous years.

CR Gas has continued to prioritize the expansion of its infrastructure to boost its market share. In 2021, the company announced plans to invest approximately CNY 4 billion in building new gas pipelines and enhancing its distribution capacity.

As of 2023, market analysts reported that CR Gas holds approximately 18% of China's urban gas distribution market, positioning itself as a key player amidst increasing competition in the sector.

Recent developments include partnerships with several local governments to enhance the city gas supply infrastructure, and initiatives aimed at increasing the use of natural gas over coal, aligning with China's environmental policies.

A Who Owns China Resources Gas Group Limited

China Resources Gas Group Limited (CR Gas) is a leading player in China's gas distribution sector. The ownership structure of CR Gas is predominantly characterized by significant stakes held by state-owned enterprises and institutional investors.

The major shareholder is China Resources (Holdings) Company Limited, which is a state-owned enterprise under the direct supervision of the State-owned Assets Supervision and Administration Commission of the State Council of China (SASAC). As of the latest data, China Resources (Holdings) owns approximately 58.57% of the issued share capital of CR Gas.

In addition to the major shareholder, there are other institutional investors that hold substantial stakes in the company, including:

• BlackRock, Inc. – Approximately 5.25%
• China Life Insurance Company – Approximately 3.19%
• HSBC Holdings PLC – Approximately 2.50%

CR Gas operates under a complex corporate structure that includes numerous subsidiaries focused on different aspects of gas distribution and related services. The company's financial performance has been solid, reflecting its robust ownership backing.

As of the most recent financial reports for the first half of 2023, CR Gas reported revenue of HKD 15.34 billion, reflecting a year-on-year increase of 8.6%. The net profit attributable to shareholders stood at HKD 1.88 billion, with earnings per share (EPS) of HKD 0.83.

Overall, the ownership of China Resources Gas Group Limited illustrates a strong commitment from significant state-owned entities, alongside support from institutional investors, thereby providing a solid foundation for its operations and growth in the competitive gas distribution market.

China Resources Gas Group Limited Mission Statement

China Resources Gas Group Limited (CR Gas) positions itself as a leading player in the energy sector, primarily focusing on natural gas distribution and sales. The company’s mission is to deliver high-quality energy solutions and enhance customer satisfaction while promoting sustainable development and environmental protection. This commitment is reflected in its operational strategies and business objectives.

CR Gas aims to continuously improve energy efficiency and safety standards, establishing a comprehensive gas supply network across various regions in China. The company emphasizes innovation and technology to streamline operations and expand its market reach.

As of the latest financial report for the year ending December 31, 2022, the company reported revenue of approximately RMB 37.3 billion, representing a year-on-year growth of 12.8%.

In 2022, CR Gas added approximately 2.7 million new residential customers, bringing the total customer base to around 20 million. This expansion highlights the company's commitment to increasing accessibility to clean energy solutions.

In line with its mission, CR Gas has also focused on enhancing its natural gas infrastructure. As of Q2 2023, the company operated over 14,500 kilometers of pipelines, supporting both urban and rural areas. CR Gas’ strategic investments in expanding pipeline networks aim to meet the growing demand for natural gas in China.

Key Financial Metrics

The company’s commitment to sustainability is also evident in its corporate social responsibility initiatives, which include programs aimed at reducing carbon emissions and promoting green energy solutions. CR Gas plans to invest approximately RMB 3 billion in green projects over the next three years.

In addition to expanding its customer base and enhancing infrastructure, CR Gas is actively involved in technological innovations such as smart metering systems and digital platforms that improve service efficiency. These initiatives support its mission to create a sustainable and environmentally friendly energy ecosystem.

How China Resources Gas Group Limited Works

China Resources Gas Group Limited is a leading integrated energy service provider in China, primarily involved in the distribution of city gas and the provision of related services. As of the end of 2022, the company served approximately 33 million residential users and 100,000 industrial users across over 280 cities in China.

The company generates its revenue through several segments, including gas distribution, construction of pipeline networks, and sales of gas appliances. In the fiscal year 2022, China Resources Gas achieved a total revenue of approximately CNY 82.48 billion, a 15.2% year-on-year increase.

China Resources Gas operates through its subsidiaries in various regions, focusing on expanding its natural gas pipeline infrastructure. The company owns and operates approximately 53,400 km of pipelines as of December 2022, which facilitates the distribution of natural gas to urban and industrial customers.

The energy sector in China has been witnessing significant growth, spurred by the government’s focus on promoting cleaner energy sources. The demand for natural gas is projected to increase, supported by national policies aimed at reducing carbon emissions. According to the National Energy Administration (NEA), natural gas consumption in China is expected to reach 500 billion cubic meters by 2030, growing at a compound annual growth rate (CAGR) of approximately 7.5%.

In terms of operational efficiency, China Resources Gas has been investing in smart gas management systems to enhance service delivery. In 2022, the company reported a 12% reduction in operational costs, attributed to the implementation of advanced technologies in its operations.

Moreover, the company is also involved in LNG (Liquefied Natural Gas) import operations, strengthening its supply chain. As of 2022, it secured imports of around 5 million tons of LNG, accounting for a significant portion of its gas supply mix.

China Resources Gas Group Limited continues to expand its footprint in the renewable energy sector, targeting a 20% contribution from renewable energy sources to its overall energy mix by 2025. Investments in solar and wind projects have been initiated to align with government sustainability goals.

As of September 2023, the company’s stock was trading at approximately HKD 39.10, reflecting a market capitalization of around HKD 45 billion. The company has maintained a dividend payout ratio of roughly 30%, appealing to income-focused investors.

How China Resources Gas Group Limited Makes Money

China Resources Gas Group Limited (CR Gas) operates primarily in the natural gas distribution sector in China. The company generates revenue through multiple streams, including pipeline transportation, sales of natural gas, and other energy-related services.

For the fiscal year 2022, CR Gas reported a total revenue of approximately RMB 85.24 billion (around USD 12.03 billion), reflecting a growth of 18.6% year-on-year, driven by increased natural gas consumption across residential and industrial sectors.

The company operates gas distribution networks that cover around 218 cities in China, supplying over 9.6 million residential customers and over 80,000 industrial customers.

In the first half of 2023, CR Gas recorded a net profit of around RMB 3.1 billion (approximately USD 439 million), with earnings per share (EPS) reported at RMB 1.24. This represented an increase of 12.4% compared to the same period in the previous year.

CR Gas's revenue growth is significantly supported by China’s push for cleaner energy sources, resulting in a shift from coal to natural gas. The company aims to further enhance its market presence by expanding into new regions and upgrading existing infrastructure.

The average selling price of natural gas for CR Gas in 2022 was approximately RMB 3.5 per cubic meter, showing a steady increase attributed to rising demand across both urban and rural markets.

In terms of operational efficiency, the company managed a gross margin of approximately 25% in 2022, which is consistent with industry standards. Operational costs have been effectively controlled, allowing CR Gas to maintain a solid profit margin despite fluctuating energy prices.

CR Gas has also invested in diversified energy projects, including liquefied natural gas (LNG) terminals and renewable energy initiatives, contributing to its long-term growth strategy. In 2022, investments in these areas accounted for approximately RMB 8 billion.

As of mid-2023, CR Gas has secured substantial financing arrangements, with total borrowings approximated at RMB 50 billion. The company maintains a debt-to-equity ratio of about 1.2, ensuring a balance between leveraging growth and maintaining financial stability.