Symbol

ENN ENERGY(02688) Company Profile

		Company Profile
	Stock Name	ENN Energy
	Listing Date	2002-06-03
	Sector	Utilities
	Chairman	WANG Yusuo
	Par Value	0.1
	Total Issued Capital	1.131B
	Market Cap	72.003B
	Principal Activities The Group is principally engaged in investing in, constructing, operating, and managing gas pipeline infrastructure, as well as the sales and distribution of piped gas, LNG and other multi-energy products. The Group also provides commercial & industrial customers with intelligent services related to low-carbon integrated solutions and has developed diversified value added business meeting the needs of residential customers. Latest Results The Group's profit attributable to shareholders for the year ended 31-12-2024 amounted to RMB 5.99 billion, a decrease of 12.2% compared with previous corresponding period. Basic earnings per share was RMB 5.35. A dividend of HKD 2.35 per share was declared. Turnover amounted to RMB 109.85 billion, a decrease of 3.5% over the same period last year, gross profit margin down 0.4% to 12.2%. (Announcement Date: 26 Mar 2025) Business Review - For the year ended December 31, 2024 In 2024, amidst multiple challenges such as increasing uncertainties in the international situation, frequent extreme weather events, and insufficient effective demand, China’s GDP growth reached 5%. In response to opportunities presented by the evolving macro environment, industry transformations, and diverse customer demands, we proactively upgraded our strategy, leveraging intelligent innovations to transition into a multi- value service provider anchored in natural gas. Through a steadfast focus on customer-centricity and intelligent innovation, the Group continuously strengthened safety foundation and enhanced customer satisfaction to drive business upgrades, thereby achieving sustained growth in 2024. Natural Gas Sales Business: Focusing on Customer Demand to Achieve Scale-Driven Profits, Laying a Solid Foundation for the Natural Gas Sales Business In 2024, the implementation of policies such as the Measures for the Administration of Infrastructure and Public Utilities and the Natural Gas Utilisation Policy further propelled the sustained and healthy development of China’s natural gas industry. With the accelerated integration of domestic and international natural gas resources, coupled with heightened market volatility risks, customers’demand for cost efficiency and supply stability has amplified. The Group adheres to a customer-centric approach, expanding its customer base through customer segmentation, lean resource allocation, and intelligent operations, as well as growing profit through sales volume to achieve economies of scale and mutual success with customers. Industry is a major player in energy consumption and carbon emissions, and natural gas plays a critical role in substituting high-carbon energy sources with low-carbon energy sources. We tailored models based on customer profiling, analysing their industries, production processes, energy consumption patterns, and alternative energy options. By leveraging IoT devices, we promptly monitored energy usage and developed a flexible strategy, customising strategies tailored to each enterprise. In 2024, we installed gas appliances with a total daily designed capacity of 12.17 million cubic meters for industrial customers, reaching a cumulative total daily designed capacity of 185 million cubic meters, driving a 5.2% year-on-year growth in industrial gas sales. Within the concessionary area, we capitalised on the government’s“bottled-to-piped-gas conversion”policy;and launched a specialised campaign by using optimised designs, flat-rate pricing, and block-based cluster development to develop 25,000 new commercial customers, bringing the cumulative total to 227,000 commercial customers, with installed gas appliances achieving a total daily designed capacity of 2.93 million cubic meters, thereby bringing the cumulative daily capacity to 31 million cubic meters. This drove a 4.5% year-on-year growth in commercial gas sales. In 2024, we actively responded to downward pressures in the real estate market, and deepened efforts to develop existing households, thereby completing the installation of gas supply facilities for 1,617 thousand households. The cumulative number of household customers reached 31.38 million, significantly strengthening the foundation for value added business. Meanwhile, we proactively advanced adjustments for residential gas prices. By the end of 2024, we had cumulatively adjusted gas price for 63% of the household customers to market rates. The extensive customer base and substantial gas consumption scale of the Group have created opportunities to optimise spatiotemporal resource allocation, and have enabled the Group to unlock operational economies of scale. In 2024, driven by customer demand, we continuously increased contract volumes with the three major oil companies in China, improved the long-term agreement resources with China National Petroleum Corporation and strengthened the security of self-sourced overseas resources. By synergising domestic and international resources, we effectively reduced procurement costs. Concurrently, we leveraged professional teams to implement hedging strategies, mitigating price volatility and ensuring long-term price stability for customers. In 2024, the Group achieved a 4.2% year-on-year increase in natural gas sales volume, with revenue and gross profit rising 0.2% and 2.9% to RMB60,749 million and RMB6,225 million, respectively. With the decline in international natural gas prices, the Company primarily focused on the domestic market, with the revenue and gross profit of wholesale of gas business decreasing by 15.3% and 91.4% to RMB25,143 million and RMB94 million, respectively. The construction and installation business continued to be under pressure from the downturn in the real estate sector, with revenue and gross profit declining 23.3% and 31.6% year-on-year to RMB4,095 million and RMB1,895 million, respectively. Integrated Energy Business: Implementing Integrated Energy Concept to Promote the Steady Growth of Integrated Energy Business With the implementation of China’s dual-carbon strategy, declining costs of photovoltaic (PV) and energy storage equipment, and advancements in intelligent technologies, customers’demand for green solutions, efficiency improvements, and cost reductions has grown rapidly. Building on years of accumulated expertise, we leveraged intelligent systems to refine best practices and deployed integrated energy solutions tailored to major energy-intensive customers. In 2024, we expanded our customer base across industrial parks, factories, and public infrastructure sectors, leveraging delivery intelligence and operational intelligence to enhance project execution efficiency and optimise operational performance. Building upon our existing base of 270,000 Commercial and Industrial (C/I) customers and a broader accessible customer network, we adopted a customer-centric approach, leveraging simulation-based intelligence to align with customer demands, thereby achieving 1.7GW of newly commissioned installed capacity. For industrial park customers, we have developed integrated“Load-Source-Grid-Storage-Sales”capabilities to facilitate project implementation. In 2024, the total installed capacity of newly commissioned industrial parks reached 0.5 GW. Among these, 236 MW of newly installed PV capacity and 80 MWh of newly installed energy storage capacity were connected to the grid. For factory and building customers, we are guided by customers’end-to-end energy and carbon management requirements across their operational chains to develop AI-driven energy-carbon solutions tailored to key industries, thereby intensifying collaborations with enterprise groups. In 2024, the Group achieved a commission of 1.2 GW of low-carbon factory and building capacity. During the year, the Group completed the construction and commissioning of 60 scalable projects, bringing the total number of operational scalable projects to 356. Through investments and management arrangements, the cumulative installed capacity reached 13.3GW, driving 41.57 billion kWh of integrated energy sales (including cooling, heating, electricity, and steam), representing a 19.8% year-on-year increase. In 2024, the revenue and gross profit of the integrated energy business increased by 5.2% and 16.4%, respectively, reaching RMB15,273 million and RMB2,220 million, with gross margin rising to 14.5%. Value Added Business: Enhancing Products and Services to Scale Operations In 2024, the government vigorously promoted the implementation of policies related to consumer goods trade- in programs and the renovation of old communities, stimulating the demand for home furnishings, household appliances, etc. Facing the vast residential consumption market and a customer base of 31.38 million households, the Group has broadened its focus beyond household gas demand. It has ventured into promoting a high-quality lifestyle that encompasses kitchen solutions, whole-house innovations, health services, and shopping experiences, progressively unlocking the full potential of its household customer base. We increased the penetration rate through core products and services, and enhanced performance through innovative intelligent products, and expanded the customer base through the output of capabilities. At the same time, based on customers’demand for quality living, we are actively exploring quality services such as community direct drinking water and home health products to continuously enhance customer value. In terms of core products and services, we improved the efficiency of our employees through intelligent capabilities such as intelligent scheduling, optimised the customer service system, promoted the lean operation of the grid, and achieved the value creation through core products and services such as range hood, boiler, cooking stove and heating furnace products. The comprehensive customer penetration rate reached 23.9%. By optimising the product portfolio, the sales volume of self-owned brand, Gratle, rose 62.2%, and the average transaction value per household increased to RMB612. In terms of intelligent products, we entered the market through IoT to develop innovative products and services.Focusing on the safety needs of household customers and combining the application of intelligent technologies, we cultivated and developed products such as AI safety valves, fire-leaving detection system, and safety guards, effectively combining products and services. The contract value of intelligent products reached RMB820 million in 2024, laying a solid foundation for enhancing long-term performance. In 2024, we focused on the demand for quality family living by utilising intelligent tools and collaborating with external ecosystems to expand models such as kitchen renovation, elder-friendly modifications, and health services. Concurrently, we leveraged the standardised products and services developed through our value added business to achieve expansion beyond our current markets and continuously meet the needs of family customers. In 2024, the revenue and gross profit of the Group’s value added business were RMB4,593 million and RMB2,971 million, representing a year-on-year increase of 24.1% and 18.0%, respectively. Business Outlook - For the year ended December 31, 2024 Looking ahead to 2025, the complexity and uncertainty of the international and domestic economic environment are expected to intensify. The government will promote stable economic development through a series of measures, including implementing more proactive and effective macro policies, expanding domestic demand across all aspects, driving scientific and technological innovation and industrial upgrading, advancing high-level opening up to the outside world, and mitigating risks in key areas. In 2025, AI technology is expected to develop advance rapidly and with costs continuing to decline, facilitating the widespread application of AI across industries and profoundly transforming people’s ways of life and mode of production.By focusing on customer needs and aligning with development trend, we are determined to upgrade our business strategy. Building on a foundation of 31.38 million residential household customers, 270,000 C/I customers, and an even broader market reach, the Group will leverage demand and intelligence to build long- term sustainable development capabilities. Through the integration of industry and intelligence, the Group will drive systematic innovation, deepening the application of intelligent technologies, and fostering the continuous business upgrade and the steady operational performance growth. Meanwhile, we will accelerate the application of intelligent technologies, build on valuable industrial experience, and develop intelligent capabilities to empower employees in achieving cost reductions and efficiency improvements through the application of such technologies. We will continue to deepen our understanding of customer needs, while analysing their needs to effectively match them with tailored solutions, thereby driving rapid business expansion. In the natural gas business, we will seize the opportunity arising from the industry reforms by actively promoting the cost pass-through for residential gas prices and enhancing connection with existing residential household customers. We will also continuously optimise our resource pool, improve the operational efficiency of natural gas facilities, and encourage C/I customers to increase their gas consumption, and enhance performance through higher sales volume. In the integrated energy business, we will utilise integrated energy simulation technology to support factories, buildings, large-scale parks, and small and micro parks in expanding their installed capacity. In the value added business, we will leverage the e-City e-Home platform to analyse residential households’energy usage data and enhance our understanding of customer needs, enabling the development of intelligent home solutions tailored to these needs and supporting the growth of supply capabilities. In addition, we will connect with various ecosystems to accelerate the penetration of core products and upgrade quality products and services, thereby driving the growth of value added business.Looking back, we have capitalised on the opportunities presented by China’s rapid economic development, achieving significant growth through the synergy of“Natural Gas Resources + Urbanisation”. Moving forward, we will continue to seize the opportunities presented by the era of intelligence and upgrade our business model through the integration of“Customer Resources + Digital Intelligence”, consistently creating value for customers, maximising returns for shareholders, and contributing to social value in everything we do! Source: ENN Energy (02688) Annual Results Announcement

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