[For Immediate Release]
(Hong Kong, 8 November 2001) - Xinao Gas Holdings Limited ("Xinao Gas" or "the Group") (stock code: 8149) today announced its results for the nine months ended 30 Sepember 2001.
Xinao Gas recorded a turnover of approximately RMB161.2 million during the period, representing an increase of approximately 1.7 times over the same period last year. Strong profit growth was achieved, representing a rise of approximately 1.9 times over the same period last year to approximately RMB48.2 million. Earnings per share was approximately RMB9.13 cents, representing an increase of approximately 1.3 times over the same period last year.
Xinao Gas was recently selected by "Forbes Global" magazine as one of the World's Best 200 Small Companies and by "Asia Week" as one of the Best 500 Chinese Companies.
Mr. Wang Yusuo, Chairman of Xinao Gas, said, "I am delighted that the Group has achieved this tremendous growth and that our efforts are being recognised by the world's reputable financial publications. Going forward, we will strive to maintain the growth rates achieved such that our shareholders and investors can be properly rewarded. Through our hard work, we hope that our shareholders and investors in Hong Kong, China and internationally will not be disappointed."
Mr. Wang continued, "Given the size of the PRC natural gas market, there is significant room for the Group to expand. Through our active expansion in operational locations and customers base, we achieved desirable growth in terms of customer numbers as well as natural gas consumption. This has resulted in attractive increase in connection fee and gas usage charge income. During the period under review, business in Liaocheng, Huludao and Miyun expanded rapidly, while the business in Langfang sustained its growth record."
The Group derives its revenue primarily from connection fees. In the nine months ended 30 September 2001, connection fees which accounted for approximately 81.6% of the Group's total turnover grew by approximately 1.7 times to approximately RMB131.6 million. The Group's other major source of revenue, gas usage charges, reached approximately RMB28.9 million, representing an increase of approximately 1.5 times over the same period last year.
During the nine month period of this year, the Group made new gas connections to 28,854 households and 78 commercial and industrial sites. The commercial and industrial customers were connected to a total installed designed daily capacity of gas appliance facilities of 105,686 cubic metres. As at 30 September 2001, the Group had made gas connections to a total of 94,869 households and 321 commercial and industrial sites, with the commercial and industrial customers being connected to a total installed designed daily capacity of gas appliance facilities of 249,549 cubic metres. In respect of gas usage, the Group sold a total of approximately 20,392,000 cubic meters of gas during the first nine months. An additional 152 kilometers of intermediate and main pipelines were built during the nine month period bringing the total length of the Group's pipelines to 420 kilometers. Currently, the Group has 11 processing stations with daily gas supply capacity of approximately 748,000 cubic metres.
Mr. Wang continued, "On 15 October 2001, the Group signed a contract to develop a project in Bengbu city in Anhui Province. In the near future, the Group will set up a joint venture to engage in the provision of piped natural gas to residents in Bengbu city. At the end of September 2001, the Group obtained approval from the Langfang City Price Bureau to increase the gas usage charge levied. Coupled with the traditionally stronger performance in the fourth quarter, we believe such developments will bring attractive returns to the Group."
Currently, the Group's existing projects achieved a penetration rate of approximately 23%. This reflected the significant room for the Group to further expand its business. Since the commercial and industrial customers are large consumer of gas, the Group will make tailored marketing efforts targeting these customers. With the favourable government policies supporting natural gas development, the Group is confident that the penetration rate of existing development projects will further increase.
Mr. Wang concluded, "Going forward, the Group will continue to explore investment opportunities in the Anhui, Jiangsu, Zhejiang, Hunan and Shandong Provinces, and Shanghai Municipality. Moreover, as the Group is the first foreign enterprise to make a gas project investment in the down stream markets along the "West to East Pipelines", the Group believes that this first mover advantage will enable the Group to seek additional number of gas projects in locations along the "West to East Pipelines", thus enhancing value for our shareholders."
About Xinao Gas Holdings Limited
Xinao Gas is mainly engaged in the investment in, and the operation and management of, gas pipeline infrastructure and the sale and distribution of piped gas. The Group's other business activities include the sale of gas appliances and equipment, as well as the provision of repair and maintenance services. Currently, the Group's business has expanded from Langfang City in Hebei Province to Liaocheng, Zhucheng, Yantai, and Huangdao and Chengyang of Qingdao City which are located in Shandong Province, Miyun, Pinggu and Changping in Beijing Municipality, Huludao in Liaoning Province and Bengbu City in Anhui Province, a total of 11 regions.
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