FY2019/20INTERIM RESULTS（2019.4.1 – 2019.9.30）

2019.11.25

2

CONTENTS:

Operational Performance• Natural Gas• LPG• Value-added Services

Financial Performance

Future Strategy

3

Operational PerformanceNatural Gas

As at 30 September 2019, the Group cumulatively secured a total of 582 piped gas projects with concession rights; the number of connectable population covered by the Group’s piped gas projectsincreased to about 160 million.

4

Piped Gas Projects

342

508

582

0

100

200

300

400

500

600

700

1HFY2017/18 1HFY2018/19 1HFY2019/20

Number of piped gas projects

6

Natural Gas – Volume Growth

PeriodVolume Growth:

City and Township Projects

1HFY2019/20 15.4%

1HFY2018/19 28.1%

PeriodVolume Growth:

Pipelines & Trade

1HFY2019/20 -1.1%

1HFY2018/19 39.6%

11,837

4,651.7

5,958.96,874.3

3,593.8

5,017.7

4,962.5

0500

1,0001,5002,0002,5003,0003,5004,0004,5005,0005,5006,0006,5007,0007,5008,0008,5009,0009,500

10,00010,50011,00011,50012,000

1HFY2017/18 1HFY2018/19 1HFY2019/20

City & Township Projects Pipelines & Trade

10,977

Nat

ura

l Gas

Sal

es V

olu

me

(mill

ion

m3

)

7

Natural Gas – Customer Breakdown

3,593.8

5,017.7 Pipelines &

Trade4,962.5

515.2

540.0 CNG/LNG506.9

761.5

944.7Commercial

1,077.02,243.0

3,104.4

Industrial3,669.5

1,132.0

1,369.8

Residential1,620.9

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

6,000

6,500

7,000

7,500

8,000

8,500

9,000

9,500

10,000

10,500

11,000

11,500

12,000

1HFY2017/18 1HFY2018/19 1HFY2019/20

Pipelines & Trade CNG/LNG Commercial

Industrial Residential

Customer

% of total city &

township gas

volume

Volume Growth

1HFY

2019/20

1HFY

2018/19

Residential 23.6% 18.3% 21.0%

Industrial 53.4% 18.2% 38.4%

Commercial 15.6% 14.0% 24.1%

CNG/LNG Stations

7.4% -6.1% 4.8%

Total city &township gasvolume

15.4% 28.1%

Volume Growth

Customer1HFY

2019/20

1HFY

2018/19

Pipelines or Trading -1.1% 39.6%

Nat

ura

l gas

sal

es v

olu

me

(mill

ion

m3)

City &townshipgasvolume

Pipeline & trading volume

Proactively optimising its connection strategy to promote new connections of existing residential buildings, CGH continues to deliver stablenew connections in city gas projects, at the same time, continue to boost its robust growth of new connections in township gas projects.

8

Natural Gas – Fast-Growing Connections

Ho

use

ho

lds 2,142,114

2,534,709

2,934,080

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

1HFY17/18 1HFY18/19 1HFY19/20

New Residential Connections

9

Natural Gas – Customer Breakdown

Customer

Organic Growth1HFY

2019/20 Portfolio

Total

Change from 1HFY2018/19

1HFY2018/19 Portfolio

Total

1HFY2019/20

Change from1HFY

2018/19

1HFY2018/19

Residential 2,934,080 15.8% 2,534,70932,612,237

27,854,396

4,757,841

20.3%

12.2%

109.4%

27,105,030

24,833,381

2,271,649

City projects 1,716,985 21.6% 1,412,193

Township Projects

1,217,095 8.4% 1,122,516

Industrial 1,431 28.9% 1,110 13,838 27.8% 10,831

Commercial 14,314 -8.4% 15,622 213,951 15.9% 184,586

CNG/LNGStations (number)

-20 - - 555 -4.3% 580

10

Natural Gas – Tariff & Dollar Margin

City Gas ProjectsCustomer Tariffs (ex-tax) (RMB / m3)

1HFY2019/20 1HFY2018/19 Change

Residential 2.60 2.49 4.4%

Industrial 2.61 2.46 6.1%

Commercial 2.72 2.58 5.4%

CNG/LNG Stations 2.97 2.91 2.1%

Dollar Margins (ex-tax) (RMB / m3) 1HFY2019/20 FY2018/19 1HFY2018/19

Overall Dollar Margin (city gas projects) 0.621 0.61 0.625

Residential 0.51 0.44 0.47

Industrial 0.58 0.59 0.59

Commercial 0.80 0.75 0.82

CNG/LNG Stations 0.89 0.91 0.88

Residential (township gas projects) 0.50 0.40 -

11

Natural Gas – Other Operational Data

1HFY2019/20 1HFY2018/19 1HFY2017/18

ResidentialConnection Fee (RMB per customer)

City Projects 2,524 2,549 2,496

Township Projects 3,006 3,038 3,142

Urban Population Covered (million) 135.6 125.6 119.5

Household Penetration Rate (City GasProjects)

63.3% 59.8% 55.7%

12

Operational PerformanceLPG

13

LPG – Vertical Integration of the Value Chain

CGH Core Business Areas

Upstream

LP

G

Midstream Downstream End Users

LPG Import LPG

receiving

terminals

Storage

facilities

Class II

Stations

Bottling

Stations /

Retail

Points

Industrial

Domestic

Oil Refinery

CGH Facilities / Customers

China Gas owns:

8 LPG receiving terminals

300,000 m3 of LPG storage capacity

100 LPG distribution projects and 1,100 retail stores

LPG distribution coverage in 19 provinces in China

Over 300,000 m3 Storage Capacity

8 LPG Terminals (Class 1 & 2)

LPG Fleet Capacity: 12,600 tonnes

100 LPG Distribution Projects

1,100 LPG Retail Stores

Commercial

Residential

LPG Sales Volume Breakdown (Tons)

1,414,200 1,384,264 1,359,649

524,100 574,177 607,600

1,938,300 1,958,441 1,967,249

0

300,000

600,000

900,000

1,200,000

1,500,000

1,800,000

2,100,000

1HFY2017/18 1HFY2018/19 1HFY2019/20

wholesale retail

LPG – Vertical Integration of the Value Chain

Retail:• A more popular clean energy in townships and

villages where natural gas is not available;• Consolidating retail market through better service,

safety standard and quality of goods;• Owning a national call no. “95007”;

Wholesale: • Demand driven, such as rapid growth of the

petrochemical synthesis and processing sector where LPG is used as a raw material;

• Contractual sales accounts for about 60% of the total wholesale volume, so as to effectively avoid LPG price fluctuation risk;

Further market penetration Economies of scale Fully liberalized market LPG price-setter

15

* The wholesale business recorded a slight year-on-year decrease in sales volume. It was mainly attributable to the greater volatility ininternational crude oil and LPG prices during the period under review, and the control of the Group appropriately exercised over its LPGimports to prevent the effect of the substantial volatility of international LPG purchase price on profit.

** LPG purchase and selling prices decreased by approximately 30%, leading to decrease in revenue from sales of LPG during the periodunder review.

1HFY2019/20Change from

1HFY2018/191HFY2018/19

Sales Volume (tonnes) 1,967,249 0.5% 1,958,441

Wholesale 1,359,649* -1.8% 1,384,264

Retail 607,600 5.8% 574,177

Sales Revenue (HK$’000) 6,510,161** -33.7% 9,812,779

Gross Profit(HK$’000) 581,290 -19.5% 721,770

Operating profit (finance costs subtracted)

22,644 -33,707

Gross Margin(%) 8.9% 7.4%

LPG – Vertical Integration of the Value Chain

16

Operational PerformanceValue-added Services

18

Value-added Services – Asset-light Business

Sale and/or delivery of products/services via existing network with 38M+ customers

Gas heaters & kitchen appliances under the brand of Gasbo (中燃宝), such as gas stoves, disinfection cabinet, range hood, etc.

Smart Home

Comprehensive gas insurance

Sale of water purifier

Sale of air purifier

Gas alarm system

Bottled water

Gas corrugated pipes

Maintenance and equipment conversion services

and more…

Online +

offline

Huge PRC market, High margin, Strong growth

Blue

Ocean

19

Value-added services 1HFY19/20Change from1HFY18/19

1HFY18/19

Revenue 2,207.8 118.3% 1,011.4

Gross profit 820.9 96.9% 416.9

GP margin 37.2% 41.2%

Operating profit 676.6 98.1% 341.5

OP margin 30.6% 33.8%

Value-added Services – Asset-light Business

Revenue & profit continue to grow at high double-digit in years

Value-added Services

Performance (HK$ millions)

20

Financial Performance

21

* The growth of Core profit attributable to owners of the Company would have increased by more than 25.9% if RMB vs. USD/HK$ didn’t drop by more than 3.7% between 30 Sep 2018 and 30 Sep 2019.

HK$ (millions) 1HFY2019/20Change from

1HFY2018/191HFY2018/19

Revenue 27,925.5 (3.3%) 28,877.2

Gas sales 12,417.7 3.7% 11,973.6

Connection fees 6,055.8 14.0% 5,312.6

LPG sales 6,510.2 (33.7%) 9,812.8

Value-added services 2,207.8 118.3% 1,011.4

Construction design and services 734.0 (4.3%) 766.9

Gross profit 8,170.9 25.7% 6,499.9

EBIT 7,333.2 25.0% 5,867.2

One-off or non-operational items -11.9 198.2

Profit attributable to owners of the Company 4,909.6 16.2% 4,225.8

EPS - Basic (HK cents) 94.08 11.4% 84.42

Core net profit attributable to owners of the Company * 4,921.5* 22.2%* 4,027.6

EPS – Core (HK cents) 94.31 17.2% 80.46

Interim dividend per share (HK cents) 10.0 25.0% 8.0

Income Statement

22

ItemsHK$ millions

Remarks

1Exchange gain/loss (66.7)

Foreign debt proportion remained at low level of 19.2% as at 30 September 2019

2 Gain or loss on disposal of associate/JV/PPE/others

64.7

3 Share of ex loss attributable to Zongyu Gas (associate, 41.2% of shares)

(9.9)

Total amount （11.9）

One-off / non-operational items

23

Source: https://www.bloomberg.com/markets

Changes in exchange rate

1.1391

1.0968

1.07

1.08

1.09

1.1

1.11

1.12

1.13

1.14

1.15

28/9/2018 30/09/2019

Historical exchange rateRMB：HKD

24

Balance Sheet

HK$(millions) 1HFY19/20 1HFY18/19 1HFY17/18

Total Assets 111,472.7 93,516.1 69,683.1

Total Equity 41,727.9 34,712.7 27,650.6

Shareholder's Equity 36,004.6 29,549.8 23,893.7

Cash 9,025.3 9,987.9 7,216.8

Short-term Bank and Other Borrowings

16,954.9 8,737.8 11,056.3

of which LPG trade finance related facilities

2,106.1 1,696.7 -

Long-term Bank and Other Borrowings

21,710.8 24,385.7 14,700.1

Net Gearing Ratio * 65% 62% 67%

* Excluding the LPG import letter of credit related trade finance

25

Operating Profit Margins

1HFY2019/20 1HFY2018/19

Operating profit margin 21.5% 16.2%

Sales of gas 13.9% 12.5%

Gas connection 37.0% 29.7%

Construction design and services 19.3% 17.6%

LPG sales 0.3% -0.3%

Value-added services 30.6% 33.8%

26

Future Strategy & Outlook

Continue to add 10-20 new city concessions in each year

Speed up connections to old/existing residential buildings to increase penetration rate

Strong volume driver: “coal to gas” conversion for industrial and commercial users

Huge new market for winter heating application: replacement of coal with gas for residential users in towns andvillages in 15 provinces in northern China

Develop the enormous value-added services’ market for more than 38 million existing customers, increasing by5 million+ annually

Vertically integrate LPG value chain and boost LPG assets’ utilization rate

Explore new businesses, such as, Distributed Energy, Gas Heating, Electric Charging Posts and ElectricityDistribution etc.

27

Future Strategy

Established strategic partnerships with Tianjin city, Hebei, Shandong, Shanxi, Henan, Shaanxi, Anhui,

Yunnan, Hainan, Heilongjiang, Hubei, Jilin, Guizhou, Sichuan and Hunan provinces respectively, and

implemented projects, in more than 213 counties or districts, such as “replacement of coal with gas” in towns

and villages, conversion of coal-fired boilers to natural-gas-fed in urban areas, natural gas for vehicles,

distributed energy resources, natural gas storage facilities and the construction of natural gas pipeline

networks and “beautiful countryside”.

As at 30 September 2019, China Gas has signed contracts to replace coal with natural gas for more than

8 million households in towns/villages, including the 4.76 million households for which the connection

works have been completed by September 2019.

Replacement of coal with natural gas projects in towns and villages will contribute to the Group:

1. A substantial increase in new residential connections, on top of the annual residential connections in

369 existing city gas projects.

2. Continuously grow value-added business by selling wall-hanging gas heaters and kitchen appliances.

3. Replacement of coal with natural gas projects in towns and villages is mainly for winter heating

purpose, the average gas consumption per household for heating in winter is about 10 times of the

usage by urban household, thus, it will bring substantial growth in natural gas sales in the future.

28

Township “coal-to-gas” for winter heating

29

Outlook

SegmentFY2019/20（Original)

FY2019/20(Updated)

FY2020/21

Gas volume in city & township projects 25+% 25+% 25+%

Annual residential connections (households) 5,500,000 5,500,000 6,300,000

Sale tonnage of LPG (tons) 4,300,000 4,300,000 5,000,000

Gross profit of value-added service 40% 50+% 40+%

Dollar margin for city gas projects (RMB / m3 ) 0.60 0.61 0.60+

30

Conditions intended to be attached to the New Options to be granted

The Board proposes to seek the approval of the Shareholders on the refreshment of the Scheme MandateLimit, in order to enable the Company to provide more rewards and motivation to its employees and othereligible persons under the Share Option Scheme for their contribution and continuing efforts to promote theinterest of the Company and enhance the value of the Shares.

Conditions intended to be attached to the New Options to be granted under the Scheme Mandate Limit, ifrefreshed:

i. the Group’s audited net profit after tax (before share-based payment expenses)and deduction of net profit after tax attributable to non-controlling interests forany of the financial years ending on or before 31 March 2022 based on the auditedconsolidated financial statements of the Company amounts to HK$ 14 billion orabove; or

ii. if the above condition is not fulfilled, the New Options can still be exercised if theGroup’s audited profit after tax (before share-based payment expenses) anddeduction of net profit after tax attributable to non-controlling interests for thefinancial year ending 31 March 2023 based on the audited consolidated financialstatements of the Company amounts to HK$15 billion or above; and

the New Options will lapse if none of the above conditions is satisfied.

Reference Documents

31

32

Financial Highlights

0.160.22

0.39

0.5

0.66

0.75

0.91

1.28

1.61

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

HK

$

Core EPS*

2.23.92

8.48

12.06

16.15

19.46

25

35

44

0

5

10

15

20

25

30

35

40

45

HK

Cen

ts

DPS

* Net of one-off or non-operational items

33

Environmental Protection Policies

•issued by the Ministry of Environmental Protection in collaboration with the People's Governments of Beijing, Tianjin and Hebei in June 2016

•promotion of "gas for coal replacement" campaign, designation of coal-free areas

•dedicated funding from central government

"Reinforced Measures on Air Pollution Prevention and Control in Beijing-Tianjin-Hebei (2016-2017)"

•issued by the Ministry of Finance and Ministry of Environmental Protection in July 2016

•strengthen the use of special funds for “air pollution prevention and control”

"Measures for the Administration of Special Funds for Air Pollution Prevention andControl"

•issued by the People's Government of Hebei in August 2016

"Implementation Plan for the Reinforced Measures on Air Pollution Prevention andControl in Hebei (2016-2017)"

•issued by 4 ministries in collaboration with People's Governments of six provinces and municipalities in NorthernChina in February 2017

•number of "pollution diffusion belt cities" raised to 28

•shut down of heavily polluting factories in winter

"2017 Work Plan on Air Pollution Prevention and Control in Beijing-Tianjin-Hebeiand the Surrounding Areas"

34

Environmental Protection Policies

•issued by 4 ministries in collaboration in May 2017

•support for pilot projects on clean winter heating with central finance

•3 years demonstration period. Financial subsidy by the central government according to the scale of the city: 1billion each year for municipalities, 700 million each year for provincial capital cities, and 500 million each year forprefecture-level cities.

"Circular of the Central Government on Piloting Winter Cleaning and Heating inNorthern China"

•issued by 10 ministries in collaboration with People's Governments of six provinces and municipalities in NorthernChina in August 2017

•supervision of “air pollution comprehensive management” work done by the 28 “pollution diffusion belt cities”

"Priority Working Plan for Comprehensive Management of Air Pollution during Falland Winter of 2017-2018 in Beijing-Tianjin-Hebei and its Surrounding Areas"

•Issued by 10 ministries in collaboration in December 2017

•Includes all 15 provinces in north China

•by 2021: 70% clean heating coverage in north China, replacing 150 MTs of coal; comprehensive clean heatingcoverage in “2+26” cities and abolition of all boilers under 35 tons; 80% clean heating coverage in counties andcity suburbs and abolition of all boilers under 20 tons; 60% clean heating coverage in rural area

“Clean Winter Heating Plan for North China (2017-2021)"

•issued by the State Council, highest profile document for air pollution control

•Extending air pollution control from “2+26” to the Yangtze River Delta and Fenhe-Weihe Plain

•Incremental gas will prioritize residential use and winter heating in areas with severe air pollution; prioritizingBeijing-Tianjin-Hebei and its surrounding area and Fenhe-Weihe Plain in order to realize “the replacement of coalwith gas”

“Three Year Action Plan for Winning the Battle for Blue Sky"

35

Subsidy Policies for Township

Subsidies for "coal to gas replacement", in Hebei Province：

Residential users:

Installation subsidy, RMB 4,000/household. Provincial government bears RMB 1,000, city and countygovernments bear the rest RMB 3,000

Equipment purchase subsidy

70% reimbursement of purchase of wall-mounted heaters, up to RMB 2,700

Gas subsidy in winter

RMB 0.8/cubic meter subsidy for winter heating purpose, up to RMB 960 per year, for 3 years

Industrial users:

Subsidy of RMB 100,000 per steam ton for retrofitting coal-fired boilers to gas-fired boilers

36

Disclaimer & Contact

Disclaimer:

Statements in this presentation and handout that are not strictly historical are “forward-looking” statements. Forward-looking statements involve risks and uncertainties, including, but not limited to, continued acceptance of the Company’sproduct and services in the marketplace, competitive factors, new products and technology changes, the Company’sdependence upon third party suppliers and other risks detailed from time to time in the presentation, handout and otherrelated documents. All the directors of China Gas jointly and severally accept full responsibility for the accuracy of theinformation contained in these materials and confirm, having made all reasonable inquiries, that to the best of theirknowledge, opinions expressed in these materials have been arrived at after due and careful consideration and there areno other facts not contained in these materials, the omission of which would make any statement in these materialsmisleading. The materials and information in the presentations and other documents are for informational purposes only,and are not an offer or solicitation for the purchase or sale of any securities or financial instruments or to provide anyinvestment service or investment advice.

For investor enquires:

Mr. Frank Li

Tel: +852 2238 0315 l Fax: +852 2287 0633

Email: frank@chinagasholdings.com.hk

Website: www.chinagasholdings.com.hk