HONG KONG, CHINA  - 28 September 2018 - SWS Research issued a research report on Beijing Gas Blue Sky Holdings Limited ("the Company" or "Beijing Gas Blue Sky", together with its subsidiaries, the "Group", HKSE stock code: 6828) today.

The report states that the Group is a nationwide integrated natural gas provider and operator. The Group's operations cover a large portion of the natural gas industry value chain, from upstream LNG imports, receiving terminals to trading and distribution to downstream fueling stations, as well as city gas and direct supply, etc. In 2017, the Group achieved natural gas sales volume of 513 million cubic meters and revenue of HK$1.45 billion, increased by 128.97% YoY, with trading and distribution and city gas business contributed HK$877 million and HK$500 million, accounting for 60.4% and 34.42% of total revenue respectively.

The newly-acquired projects of the Group brought stable performance. The Group acquired three city gas projects in Songyuan (Jilin Province), Yuncheng, and Yongji (both in Shanxi Province) in 2017. The three projects jointly contributed gas sales volume of 42.7 million m³ and profit of HK$47.1 million in 2017. 

As the Group's the largest shareholder, Beijing Gas Group planned to construct an emergency storage project in Tianjin South Port's LNG receiving terminal and purchased a 20% stake in Rosneft Oil's VCNG project, fully organized upstream natural gas resources. The Group is positioned as the Beijing Gas Group's overseas investment and financing platform. 

As the Caofeidian LNG receiving terminal has been completed and the city gas project in Teng County has been progressed gradually with the flourishing ceramics and titanium industries, the surge in gas consumption for industrial use is anticipated. The Group is expected to accelerate the expansion of the gas business segment based on the parent support.

Also, the Group acquired 29% stake in Caofeidian's LNG receiving terminal with currently an annual capacity of 6.5 million tons/year in 2018. Caofeidian's LNG receiving terminal recorded net profit of RMB825 million in 2017, increased by approximately 400% YoY. Due to favorable policies and the expansion of the tank, the turnover rate and scale of the Caofeidian LNG receiving terminal are expected to increase, which is expected to increase the group's profit. 

In addition, the Group actively implemented the "One Belt, One Road" strategy, actively participating in the receiving terminal resources in the "One Belt" along the eastern coast and expanding the downstream terminal market in the western inland and launching upstream gas source cooperation to improve the LNG industrial chain layout. (mor/*).