Revenue and EBITDA increased by 24.6% and 28.5% respectively year-on-year

Highlights

• Total gas sale in subsidiaries increased by 90.0% to 1,013.2 million
  cubic meters
• Revenue increased by 24.6% to HK$2,676.1 million.
• Gross profit increased by 13.2% to HK$224.5 million.
• EBITDA (excluding all one-off gain*) increased by 28.5% to HK$480.9
  million.
• Total assets increased by HK$523.3 million to HK$8,751.6 million.
• The closing cash balance was HK$542.3 million, representing a
  year-on-year increase of 92.6%, and the gearing level was 36.1%.
• As at 31 December 2019, the Group's natural gas projects covered 17
  provinces, cities and autonomous regions in the PRC

Financial Highlights

^#Gross profit plus government subsidies
(subsidies for coal-to-gas connection, gas appliance & sales spread)

*One-off gain includes (i) disposal of
subsidiaries (ii) deemed partial disposal of an associate (iii) partial
disposal of joint ventures and (iv) gain arising from acqusition of an
associate

HONG KONG, CHINA - Media OutReach - 30 Mar 2020 - Beijing Gas Blue Sky Holdings Limited
("the Company" or "Beijing Gas Blue Sky", together with its subsidiaries, the
"Group", HKSE stock code: 6828) announced its interim results for the six month
ended 31 December 2019 ("FY2019"). In FY2019, the Group recorded total revenue
of HK$2,676.1 million, representing a growth of 24.6% year-on-year. The growth
was mainly attributable to the completion of the acquisition of Zhejiang Bo Xin
and Xin Te (the "Zhejiang Acquisition") this year. LNG business has been
launched with great success, as income from LNG business increased
significantly by 66.5% over the corresponding period, and income from direct
LNG supply business also increased by 21.7% over the corresponding period.

During the year, gross profit increased 13.2% to HK$224.5 million; earnings before interest, tax,
depreciation and amortization ("EBITDA") (excluding all one off gain) increased
by 28.5% to HK$480.9 million.

BUSINESS REVIEW

In FY2019, the Group's total gas sales and
throughput volume increased by 42.6% year on year to approximately 7,306.2
million cubic meters (FY2018: 5,125.0 million cubic meters). The gas sales
volume from the subsidiaries amounted to 1,013.2 million cubic meters in FY2019
(FY2018: 533.4 million cubic meters), and the significant increase was
attributable to LNG business. In particular, since the remaining 88 million
cubic meters of a shipment of offshore gas purchased through cooperation with
CNOOC was sold out at the beginning of the year, and the LNG business grew upon
the completion of the Zhejiang Acquisition, LNG business achieved a
year-on-year growth of 145.2%. Moreover, the sales from direct LNG supply
business also achieved a year-on-year growth of by approximately 51.3% because
of the new acquisition projects.

As at 31 December 2019, the Group's
natural gas projects covered 17 provinces, cities and autonomous regions in the
PRC, including Liaoning Province, Jilin Province, Hebei Province, Beijing City,
Shandong Province, Shanxi Province, Shaanxi Province, Ningxia Autonomous
Region, Shanghai City, Jiangsu Province, Anhui Province, Zhejiang Province,
Guizhou Province, Hubei Province, Guangdong Province, Guangxi Province and
Hainan Province.

CITY GAS BUSINESS

As of FY2019, the Group had 6 city gas
projects in Shanxi Province, Jilin Province, Liaoning Province and Hubei
Province. During the year, the Group connected gas pipelines for 45,042 new
users and the accumulated number of users reached 477,443, of which 44,784 were
new residential users and the accumulated number of residential users reached
474,949. The volume of natural gas sold by the Group to residential users
amounted to 72.6 million cubic meters (FY2018: 53.8 million cubic meters). The
Group secured 258 new industrial and commercial users and the accumulated
industrial and commercial users reached 2,494, and the natural gas sold to
industrial and commercial users reached 94.1 million cubic meters (FY2018: 79.2
million cubic meters). City gas segments recorded an income of HK$565.0
million, which included a connection fee income of HK$68.3 million, and the
government grants related to connection fee income of HK$73.2 million was
recorded in other gains and losses (FY2018: HK$209.9 million).

The Group actively responded to national
policies. In order to properly implement the Blue Sky Defensive Strategy to
improve the quality of the atmospheric environment, the Group deepened the
existing project regional market and vigorously promoted the coal-to-gas
process in the plain regions. Moreover, the Group is developing high-quality
industrial and commercial users in order to adjust the gas consumption
structure of the Northeast market, the Group continued to improve the market
system with the goal of "market integration" and made important contributions
to the Group's overall gas volume and revenue. In addition, further development
of urbanization boosted residential gas consumption. As China's economy
continues to grow, urbanization is expected to achieve stable development, and
gas market will likely further expand in the future.

TRADING AND
DISTRIBUTION OF LNG AND CNG BUSINESS

As of 31 December 2019, the Group owned
29% equity interests in PetroChina Jingtang LNG Co., Ltd., and distributed LNG
with gas sources from Sinopec's Dongjiakou receiving terminal in Bohai Rim, and
distributed LNG with gas sources from CNOOC's Ningbo receiving terminal in the
Eastern China. The Group recorded a total trading volume of 675.9 million cubic
meters (FY2018: 275.7 million cubic meters) and segment sales amount in trading
and distribution business of HK$1,527.1 million (FY2018: HK$917.1 million)
through distributing LNG by 67 self-owned natural gas transportation vehicles
(FY2018: 52 natural gas transportation vehicles). Benefiting from the advantage
of the Group's whole LNG value chain business, the sales from this business
grew dramatically. The Group participated in the first bidding for the window
period of LNG receiving terminal provided by CNOOC to independent third party
with its business partner in winter 2018, gained access to the import and joint
distribution right of offshore gas in the peak season of demand for LNG, and
completed the distribution of approximately 88 million cubic meters of LNG
during the reporting period.

The layout of the Group's LNG business has
become more solid upon building up the upstream gas resources, stronger
midstream logistics deployment capacity as well as the downstream terminal
distribution advantages in the whole LNG value chain, Therefore, the entire
value chain of LNG has been fully developed, so that all links could fully
exert synergy effects and promote the rapid growth of sales volume of LNG
business. In addition, in the first half of 2019, the Group completed the
Zhejiang Acquisition, which is a significant LNG operator in the Zhejiang
region with better upstream gas sources and a huge trading network,
contributing to stronger growth of the Group's trading business during the period.

DIRECT SUPPLY
BUSINESS

During the year, the Group recorded an
income of HK$430.1 million from its direct supply business, representing an
increae of 21.7% as compared to the corresponding period (FY2018: 353.5
million), which sold 135.0 million cubic meters (FY2018: 89.2 million cubic
meters) of natural gas to industrial and commercial users through the provision
of the direct supply service, representing a growth of 51.3% as compared to the
corresponding period of last year, covering such provinces as Shandong
Province, Guizhou Province, Anhui Province, Hainan Province, Zhejiang Province,
Guangdong Province, Liaoning Province and Shanghai City. Gas sales volume from
this business increased in 2019 mainly attributable to the completion of the
Zhejiang Acquisition at the end of May 2019, which provides direct supply
service to over 100 industrial customers with high demands for LNG as the
project is located at Yangtze River Delta region. With steady upstream gas
sources and regular downstream industrial customers, the project has become a
significant contributor to the growth of LNG direct supply business of the
Group since the completion of the acquisition.

LNG AND CNG
REFUELLING STATION BUSINESS

The Group sold natural gas to LNG vehicles
(trucks and buses) and CNG vehicles (taxis, buses and private cars). During
FY2019, the Group owned 29 gas refuelling stations including 17 CNG refuelling
stations and 12 LNG refuelling stations (FY2018: 34 gas refuelling stations
including 19 CNG refuelling stations and 15 LNG refuelling stations) mainly
covering Hainan Province, Anhui Province, Shandong Province, Guizhou Province,
Jilin Province, Shanxi Province and Liaoning Province, with gas sales of 35.6
million cubic meters (FY2018: 35.4 million cubic meters) and sales income of
HK$153.9 million (FY2018: HK$173.0 million), representing a decrease of 11.0%
as compared to the corresponding period of last year, which was mainly affected
by recession in the industry, the selling price declined compared to the
corresponding period last year, as such the Group closed some gas refuelling
stations that presented unsatisfactory operation performance.

LNG RECEIVING
TERMINAL PROJECTS

In FY2019, the total throughput volume of
Petrochina Jingtang (Caofeidian Jingtang LNG Receiving Terminal) reached
6,275.8 million cubic meters, among which, the gas volume externally delivered
to the pipelines through gasification was 5,503.0 million cubic meters while
the gas transportation volume of tank trucks was 772.8 million cubic meters.
The throughput volume of this project dropped this year as compared to
corresponding period of last year, mainly because consumption growth declined
in natural gas industry; implementation of coal-to-gas policy slowed down;
growth of demand from the downstream in the Northern China decreased, and warm
winter resulted in low demand from downstream sector.

Expansion
initiatives

The Group completed the Zhejiang
Acquisition in May 2019, the consideration of which was RMB205,000,000
(equivalent to approximately HK$239,174,000). As an essential LNG strategy of
the Group, the project will help the Group to further improve its comprehensive
competitiveness in markets in the Eastern China or even across China.

FUTURE PROSPECTS

Get bonus
brought by policies, and map out key strategies

As the government adopts the policy of
"regulating the core and relaxing the ends", the Group will make good use of
"core" resources, and develop key "ends" businesses to seek opportunities in
the industry, and maximize the comprehensive advantage.

Regarding upstream gas sources, the Group
not only held equity interest in LNG receiving terminal located at Tangshan,
but also won the bid for window period to engage in international trade for LNG
through cooperating with CNOOC. Since the Group has successful experience in
international procurement for gas source and domestic trade distribution,
various domestic and overseas companies are willing to make strategic
cooperation with the Group. For instance, China Sam Enterprise Group Co., Ltd
("China Sam") entered into Cooperation Framework Agreement with the Group in
the hope to maximize the development value of its existing LNG resources
cooperatively. In the future, the Group will explore the cooperation with
Sinoenergy Corp, a subsidiary of China Sam, to provide proper use of a total of
4 million tons LNG loading and unloading capacities annually of Sinoenergy
Corp's Jiangyin receiving terminal in Yangtze River Delta and Chaozhou
receiving terminal in the Pearl River Delta economic belts, take advantage of
the international procurement resources and experience, and gain greater
bargaining power in international gas sources. As such, would improve the
Group's pricing power and industrial influence in international procurement and
domestic distribution.

In addition, SK E&S, a Korean group
whose main businesses are LNG and renewable energies, is interested with
China's market potential (as China is one of the East Asian countries with
fastest growth of demands for LNG) and the domestic resources and operation
experience of the Group. Thus, there will be more collaborative cooperation
with the Group for upstream gas source businesses. Meanwhile, Beijing Gas Group
Co., Ltd ("Beijing Gas"), a major shareholder of the Group, is constructing a
LNG receiving terminal at Nangang Industrial Zone in Tianjin, including wharf,
berth, and 10 LNG storage tanks with the tank capacity of 200 thousand cubic
meters each, and building the supporting facility -- pipelines transmitting
natural gas from the receiving terminal to Beijing City. This indicates that
the Group will have more cooperation opportunities with the major shareholder,
Beijing Gas, in constructing LNG wharf and trading of LNG. Furthermore, the
Group will also pay close attention to other wharf resources to improve its capacity
to handle businesses.

In terms of LNG business from downstream
customers, the Group is maximizing the synergistic effect brought by the
acquisition, and exploring potential in Yangtze River Delta after the
completion of the Zhejang Acquisition. It is expected that the Group will adopt
the same strategy in Beijing-Tianjin-Hebei region, another district with strong
consumption of LNG. Enjoying prosperous economy, Beijing-Tianjin-Hebei region
is home to various commercial and industrial enterprises with considerable
market demands. In the future, the Group will keep increasing its market share
and influence in Yangtze River Delta and Beijing-Tianjing-Hebei region to
generate development momentum for surrounding areas, and improving its overall
capacity to supply and distribute LNG to increase its total volume of trade and
form greater scale economies effect, so as to further enhance the Group's
bargaining power with upstream markets.

In terms of city gas business, the Group
will gradually gain more projects, and projects designed mainly for industrial
and commercial users will become a driver for growth. At the same time, the
Group will make every possible effort to attract such end market customers such
as gas power plants, gas for transportation, distributed energy, industrial and
commercial users, and residential users, so as to increase gas consumption from
the end customers.

Achieve rapid growth
with support from the major shareholder and the Group's strength

With the establishment
of China Oil & Gas Piping Network Corporation, pipeline and network becomes
independent which would gradually open to third parties, so as to improve the
fair competitive capability of other market players. The Group will maximize
the advantages of LNG layout in the upstream sector and stable commercial and
industrial customer network in the downstream sector to gradually improve its
comprehensive services, and increase the proportion in the profit of trade. As
for city gas business, the Group will keep exploring opportunities of the major
shareholder's project in Beijing-Tianjin-Hebei region and China-Russia
east-route natural gas pipeline, and lay out key new project markets. For the
existing city gas projects, the Group will adhere to refined management to
improve the profitability of existing projects and achieve steady growth in the
income of existing city gas assets, and also leverage the existing projects' "point-to-area"（以點帶面）capability to focus on tapping the
market potential of Shanxi and Jilin.

Improve management
system to promote high-quality development

Focusing on strategy
planning and based on main principles of "increasing revenue while reducing
expenditure, and reducing cost while increasing efficiency", the Group will
optimize its organization structure and personnel, impose strict control on
expense, and improve efficiency to implement projects, so as to increase its
comprehensive profitability. In terms of finance, as projects acquired has
achieved normal operation to increase cash flow and work in tandem with the
support from the major shareholder, the Group will broaden financing channel,
increase debt ratio and scale of current borrowings appropriately through
cooperation with more commercial banks, and achieve a reasonable decline in
finance cost by refinancing the existing debts to improve the Group's
profitability. In terms of management of budget and cash flow, the Group will
develop strict review system and a large data management system, adopt various
measures to ensure the security of cash flow, and make active effort to develop
peripheral market guided by budget objectives, As such, to make constant
improvement in its overall operation, and ensure high-quality development for
the Group. In terms of performance management, the Group will develop a more
scientific performance system to achieve a sound appraisal system, such as
achieving a thorough assessment-related systems, improved assessment process,
extensive application of assessment results, and effective measure to ensure the
implementation of assessments. In addition, the Group will also apply its
strategies and ideologies in performance management to corporate culture and
human resources management so as to maximize the guiding and encouragement role
of performance appraisal, and to further help employees and the Group to grow
together.

About Beijing Gas Blue Sky Holdings Limited

Beijing Gas Blue Sky Holdings Limited ("Beijing Gas Blue Sky", HKSE
stock code: 6828) is an integrated natural gas provider, distributor and
operator, with an emphasis on the midstream and downstream natural gas
development. Our natural gas business includes: (i) construction and operation
of compressed natural gas ("CNG") and liquefied natural gas ("LNG") refueling
stations for vehicles; (ii) construction of natural gas pipelines and operation
of city gas projects by providing piped gas; (iii) direct supply of LNG to
end-users; and (iv) trading and distribution of CNG and LNG.

The Group has adapted to the "One Belt One Road" policy, and focus on
operating and investing natural gas business. The Group is actively expanding
its business development and distribution, as well as continues to gradually
expanding the scale of operations. Currently, the
Group's natural gas projects covered 17 provinces, cities and autonomous
regions in the PRC, including Liaoning Province, Jilin Province, Hubei
Province, Beijing City, Shandong Province, Shanxi Province, Shaanxi Province,
Ningxia Autonomous Region, Shanghai City, Jiangsu Province, Anhui Province,
Zhejiang Province, Guizhou Province, Hubei Province, Guangdong Province,
Guangxi Province and Hainan Province. The Group is committed to its vision:
"develop clean energy, enhance customer value, create a beautiful blue
sky". In the future, it will continue to actively investing and developing
natural gas business, as well as participating in the development of natural
gas industry value chain.