Good evening. Welcome to China Gas Holdings Limited, FY 2023-24 interim results announcement by means of webcast and conference call. First, the management with us today. They are Chairman and President, Mr. Liu Minghui. Executive Director, Executive President, Mr. Huang Yong. Executive Director, COO, Mr. Kevin Zhu. Executive Director, VP, Miss Cathy Liu. VP, Mr. Frank Li. Mr. Rock Tan, GM, Capital Management. Now, opening remark by Chairman Liu Minghui. Welcome. Okay. Dear friends, joining us online and in person, dear investors, dear analysts, dear fund managers, and dear friends who are interested in this industry, welcome to China Gas Holdings Limited FY 2023 interim results announcement. For all of these years, you've been with us, witnessing our growth. So at China Gas, for all of our friends, both familiar or new friends, we are super grateful to meet you here at our interim results announcement, and we are more than happy to share with you the changes in this industry over the years. As we all know, during the pandemic or in the post-pandemic era, this year, there have been a slew of shifts in China's economy and also China's natural gas industry. China Gas, as one of the participants in this industry, on the achievements and headwinds in the industry, we are very familiar. We are also more than happy to share all of this with you on this presentation. On behalf of China's Board—China Gas's board and China Gas's management, welcome and... Okay, now, I'd like to give the floor to Mr. Kevin Zhu, our COO, Executive Director. To walk us through the half year and the future of China Gas. Okay. Dear investors, dear analysts, good, good evening. Today, on behalf of China Gas, I'd like to report to you China Gas's interim results ended for the six months ended September thirtieth. For my presentation, there will be five sections: performance highlights, operating performance, financial performance, outlook, and references. Besides, there are also many more information about China Gas. For this year's interim results, we believe that we enjoy the following highlights. First of all, we have secure a cash flow of all-time high among interim cash flow. For operating cash flow, compared with the HKD 4.74 billion of last financial year, that surged by 59.7% to HKD 7.57 billion. In free cash flow, also surged by 491.6% to HKD 4.97 billion. Also, an all-time high among interim FCF. Furthermore, we have secure the steady recovery of our dollar margin in gas sales. In terms of our gas dollar margin, it went up from CNY 0.54- CNY 0.57 per cubic meter. So that will reflect the steady recovery of our DM and with the introduction and implementation of price pass-through. Now, 11 provinces have issued policies of price pass-through, and they cover 162 projects operated by China Gas. Four regions have already hiked prices, the average price hike for residential users is 0.28 CNY per cubic meter. Because of the sound performance of our cash flow, we are rewarding our shareholders with dividends. So our company has increased interim dividend by 50% year-on-year to 0.15 HKD. And for all of the interim results, they are the three highlights. First, the pass-through of natural gas prices. In this June, I have elaborated on the NDRC's policy on establishing price pass-through mechanisms, and we have delivered our own interpretation and analysis of these policies. And we also, after the announcement, updated investors and shareholders on the policies of pass-through. So as of twenty-sixth November, 11 provinces have established price pass-through mechanisms, and they include Anhui, Hunan, Hubei, Shaanxi, Guizhou, Shandong, Guangxi, Liaoning, Jiangsu, Henan, and Guangdong. 11 provinces. For the policies across localities, against the backdrop of the price pass-through policies that have been implemented, and the provincial policies also require the completion of the establishment of mechanisms for cities and counties. By late 2024, 90% of the cities will complete their price pass-through. Here, we also listed some cities and counties already with price pass-through mechanisms or price adjustment policies. There are 198 of them. We only picked a few of them, the representative ones. In Hebei, Inner Mongolia, almost all of the cities and counties have completed the price pass-through. There are also some representative cities, including Nanjing, Tianjin, Baoji, Jinan, Qingdao, Chongqing, and et cetera. For cities and counties already with price pass-through mechanisms or price pass-through policies, there are 198 of them. So this is the footprint of price pass-through mechanisms and the price hikes. Now, let's move back to China Gas. What about the progress in price pass-through of ourselves? As of 26 November, there are 162 projects operated by China Gas, already with a price pass-through policies. So there are 198 projects nationwide. 162 projects of them are in China Gas's. So you're very curious about its impact on the residential dollar margin, as last year, it weighed in pretty much on the residential price. So for the 162 projects, almost 50% of the gas volume for residential users are covered. So the accurate one is 46.4%. And as I mentioned, Hebei and Inner Mongolia have covered all of the regions with a price pass-through. For the weighted average price hike in existing policies, it is CNY 0.28 per cubic meter. So for residential users, the price hike is CNY 0.28 per cubic meter, and for Hebei, that is, 0.39. So Hebei Province enjoy great centrality, concentration of price pass-through. So that is, that is the figures. And as we all know, for the North China, coal-to-gas projects, it is, primarily in Hebei. So this year we have witnessed a milestone in the policies. And why do we call it a milestone? The Hebei provincial government have issued a policy featuring the formula of, subsidy equals to comprehensive procurement cost, plus distribution returns, minus selling price to provide subsidies. So according to NDRC, the price pass-through mechanism feature the comprehensive procurement cost plus distribution returns. So, Hebei Province basically implemented the NDRC requirements, though it did not do this through price pass-through, but through a comprehensive procurement cost, plus distribution return, minus selling price equals subsidies. It is also doing it. So that is the picture of winter supply security in Hebei Province. So with the implementation of this policy, our dollar margin will recover, especially for the second quarter, the second half year. As we all know, in heating season, the coal-to-gas projects will register great growth in gas volume. So that is what the new policy in Hebei will bring us. So according to our forecast for this year, the Hebei coal-to-gas projects for winter for residential users, the dollar margin will surge to CNY 0.6 per cubic meter. So there is about 1.6 BCM of gas supply, security supply, gas volume. So according to the formula, we will gain CNY 843 million subsidies. So dollar margin will register a CNY 0.6 of growth. For last year, they have been subsidized, but the subsidies are modest. But this year things will be different. If the policy could be implemented, we can collect CNY 840 million. So the dollar margin for Hebei will rise to CNY 0.6 yuan per cubic meter. Now, we have already collected about CNY 360 million yuan, so the collection of the subsidies are pretty much done. And in Hebei, all of the 79 companies in rural coal-to-gas projects in Hebei province already enter into subsidy agreements with the government. All right, let's deep dive into natural gas. First, let's look at sales volume. This year, the sales volume in general grew by 1.7%. Trade and pipeline grew by 6.4%. City and township gas was recorded at 9.2 billion. ... down by 1.9%. By user category, residential down by 0.1%, industrial users down to 4.9 billion cubic meters, down by 4.3%. Commercial up to 1.52 BCM, up 7.6%. Gas stations down by 18.4%. Also, by this category, industrials contributed 53.2%, residential 27.1%, commercial 16.5%, and gas station 3.2%. And we understand that despite the natural gas sales in the country grew by 7% for the nine months, the major contributors are big consumers like chemical plants and power stations, which are directly supplied by the upstream providers. They are also pushing up the gas price. We can see here, industrial use is relatively weak. Residential use is stable. Commercial recovery is very significant. After COVID, catering and hotel had significant rebound, contributing to a steady increase in gas consumption. The industrial finished goods export was down by 5.9% year-on-year. Domestic textile, garment, and chemical companies have high stocking level, affecting their gas consumption for production. The ceramics and glass industries related to real estate market are relatively sluggish, affecting their consumption of gas. So that is why, after excluding trade and pipeline, township gas was recorded on a year-on-year basis. These are the major reasons. In the second half of the financial year, there are several drivers. The first driver is coal-to-gas conversion. We are experiencing the milestone. Last year, the winter heating season had high demand. However, LNG price was high. We did not have good price pass-through mechanism, affecting the growth of volume. We did not have dollar margins constraining our availability of supply. So with the phasing in of price pass-through mechanism, our dollar margin recovered. If we can get all the subsidies, we are looking at CNY 0.60 dollar margin. With a good dollar margin in the winter season, we expect the residential gas volumes will significantly increase. In 2022, we talked about Hebei province at 1.58 billion cubic meters. For the full year, we had 2.7 billion in 2022. In 2023, we expect extra of 640 million cubic meters with a combined of 3.34 billion cubic meters. And the coal-to-gas will also give us 24% of growth. For the full year, it is 3%. We also believe that the industrial gas consumption will re-increase, given that the macro has been improving in the second half. We'll also catch this market demand to push forward the gas volume increase in the second half of the year. And this is the outlook for the volume. Then, let's look at tariff and dollar margin. In this interim, residential tariff, on average, after tax, is CNY 2.77; industrial, CNY 3.32; commercial, CNY 3.42; gas station, CNY 3.93. On average, it is CNY 3.21, down by CNY 0.04. However, the average procurement cost down from CNY CNY 2.71- CNY 2.64 this year. So the dollar margin is up from CNY 0.54- CNY 0. 57, up by CNY 0.03. The residential dollar margin last year was CNY 0.22, which was presented in the last interim result announcement. In this year, it's CNY 0.31, up by CNY 0.09. CNY 2.77 decreased by CNY 2.64 does not give CNY 0.31, because residential and non-residential prices are different. Residential procurement cost is different from the average procurement cost of the group because of the contract-based volume. So that is why we say that we are looking at 9%, CNY 0.09 of increase to CNY 0.31. The policy of the government has been gradually phasing in, helping us to recover the dollar margin, which is very effective. The CNY 0.09 of dollar margin increase is a very good result. The other reason is the contract-based volume. Our contract-based volume percentage was... It is 98% this year. It was 89.9%, so it is up by 8% this year. It also helped us to gain more dollar margin... Moreover, the natural gas procurement cost is going down. The subsidy policy will also help us to cover more in the coal-to-gas project for the residential sector. That will also help us to gain more, earn more dollar margins compared to the second half of last year. Then let's look at LNG. LNG, China Gas Holdings has been building our own international import resources pool. We have signed long-term agreement of 3.7 million tons. We don't own any terminals. However, we have the right to use of slot at Shandong and Beihai, Yantai. We also have slot in Tianjin, Yuedong and Guangxi. We have signed long-term agreements, and we're making preparations in the slot accordingly. We have also signed agreements with Beijing Gas, our shareholders, to gain stable unloading period slot at Tianjin Port. We have been doing all these to build our resources pool. In terms of international trade, we have set up Singapore trade platform to increase our international presence. We will allocate, improve our resource allocations and including our spot and long-term agreements. We also have built vertically integrated ecosystem to sell to over 1,000 industrial and commercial users, and we are supplying LNG to third parties. We have the largest hazardous goods truck fleets in China. Now, we are looking at a very solid future. We have weighted average procurement costs, which is the price pass-through mechanism. Nowadays, we have the opportunities to import cheaper LNGs to suppress our cost and to give us extra dollar margin in the future. In terms of connections, we have 1.05 million residential new connections, down by 480,000 by 31.2%. For city gas, we have about 1 million, down by 345,000. For township gas, we are down by 133,000, down by 71.5%. For industrial users, we have connected 1,188 unit, down by 27%. Commercial, down by 5.6%. We have good cumulative connected users. City, we have 37.97 million. For township, we have 8.48 million household. In terms of the breakdown, this is basically the mix, and in terms of connection fee, we are quite stable. In city, it is HKD 2,509. For township, it is 2,901. Compared to last year, all these numbers are quite stable. For the connectable users at the moment, we are 54.3 million last year, and it is 53.6 million last year and 54.3 million this year. And the penetration rate is about 70%, and this year it is 69.9%. Let's look at the breakdown of users. The connected households takes about one-third this year, at 33%. For the new built, it is 67%, which is about two-thirds. So, the connection numbers are down this year. How about the potential for connections in the future? We would like to point out that two policies will affect the connection performance for the existing connected users. First, renovation of old communities. Different communities and localities are issuing policies and plans to renovate old communities. Based on the government's numbers, there are 53,000 communities in the country, covering 8.63 million users, mainly in northeastern China, Hubei, Shandong, Henan, and Fujian regions. There are many projects in these areas for the company, so the opportunities that we can catch are abundant. More than that, we are looking at bottled to pipe gas project, which is promoted by the government as well. The national government has been pushing such kinds of conversions. Over 100 companies have been issued the policy paper, while 20 companies have got relevant subsidies covering about 12,000 commercial users. ... We would like to catch these opportunities to further improve our commercial connections, and then we'll be able to cover more in the residential sector. So with the connectable users, and then we are looking at the 90% penetration rate. So then we have, we are looking at 48 million, now we have 38 million, so we have extra of 10 million for the existing connected customers. And if we look at one-third of them, will yield another result of 500,000, we'll be able to gain 250,000- 750,000 for in the next 10-13 years. This is the basic simple calculations. We think that the potential for new connections are still very significant, and this is the map for the existing 661 projects. We'll not go into details. Then let's look at the VAS. VAS has returned to positive growth. In the last interim result announcement, we had pre-tax profits segments decreased. In this year, revenue, gross profit, and profit before tax has increased by about 1%. However, RMB has depreciated against Hong Kong dollar. It has a 5.8% of impact, so the profit before tax actually grew by 6.9%. The HKD 870 million actually represent a 6.9% of increase. If we are denominated in RMB, traditional value-added services was affected. In Smart Living. Smart Living will continue its high growth. We focus on four segments, and we also benefit from the 50 million of gas users. So then we're looking at families and households. We're mainly looking at kitchenware, security, household product, and Smart Living. This is our business model. This year, in the second half, we'll continue to improve innovative businesses, mainly through channels and product. In the product segments, we are looking at the renewal of kitchens and also for product promotion, mostly diversifying our products and channels. In terms of our products, there will be home appliance renewal and kitchen renewal to promote our products. As for channels, we own urban showrooms and community stores as the innovations in diversifying our channels, and we will also update you on our progress going forward. That's all for VAS. Now, LPG. For the first half, LPG registered growth in volume. Now, the volume has grown from 1.8 million tons to 1.98 million tons, at 10%. Trade contributed to 80% and retail, 20%. Yet this year, for the first half, LPG price decreased year-on-year, and RMB also depreciated by 5.8% against Hong Kong dollar, hence the decrease of our revenue. Yet trade and retail all registered 20% of growth and gross profit per ton, so our operating profit remained good, up 1%. So LPG contributed to about HKD 200 million of operating profit. And I also have already walked you through that China Gas is China's only LPG operator with resources across the industrial chain and integrated distribution networks. In upstream trade, midstream distribution, and downstream, and downstream retail, we own extensive presence. So in the future, our strategy will be in upstream trade. We will leverage the procurement channels and volume that we have accumulated over all of these years to boost our international trade. This will be our priority for the upstream. For downstream, you might be curious, what kind of impact will bottle to pipe gas products bring to LPG? We deem that as an opportunity, as in the past there were too many business entities. We were actually operating and growing at the cost of safety issues. But now, in the context of safety requirements, we are offered with numerous opportunities to integrate retail markets. Now, in an asset-light manner, we are promoting the development of the retail market, and that has already yielded significant results. Now, the proportion of retail profit through light asset operations is 20%. That is our moves and actions and the business operation plans in the upstream and downstream. Now, integrated energy, I will brief you on that... China Gas's offer orientation is a Green City Operator. China Gas is moving fast toward green businesses, including PV charging and battery swapping, electricity cells, energy storage, and integrated energy based on instruments such as digital intelligence, virtual power plants, and green finance. In the second half, our priority will be user-side energy storage, especially for C&I users and integrated energy. Integrated energy enjoy the representative sample of a cooling, heating integrated system as comprehensive or all-in-one solutions. That was the two priorities in our integrated energy business, and that will conclude our overview, overview in terms of integrated energy. There are also some representative user scenarios here, including the user-side energy storage, like the project in Hengyang, and also the user-side energy storage project in an industrial user in Luoyang. Here are some pics of it. In terms of the integrated energy, the representative sample project will be a project in Dayushu, Beijing, covering 30,000 sq m with energy use, previously powered by two LNG fire boilers through renovation. Operational cost per year was down almost 70%, so in this regard, the demand and user scenarios are numerous, and we are promoting them in full steam. That will conclude our brief on integrated energy. Now, moving on to financial performance. Our consolidated income statement for the first half financial year, our revenue was HKD 36 billion, down 16%. Natural gas sales, HKD 22 billion. Gas connections, HKD 2.3 billion. Engineering, design, and construction, HKD 1.1 billion. LPG sales, HKD 8.4 billion, VAS, HKD 1.8 billion. Other businesses, HKD 740 million. That is the breakdown of our revenue. Gross profit went down by 18% from HKD 7 billion to HKD 5.47 billion-HKD 5.7 billion. Profit for the period, HKD 2.1 billion-HKD 2.2 billion, down 35.3% year-on-year. If we're excluding the one-off and non-operating factors, mainly in other losses and gains of HKD 538 million, and there was also one-off losses from Zhongyu of HKD 90 million. Those two figures would add up to HKD 629 million. In other losses, the vast majority of it is provision of HKD 480 million. That's the main part of our one-off losses, so that part changed drastically year-on-year. If excluding all those, our profit attributable to owners of the company would be HKD 2.5 billion, down 25.3% if compared with the HKD 3.3 billion. Core EPS, HKD 0.457. Interim DPS, HKD 0.15, up 50%. For this year, why was there a 25% decrease in core profit, about HKD 800 million? Well, the main reasons are, first of all, slide in new connections. Hampered by this sluggish housing market, new connections decreased by 31.2% year-on-year, leading to a decrease of HKD 507 million in core profit. RMB also depreciated by 5.8% against Hong Kong dollar, leading to a decrease of HKD 180 million in core profit. Financial expense also surged because of the interest rate hikes, leading to the 22% year-on-year increase of financial expense. Although our interest-bearing liabilities went down to HKD 554 million, to 500... From HKD 586 million-HKD 554 million, the financial expense of foreign debt drove the overall financial expense by one percentage point. More accurate, 1.03 percentage points, and that is our increase in financial expense. Yet the good news is that we are managing all this. Now, we have basically driven down the proportion of foreign debt to under 10%. So the increase of financial expense will be effectively controlled, so the overall financial expense for FY 2023 will remain stable year-on-year. That is our outlook for the financial expense. And for the period, the distribution costs and administrative expense both went down by 8.8% and 4.6%, respectively. That was good. That's all for our consolidated income statement. You might have also noticed why there was a decrease in our segment profit of natural gas of 24.4% as DM went up and gas volume decreased slightly? Well, the reasons are, first of all, the 5.8% depreciation of RMB against Hong Kong dollar, and retail gas volume went down by 1.9%, and dollar margin went up by 5.6%, and that contributed to the 3.7 change. And there was another story that in the first half of FY 2022, with the absence of price pass-through, we require our project companies to apply for subsidies at local governments, as there was no price pass-through. Local governments are supposed to provide subsidies to gas companies, and we were granted CNY 350 million in subsidy, and we have incorporated that in the profit of gas sales. Yet things are different this year, as NDRCs are promoting the implementing of the price pass-through policies. So local governments have shifted their focus to the implementation of the price pass-through policies and the launching of a price pass-through mechanisms. So their priorities are no longer providing subsidies to us. So except for Hubei province, where there are supply stability agreements on coal-to-gas projects, other regions do not do so, as their focus is now on the implementation of the price pass-through policies. So this year we do not have the CNY 350 million subsidies. If we are excluding the subsidies, the impact on dollar margin will be 0.04, 0.4 CNY. So actually, the DM for last year was 0.54 CNY. So the change was actually from CNY 0.5-CNY 0.57 per cubic meter. But for the subsidies, we were actually granted with such subsidies. That is the change between the interim results of FY 2022 and 2023. Yet for this half year, there was still absence of price pass-through in some regions, so we require our project companies to help the local governments define our losses, as according to the policies, the absence of a price pass-through could be absent later. We are still doing it, and if we can do well, we can drive the future dollar margin growth. That could answer some of your question on the 24.4% decrease in profit. That is the reasons. That's all for our income statement. Now, balance sheet. First, the figure from March 31 to September 30, exchange rate of Hong Kong dollar to of RMB to Hong Kong dollar was down by 6.3%. That is not the same with the income statement, as the income statement is about the average of exchange rates. So our total assets and total equity both went down. Cash on hand went up. Short-term bank and other borrowings remained stable. Net gearing ratio went down from 76% to 72%. So the total accounts receivable in trade and contractual assets is HKD 16 billion. It went down by HKD 3 billion, compared with the figure HKD 19 billion six months ago. For the period, accounts receivable in trade contributed to HKD 760 million in decrease, and contractual assets contributed to HKD 2.3 billion in decrease. That's all for our balance sheet. Now, cash flow. Here, as I already touched upon, about the strong cash flow this year, our net cash flow from operating activities hit HKD 7.6 billion, up 60% year-on-year. How do we do the calculation? Because of the decrease of profit, EBITDA decreased by HKD 1.2 billion, yet the accounts receivable and contractual asset decreased, contributing to HKD 2.6 billion, and the increase in contractual liabilities and prepayment from our associates also contributed to HKD 1.1 billion, and the taxes payable decreased, also contributed to HKD 389 million, and the changes in working capital is HKD 4.1 billion. And with the HKD 1.2 billion from the decrease of EBITDA, that would be HKD 2.9 billion decrease here - increase here. So that is the reason for the increase in our net cash from operating activities. And the CapEx for this half year was only HKD 2.6 billion, down 33.6% year-on-year. As we are delivering effective working capital management, we have cut our investment by HKD 1.3 billion. That is because the effective working capital management and CapEx control. First, let's look at the foreign debt management. By September thirtieth, as we have reported, that we have actually control it to 20.4%, which help us to save a lot of interest expenditure. Now, we have- ... HKD 112.5 billion of stand-by credits, which is humble. In the last segment, we'll look at the outlook for the future. Now, our guidance for dollar margins is CNY 0.52 for the full year of 2023-2024. What does it mean? In the next second half, we are looking at CNY 0.49 dollar margin, CNY 0.15 increase compared to last year. So how does that work? First, we already mentioned in the previous presentations, we are increasing our gas price of CNY 0.28 through price pass-through. Then, if it is diluted, we are looking at CNY 0.05 for the subsidy. That helps us to gain additional CNY 0.03. If we look at Hebei, based on the funds that we have received... Based on the funds we received, and if we look at the volume next year, we are looking at CNY 0.03 of increasing gas price. Then let's look at cost side. Our blended cost has decreased based on our contract. It is down by CNY 0.07 year-on-year. CNY 0.07 down compared to last year. And with the subsidy, and also the price pass-through policy, CNY 0.03 and CNY 0.05 respectively. That is how we drive the dollar margin gain to CNY 0.49 in the second half of the year, and that gives us a CNY 0.52 of dollar margin for the full year. And we look at the growth in the city and township gas sales volume, it will be a low single digit. And if we look at residential connections, we are looking at 1.5-1.7 million household. Gross profit and profit before tax growth, we are looking at 10%. LPG sales volume, 4.5 million tons. Core profit growth, aiming at 5%-10% of growth. So this will be our main guidance. And then I would like to talk about connections. We are looking at 1.5 million-1.7 million. However, we are looking at value-added growth. Financial cost will be flat in the second half and down by HKD 180 million, based on the analysis as we mentioned, and that is, benchmarking against the second half of 2022-2023. And for the profit growth, we are looking at volume growth and also dollar margin improvement. That will help us to drive better revenues and profits. I've also talked about coal-to-gas, which will give us, it is a contribution of 3%, looking at 640 million. This is the basic major contributors to the development next year. About CapEx, we are looking at HKD 6 billion-HKD 7 billion. The HKD 6 billion-HKD 7 billion will be broken down to city gas, security, and also the old facilities improvement. For M&A, we have we don't have much M&A development in the first half. LPG and others will be HKD 500 million. So that gives us a HKD 6 billion-HKD 7 billion for the company. I will not go to the references. You can actually refer to the slides in your hand. This is my presentation. Thank you very much.