Financial Performance and Dividend Policy

• Revenue: In 2025, Tian Lun Gas reported revenue of RMB7.94 billion, marking a slight year-on-year increase from RMB7.78 billion in 2024.
• Gross Profit: Gross profit was RMB1.11 billion, with a gross profit margin of 14.0%. This is a notable decrease compared to prior years, indicating margin pressure.
• Net Profit: Net profit for 2025 was RMB56 million, a significant drop from RMB324.5 million in 2024. Adjusted core profit, after excluding other gains and impairment losses, was RMB285 million.
• Dividend: The Board recommended a final dividend of RMB5.57 cents per share, with an interim dividend of RMB4.60 cents per share already paid, totaling RMB10.17 cents per share for 2025. The final dividend is subject to shareholder approval and will be paid in HKD, with the conversion rate to be announced by the Board.
• Dividend Policy: The company maintains a policy of stable dividends, typically twice per year, balancing shareholder returns with reserves for future growth. The Board considers several factors, including financial results, liquidity, business strategy, and capital requirements when determining the dividend level.

Capital Actions, Share Repurchase & Placement

• Share Placement & Subscription: On 24 and 28 February 2022, the company placed and subscribed 50 million shares at HK\$8.40 per share, raising capital for new projects and broadening the shareholder base. None of the placees became substantial shareholders.
• Use of Proceeds: Net proceeds of HK\$414 million were applied to rooftop photovoltaics projects (HK\$181 million), clean energy heating services (HK\$83 million), and general working capital (HK\$150 million). All proceeds have been fully utilized.
• Share Repurchase: The company repurchased 1,808,500 shares in December 2025 and 4,880,000 shares from January to February 2026. These were cancelled in March 2026. The repurchases were funded from retained profits, aiming to increase net asset value and earnings per share.

Operational and Business Highlights

• Comprehensive Service Business: Revenue from comprehensive services grew to RMB489 million, up 15.3% from the previous year, reflecting the company’s strategy to diversify and enhance user engagement.
• Other Businesses: Total other business revenue reached RMB644 million, with personalized decoration services and diversified user acquisition methods contributing to growth.
• Major Customers & Suppliers: In 2025, the five largest customers accounted for 10% of turnover, with the largest at 2%. Five largest suppliers accounted for 40% of purchases, with the largest at 12%. No director, close associate, or shareholder over 5% had interests in these customers or suppliers.

Risk Factors and Financial Position

• Risks: Tian Lun Gas faces financial risks (foreign currency, interest rate, liquidity), business risks (market/economic conditions), growth strategy risks, and human resources risks. The Group has policies in place to actively manage these risks.
• Gearing Ratio: As at 31 December 2025, the gearing ratio was 47%, indicating moderate leverage. Total borrowings stood at RMB6.87 billion, with cash and restricted cash at RMB1.38 billion, and total equity at RMB6.13 billion.
• Contingent Liabilities: No material contingent liabilities as at year-end.
• Financial Guarantees: The Group provided guarantees for RMB380.4 million in borrowings for Henan Yutian, undertaking 50% of the guarantee obligation. Directors consider the fair value of these guarantees as insignificant.

Corporate Governance and Shareholder Information

• Compliance: The company complied with all relevant laws and regulations in the PRC and Hong Kong, including environmental, labour, and safety laws.
• Shareholding Structure: Public float was maintained above the 25% minimum, at 28.06% as of year-end.
• Share Option & Award Schemes: No new options or awards granted, exercised, cancelled, or lapsed during the year. Share schemes are subject to updated Listing Rules effective from 2023.
• Board and Audit Committee: The Audit Committee reviewed and approved the annual consolidated financial results. KPMG issued an unqualified audit opinion.
• Extraordinary General Meeting: Shareholders holding at least 10% of paid-up capital can requisition an EGM or add resolutions to the agenda.

Events After Reporting Period

• The company changed its principal place of business in Hong Kong to 20/F, 163 QRE, Queen’s Road East, Wanchai, effective 5 March 2026.
• Additional shares repurchased (4,880,000) in early 2026, subsequently cancelled.
• No other significant events occurred after the reporting period up to the date of the annual report.

Price Sensitive Matters & Potential Share Price Impact

• Sharp Decline in Net Profit: Net profit fell dramatically to RMB56 million in 2025 from RMB324.5 million in 2024, marking a material deterioration in earnings which is likely to be price sensitive and could negatively impact share value.
• Share Repurchases & Cancellation: Repurchase and cancellation of shares may positively affect earnings per share and net asset value, potentially supporting share price.
• Full Utilization of Capital Raised: All proceeds from share placement and subscription have been fully deployed, demonstrating active investment in growth projects.
• Dividend Policy Maintained: While dividends remain stable, the sharp drop in profits and payout could raise concerns about sustainability if earnings do not recover.

Conclusion

Tian Lun Gas Holdings Limited delivered steady revenue growth in 2025 but faced significant margin and profit contraction. The Board’s commitment to stable dividends and strategic investment in clean energy and photovoltaics projects is clear, but the sharp drop in net profit alongside share repurchases and full deployment of capital are critical factors for investors. These developments are material and may be price sensitive, warranting close attention from shareholders and market participants.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research and consult professional advisers before making investment decisions. The information is based on the Tian Lun Gas Holdings Limited Annual Report 2025 and may be subject to change.