Huzhou Gas Co., Ltd. Annual Report 2025: Key Financial and Strategic Insights for Investors

Business Overview and Principal Activities

Huzhou Gas Co., Ltd. is primarily engaged in the sale of piped natural gas (PNG) and liquefied natural gas (LNG) in Huzhou, China. The company also offers construction and installation services for end-user pipeline networks and gas facilities, targeting property developers and residents. Additionally, the company sells household gas appliances, energy products, distributed photovoltaic power, and leases properties in the PRC.

Financial Highlights

• Profit for 2025: RMB 149 million (down from RMB 169.1 million in 2024)
• Total comprehensive income: RMB 149 million in 2025; RMB 169.2 million in 2024
• Final Dividend Proposed: RMB 0.30 per share, totaling RMB 60,814,350 (tax inclusive), subject to AGM approval
• Basic Earnings per Share: RMB 0.467 (2025); RMB 0.581 (2024)
• Distributable Reserves: RMB 4.97 million as at 31 December 2025
• Share Capital: RMB 202,714,500, divided into 202,714,500 shares (150,000,000 Domestic Shares and 52,714,500 H Shares)

Dividend and Shareholder Information

The Board has proposed a final dividend of RMB 0.30 per share. The dividend will be paid from retained profits and is subject to shareholder approval at the AGM scheduled for 5 June 2026. If approved, payment is expected around 3 July 2026. Shareholders should note the closure dates for the H Share register to qualify for the dividend and voting rights.

• AGM Record Date: 5 June 2026
• Dividend Record Date: 12 June 2026
• Share transfer deadlines must be observed to qualify.

Events After the Reporting Period

Property Acquisition: On 25 February 2026, the Group acquired property in Huzhou City for RMB 42,750,000 from Huzhou Ruxin Construction Development Co., Ltd., a company indirectly owned by the controlling shareholder, Huzhou City Investment and Development Group Co., Ltd. This related party transaction is disclosed and may impact future asset values and rental income.

Dividend Announcement: On 31 March 2026, the Board proposed the final dividend as highlighted above.

Human Resources

The Group employed 448 staff as at 31 December 2025, with total employee costs of RMB 110.3 million. The company continues to invest in employee training and offers competitive remuneration packages to retain and motivate talent.

Shareholder Structure and Significant Interests

• Major Shareholders:
  • City Group: 89,457,540 Domestic Shares (44.13% of total share capital)
  • ENN (China): 60,542,460 Domestic Shares (29.87%)
  • SDIC Taikang Trust Co., Ltd.: 7,500,000 H Shares (3.70%)
  • NEW PARTNER INTL LTD: 3,700,000 H Shares (1.83%)
• No directors, supervisors, or chief executives had interests or short positions in shares or debentures of the company or its associated corporations as at 31 December 2025.

Corporate Governance and Compliance

The company has fully complied with the Corporate Governance Code and relevant laws/regulations in both the PRC and Hong Kong throughout 2025. Internal controls have been reviewed and confirmed to be effective and adequate, including anti-corruption and whistleblowing policies.

Audit Committee: Ernst & Young audited the 2025 financial statements and will seek re-appointment at the AGM.

Risks and Uncertainties

• The company’s business is highly dependent on PRC government policies. Any significant changes in laws or enforcement may materially affect operations and financial results.
• Concessions for PNG business may expire or be terminated, and renewal is not guaranteed.
• No significant investments, acquisitions, or disposals occurred in 2025; no major capital asset plans currently exist.
• Credit risk and fair value risks are managed through robust internal controls and regular evaluations.

Connected Transactions and Related Party Dealings

The property acquisition disclosed above is a related party transaction. The independent non-executive directors and external auditors have confirmed the terms are fair and reasonable, conducted in the ordinary course of business and on commercial terms no less favourable than those offered by independent third parties. Internal controls for monitoring such transactions are robust and regularly reviewed.

Key Audit Matters

• Revenue Recognition: The audit focused on revenue from PNG and construction/installation services. Procedures included analytical reviews, contract sampling, cost checks, and evaluation of management’s estimates and historical accuracy. No material misstatements were found.
• Fair Value of Financial Instruments: Debt investments and bank borrowings were assessed for fair value, with results confirming valuations are appropriate.

Other Notable Information

• Charitable contributions for 2025 totaled RMB 280,000.
• No purchases, sales, or redemptions of listed securities were made during 2025.
• No equity-linked agreements nor treasury shares outstanding as of 31 December 2025.
• Dividend policy does not prescribe a payout ratio and is based on financial condition and Board discretion.

Shareholder Rights and Communication

Shareholders holding 10% or more voting shares can request extraordinary general meetings. Those holding 1% or more can propose motions at general meetings. The company encourages active engagement and provides multiple communication channels, including electronic dissemination of corporate communications and timely publication of announcements on its website.

Potential Share Price Sensitivities

• Proposed final dividend (RMB 0.30/share) – if not approved or altered, could impact share value.
• Related party property acquisition – future asset values and rental income may affect valuation.
• Decline in profit year-on-year (RMB 149 million vs. RMB 169.1 million) – may be viewed negatively by investors.
• No major acquisitions or capital asset plans – stable but less aggressive growth outlook.

Disclaimer: This article is based on publicly available information from the Huzhou Gas Co., Ltd. Annual Report 2025. It does not constitute investment advice. Investors should conduct their own due diligence and consult professional advisers before making investment decisions. The author assumes no liability for any actions taken based on the information provided herein.

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