Chuncheng Heating Maintains High-Quality Development in 1H2023, Net profit Increases 95.9% year-on-year to RMB125 Million

HONG KONG, Sep 5, 2023 – (ACN Newswire via – Jilin Province Chuncheng Heating Company Limited (“Chuncheng Heating” or the “Group”; stock code: 1853), the largest heating service provider in Jilin Province, announced its interim results for the six months ended 30 June 2023 (“1H2023” or the “Period”).

Financial Performance
During the Period, thanks to the increase in revenue from the heat supply business, the Group’s total revenue was RMB898 million, up by 1.2% over the same Period last year. Gross profit increased significantly by 77.2% to RMB226 million, primarily due to decrease in heat procurement costs, coal procurement, labor workers as well as utilities costs, etc. Gross profit margin was at 25.1%. During the Period, with lower heat procurement cost, the establishment of the energy-saving and consumption reduction long term management mechanism to reduce energy consumption, together with optimizing the intelligent heat network control, the net profit attributable to equity holders of the Company surged 95.9% to RMB125 million. Net profit margin was 13.9% with earnings per share at RMB0.27.

Business Review
During the Period, the Group adhered to the concept of high-quality development. It continued to improve its management system for heat supply production and enhanced the level of applying intelligence in heat supply business. Besides, the Group actively responded to targets of the dual-carbon emission reduction and the work requirement of clean heating, as well as continued its cogeneration-led heat supply. During the Period, the Group’s revenue generated from heat supply business was RMB879 million, up by 2.1% year-on-year. Its heat service area was up 5.0% to 65.136 million square meters. As for the number of users, the Group had 533,138 heat supply users, increased by 4.6% year-on-year, among which, the number of residential and non-residential users increased by 4.3% and 7.3% year-on-year respectively.

In terms of construction, maintenance, design services and others business, it mainly provides services such as construction and building of heat supply facilities, engineering maintenance and project design for users. Its revenue generated was RMB19 million during the Period. In 1H2023, the engineering construction business undertook 32 projects while the design services business undertook 7 design projects. The Group continued its cooperation with tertiary educational institutions in researching cutting-edge technologies in the industry. Currently, 7 research projects are conducted in cooperation with the Jilin Provincial Science and Technology Department and tertiary educational institutions.

In terms of research & development (“R&D”), the Group newly obtained 6 utility model patents issued by the China National Intellectual Property Administration and 5 computer software copyright certificates issued by the National Copyright Administration during the Period.

Mr. Sun Huiyong, Chairman of Chuncheng Heating, said, “In 1H2023, we actively enhanced resource allocation and implemented intensified energy conservation measures to promote high-quality development of heat supply and production businesses, allowing us to accomplish various tasks. Entering the second half of the year, the Group will focus on the target to improve the quality of heat supply and reduce energy consumption. To achieve this, we plan to carry out digital intelligence integration projects for heat supply through making full use of the AI intelligent heat supply algorithm technology, in a bid to practically improve the efficiency in the utilisation of energy and enhance the heat supply operating efficiency. Looking ahead, we will continue to closely monitor the economic development landscape and industry trends while promote the mixed ownership reform within state-owned enterprises. We will also deepen the innovation and R&D of intelligent heating systems, further enhance market share. Besides, we are aiming to utilize the comprehensive efforts of multiple fronts such as efficiency enhancement and brand building to drive the Group’s business to the next level, creating ideal investment returns for shareholders.”

Jilin Province Chuncheng Heating Company Limited (stock code: 1853)
Established in 2017, Jilin Province Chuncheng Heating Company Limited has 11 holding subsidiaries and 13 heat supply divisions, covering a business scope of heating services, heat transmission services, engineering construction, equipment maintenance, design and research, electrical instrument maintenance etc. As of June 30, 2023, the Group’s heat service area covered 65.136 million square meters, providing heating for about 530,000 residential and non-residential users. The Group was listed on the Main Board of the Stock Exchange of Hong Kong Limited under the stock code “1853”, becoming the first heating stock in the Hong Kong capital market.

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