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Chairman’s Message

Chairmans-Message

   

Dear Shareholders,

 

2014 was announced as another outstanding year for Changfeng Energy Inc. (“Changfeng”). We are pleased to close the year with all our achievements in financial and operational performances, in better corporate management and in ongoing business strategy developments. In 2014, Changfeng reported net income of $4.0 million on revenue of $53.1 million. Net income was up 44 percent on a 26 percent increase in revenue. Our EBITA was $13.5 million, representing a 38 percent increase from $9.8 million in the prior year.

 

Business growth and expansion of natural gas distribution business and pipeline connection service in Sanya region and Xiangdong region continued to be the core of Changfeng’s growth strategy. Sanya City, especially the Haitang Bay region, as a fast-developing tourism destination in Hainan Province, China, has been presenting climbing demand for natural gas consumption. In order to meet with the increasing gas demand and to maintain our profit margin, Changfeng made all its efforts in pursuing qualified gas supply at reasonable price. Other than the secured gas quota of 24 million, Changfengis negotiating with its major gas suppliers to secure the gas supply after fiscal 2015 with reasonable price.

 

Changfeng will continue to explore and develop gas distribution business opportunities in the emerging markets in mainland China especially along the WEP II. Under the gas purchase and sale agreement with PetroChina, Chnagfeng will commission a contract with Jiangxi Provincial natural Gas Investment Co., Ltd. to transmit the purchased gas from WEP II to Changfeng’s gate station. Once construction completed, Changfeng will significantly reduce the volume of relatively expensive CNG currently purchased to meet with its operations in Xiangdong region, which will ultimately boost gas sales profit margin and further business expansion in that region. Changfeng is also pursuing other natural gas related projects along the WEP II and in other regions of mainland China.

 

To bring China into a favourable natural gas era promoted and supported by the Chinese government, or to build up eco-friendly communities to the nation widely, our engagements in the businesses of natural gas distribution and pipeline installation service are believed to be embraced with opportunities for sustaining developments and exploration. We will keep capitalizing on opportunities and projects for such businesses, and meanwhile, continuously seeking new business lines and markets in the years to come.

 

On behalf of Changfeng, I would like to thank for all our customers, shareholders, suppliers, and most of all, our dedicated employees.

 

Sincerely yours,

 

 

Huajun Lin

Chairman & CEO

Changfeng Energy Inc.

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