Corporate Profile

The Company was first listed on The Stock Exchange of Hong Kong Limited (the “HK Stock Exchange”) on 7th November, 1994 with the manufacture and sale of office furniture as its main business.

On 22nd January, 2001, the Group (i.e. the Company and its subsidiaries) acquired two major businesses namely (i) the Semiconductor Business and (ii) the Compressor Business from China Resources (Holdings) Company Limited (“CRH”), the Company’s substantial and controlling shareholder. The name of the Company has also been changed from Logic International Holdings Limited to China Resources Logic Limited (the “Company” or “CR Logic”). The Group disposed of its Office Furniture Business in 2005 and Compressor Business in 2007.

In March 2008, the Group disposed of its Semiconductor Business to its listed subsidiary CSMC Technologies Corporation (presently known as China Resources Microelectronics Limited). Simultaneous to the disposal of the Semiconductor Business, the Group acquired from a subsidiary of CRH the entire issued voting share capital of Redland Concrete Limited (“Redland Concrete”) for a cash consideration of approximately HK$217.7 million. Redland Concrete is principally engaged in the production and sale of ready mixed concrete in Hong Kong.

On 21st August, 2008, the Company announced that it has entered into a share purchase agreement with CRH to acquire the entire issued share capital of China Resources Gas Limited for a consideration of HK$3,814.8 million. China Resources Gas Limited through its subsidiaries in the PRC, operates a portfolio of city gas distribution business including natural or petroleum gas pipelines, CNG filling stations and bottled LPG distribution. The transaction was completed on 30th October, 2008.

On 1st December, 2008, the Company announced the disposal of the Ready Mixed Concrete Business to China Resources Holdings Limited for a consideration of HK$293.8 million. The name of the Company has also been changed from China Resources Logic Limited to China Resources Gas Group Limited.

Positioning & Strategy

The continued economic growth and the rapid industrialisation and urbanisation in China has spiked the demand for energy in China. In order to reduce reliance on polluting energy sources such as coal and crude oil, the PRC government has, in recent years, taken many steps to promote the development and utilisation of less polluting energy sources. Natural gas is considered a cleaner but relatively new conventional energy source compared to coal and crude oil. The PRC government has therefore been supportive of the development of natural gas.

The percentage of energy consumption from natural gas in the PRC is very low compared to international average levels. According to BP Statistical Review of World Energy June 2008, for 2007, natural gas only accounted for 2.71% of China’s total primary energy consumption, which is lower than Asia’s average consumption of 9.96% and far lower than the international average of 23.05%. The Company therefore believes that there is significant room for further increases in the utilisation of natural gas in China.

To increase natural gas supply, the “West to East Gas Transmission” pipelines were constructed with the support of the PRC government to bring natural gas from the Xinjiang Autonomous Region to the coastal regions of the PRC. The PRC government is also planning to construct the second phase of the “West to East Gas Transmission” pipelines to import gas from Central Asia and Russia; build pipelines from the gas-rich Sichuan province to coastal regions of the PRC and build LNG terminals in coastal cities. In addition, the PRC government has promulgated various policies and guidelines to encourage and rationalise the usage of natural gas. For example, in July 2008, the National Development and Reform Commission issued a natural gas usage policy (天然氣利用政策) for this purpose. The policy specifically states that municipal residential and commercial users shall have preferential access to natural gas.

The Company believes that, leveraging on the superior customer mix of the Group, excellent relationships with governments and gas suppliers, the China Resources branding effect and excellent management team, together with all of the above factors that show the natural gas industry in China offers significant opportunity for future growth, the company is well positioned to further expand and establish itself as one of the leaders in the city gas distribution business in the PRC.

To Become China’s Leading Gas Distribution Company

Favorable industry fundamentals
Strong platform for future expansion
Sustainable revenue and superior customer mix
Established supplier and government relationships
“China Resources” value
Experienced management team