Statement from the Chair of the Board
Dear Shareholders,
CF Energy has a clear business focus that is to continue to grow in China’s vibrant energy service market to enhance its shareholders’ value.
CF Energy has established and dominated its natural gas distribution business growth in Sanya City, Hainan Province, PRC in the last 20 years. The management is proud of being a major contributor of clean energy transformation in the famous southern tourist island in China.
While we determined to be the dominant player and continue our organic growth in the natural gas distribution sector in Sanya City, the Company has never stopped looking for more highly sustainable growth opportunities in the energy service market in China.
In recent years as we stated in our press releases, the Company has established and fully funded another major long-term growth project in Haitang Bay district, Sanya City, Hainan Province, that has been recognized as the largest integrated smart energy distribution project in kind in China. In conjunction with the city’s municipal development plan, this project has secured a 30-year concession right for operating services that will build a networks and provide district cooling, heating and hot water utility for a total of 4.7 million square meters of designed potential customers’ space in the district. We are very proud of the milestone in 2021 that the phase one project has been commenced operation and more than ten major hotel and resort customers in the region have signed up our initial services. As we completing the whole project in the next couple of years we believe this project will be a strong long-term growing revenue source to our company.
Electric vehicle (EV) market as a clean energy strategy has experienced a tremendous growth global wide in the last few years, especially in China. As the country’s leaders determined to develop the battery swap type of EVs as a supplement of directly charging EVs to solve the country’s specific lack of charging supplies in densely populated cities, we have identified that the battery swap station service market could become a very large growth opportunity for CF Energy. In 2020 we have established our first battery swap station in Sanya City, and subsequently set up four more in Sanya, Haikou and Zhuhai cities as a way to enter the market. We will continue to find optimized financing format to fit in this aggressive but also long-term growth market.
Doing business for more than 25 years in China’s market, we understand its more complicated nature and highly competitive characteristics. While we stay confident being the driver of our business, we believe building strong partnerships always as a key success element for the Company long term plan. Beside having strong local strategic partnership with banks and SOEs, we have established JV partnership with EDF China, a subsidiary of global 500 company EDF France. On our expansion pathway we will continue to add more strong partnerships to enhance our business competitive strength.
We recognize the current challenges of world economic cycle and prolonged Covid-19 pandemic impact to all level of business. We are optimistic to the long term clean energy service market growth in China. To face the near term slow down pressure we determined to optimize our internal cost control management, maintain the company’s financial health and continue our funded projects development. Meanwhile, we continue to shut down non-efficient and no-growth business to keep the company’s focus and competitive strength in core business. We would like to be ready and in a position to benefit first when the economic cycle starts to turn positive.
On behalf of CF Energy, I would like to thank our customers, shareholders, suppliers, and our dedicated employees for their hearty support.
Sincerely Yours,
Ann (Siyin) Lin
Chairman & CEO
CF Energy Corp.