Corporate Profile

CF Energy Corp. (formerly Changfeng Energy Inc.) (the “Company”), is a Canadian public company listed on the TSX Venture Exchange (“TSX-V”) under the stock symbol “CFY”. The Company was founded in 1995 and listed on the TSXV in 2008. CF Energy is an energy service company in China, primarily focusing on natural gas distribution and integrated smart energy utilization that serving residential, commercial and industrial customers, as well as the newly developed electric vehicle battery swap service in the PRC’s market.

Business model:

• Natural gas distribution utility segment, which comprises of natural gas transmission and sales, including (a) Pipeline Natural Gas (“PNG”) sales and Liquified Natural Gas (“LNG”) supply distribution sales and related service pipeline installation and connection sub-segments; (b) Compressed natural gas (“CNG”) vehicle refueling stations; and (c) Natural gas direct transmission.
• Integrated smart energy segment, which comprises of integrated smart energy system and integrated district energy distribution that providing systemic cooling, heating and hot water as services to its customers via CF Energy’s smart distribution networks.
• Smart mobility segment, which comprises of the operation of electric vehicle (“EV”) battery swap stations.

Natural Gas Distribution Utility Segment

Pipeline PNG Sales and LNG Supply Distribution Sales

Major pipeline PNG sales projects are based in Sanya City, Hainan Province and Pingxiang City, Jiangxi Province. The Company has been granted a 30-year exclusive concession right (2007 to 2037) in Sanya to operate the PNG sales as well as the construction and maintenance of the required facilities and pipelines which makes the Company the dominant participant in the Sanya PNG gas distribution market. The Company also distributes PNG to users in the ceramic industry base of Xiangdong District, Pingxiang City, Jiangxi Province under a 30-year distribution right (2010 to 2040) granted to its 40% owned associate.

CNG Vehicle Refueling

The Company operates two refueling stations respectively in Sanya City, Hainan Province and Changsha City, Hunan Province which provide refueling services for vehicles such as household cars, taxicabs, buses and trucks. The Company offers two types of natural gas to customers for vehicle refueling: CNG and LNG.

Natural Gas Direct Transmission

This is the transportation of natural gas via the Company’s 2.0 kilometers (1.4 miles) of pipeline connecting the provincial natural gas trunk lines to the Gaoyao Combined Heat, Power and Cold Natural Gas Power Plant owned by Guangdong Datang International Zhaoqing Heat & Power Co., Ltd. in Zhaoqing City, Guangdong Province.

Integrated Smart Energy Segment

The Haitang Bay Integrated Smart Energy Project

The Haitang Bay Integrated Smart Energy Project (the “Project”), which combines the use of multiple clean energy sources, including solar, hydro, electricity, and natural gas (CCHP/Co-Gen), is to supply cooling, heating, as well as hot water to the hotels, shopping centers, and households in the Haitang Bay area of Sanya City, Hainan Province, the PRC. This project is conducted through the Group’s 70% held (30% held by the EDF Group) subsidiary company, EDF Changfeng (Sanya) Energy Co., Ltd. (“EDF CF”) with authorized capital of RMB119.1 million fully paid up in 2021. Under a 30-year concession right agreement (2017 to 2047), EDF CF has the right to build, own and operate the project in Haitang Bay, Hainan Province. The Project has been recognized as a low carbon energy utilization project in the tropical resort city of Sanya in China’s Hainan Province. The Project will have four (4) central energy stations, 30km of district cooling and heating distribution networks, and 38 end user stations by the end of 2023. Once fully implemented, the system will serve 4.7 million square meters of commercial space, including large scale hotels, shopping malls, entertainment parks and buildings, hospitals and other commercial complexes.

The Project uses optimized multi-energy integration program and applies many advanced technologies, i.e. multi-level compressed high-efficient refrigeration units, “ice battery” technology, hydro heat pump technology, distributed photovoltaic technology and AI data management to improve energy distributing efficiency. It is also expected to save about 30,000 tons of standard coal and reduce about 100,000 tons of carbon dioxide, sulfur dioxide and nitrogen oxide emissions every year once fully implemented.

Construction of the first energy station and the 18,900m of pipeline for the integrated smart energy network (6,000m of pipeline laid through land reclamation bypassing a river) was completed and commenced commercial operation in September 2021. The first group of commercial customers includes the Sanya Edition Hotel, Fairmont Sanya Haitang Bay, and Westin Sanya Haitang Bay Resort. The Company has signed up ten (10) commercial customers in Haitang Bay. The first energy station can provide services to 350,052 square meters of cooling space.

The Meishan Project

The Meishan Project is a joint investment, construction and operation of an integrated district energy distribution project in the New Economic Development Zone of Meishan City, Sichuan Province (the “Meishan New Economic Development Zone”) to be operated by Meishan Hengtai Tianzhiyuan Energy Limited (“Meishan Hengtai”), a company which the Group holds an effective interest of 72%.

The Meishan New Economic Development Zone, situated next to the central urban area of Meishan City, Sichuan Province, with a planned development area of 50.5 square kilometers, is to be the hub for manufacturers of drugs, supplements, medical equipment, and other medical related supplies. The year-round constant demand for steam is necessary to produce drugs that makes the Meishan New Economic Development Zone an ideal platform for integrated district energy distribution.

The project commenced trial operation in April 2021 and commercial operation officially in mid-May 2021 and has signed up seven (7) commercial customers with three (3) customers under service. In addition, the Sichuan provincial government has approved the pipeline construction plan for the second phase of the integrated district energy distribution project in Meishan City which will commence construction in 2022.

The project is expected to significantly improve the district’s energy consumption efficiency and reduce local air pollution in line with state policy as more customers connect to the program.

Smart Mobility Segment

Five EV Battery Swap Stations

The EV battery swap station business is a segment of the Group to build and operate battery swap service to electric vehicles. EDF CF has invested, built and operated two (2) EV battery swap stations in Sanya City to serve BAIC Qingxiang Technology Co., Ltd.’s (“BAIC QX”) 200 swap-battery EVs for its network taxi hiring business (the “Network Taxis”) currently operating in Sanya City and its additional 200 EV Network Taxis planned for Hainan Province in the near term with Blue Valley Smart (Beijing) Energy Technology Co., Ltd. (“Blue Valley”).

Two (2) battery swap stations have started commercial operations in August 2020 and January 2021 respectively. In September 2020, the Company and EDF (China) Holding Ltd. (“EDF (China)”) jointly established Hainan Huapu Smart Mobility Company Limited (“Huapu SM”), which signed an 8-year exclusive co-operating agreement with BAIC QX and Blue Valley to provide EV battery swap services in the city of Haikou City, provincial capital of Hainan Province.

The first battery swap station in Haikou City commenced operation in August 2021, and the second station commenced operation in January 2022.

Concurrently, a memorandum of understanding was also signed among the Company, EDF (China) and Blue Valley to jointly develop the battery swap project in Zhuhai City, Guangdong Province.

The first battery swap station of Zhuhai City completed construction near the end of 2021, and it had an opening ceremony on January 11, 2022. The station was under trial run in February 2022 and officially commenced operation in March 2022.