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 primarily involved in natural gas distribution and sustainable energy utilization serving residential, commercial and industrial users as well as electric vehicle battery swap services in the PRC market.

Current business model

• Gas Distribution Utility Segment, which comprises of pipeline PNG sales, LNG supply distribution sales and natural gas direct transmission.
• Integrated smart energy segment, including two projects namely the integrated smart energy project (the “Haitang Bay Integrated Smart Energy Project”) and the integrated district energy distribution project (the “Meishan Project”).
• 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.

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 31.318km of a doubled-lined pipeline for the integrated smart energy network has been completed and commenced commercial operation in September 2021. The first group of commercial customers includes the Sanya Edition Hotel, Fairmont Sanya Haitang Bay, Westin Sanya Haitang Bay Resort and China Taiping Qube Hotel. The Company has signed up sixteen (16) commercial customers in Haitang Bay up to date. The first phase of the first energy station can provide services to 400,000 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 which makes the Meishan New Economic Development Zone an ideal platform for integrated district energy distribution.

The Meishan project commenced operation in mid-May 2021 and has signed up fourteen (14) customers with seven (7) customers under service up to date. Pipelines for the remaining seven (7) customers are either under construction or completed pending installing of customers’ own equipment.

The project is expected to benefit from cost efficiency while 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

EV Battery Swap Stations

The EV battery swap station business is a segment of the Group to build and operate battery swap service for electric vehicles. Two (2) EV battery swap stations in Sanya City commenced operation in August 2020 and January 2021 respectively 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 additional 200 EV Network Taxis planned for Hainan Province in the near term with Blue Valley Smart (Beijing) Energy Technology Co., Ltd. (“Blue Valley”). In September 2020, the Company and EDF (China) Holding Ltd. (“EDF (China)”) jointly established Hainan EDF Huapu Smart Mobility Company Limited (“EDF Huapu SM”), a 70% owned company of the Group which signed an 8-year exclusive co-operating agreement with BAIC QX and Blue Valley to provide EV battery swap services in Haikou City, the provincial capital of Hainan Province.

On September 14, 2023, Hainan Huapu Green Energy Investment Co., Ltd. ("Huapu Green Energy"), a whollyowned subsidiary of the Group acquired the remaining 30% equity interest in EDF Huapu SM with a consideration of RMB13.2 million, determined based on negotiation and with reference to an independent valuation performed by an independent evaluator. As a result, the Group's effective interest in EDF Huapu SM increased from 70% to 100%. Upon completion of acquisition, the name of EDF Huapu SM was changed to Hainan Huapu Smart Mobility Co., Ltd.

Following the acquisition of a 70% equity stake in the local Beihai City EV battery swap station operator, Beihai Brighton Road New Energy Ltd. (the “Beihai Company”) in Beihai City, Gangxi Province in October 2022, the Beihai Company currently operates two (2) EV battery swap stations and has 369 registered active taxis as its EV battery swap users by the end of the first quarter of 2024. There are 600 taxis in Beihai City and our clientele accounts for approximately 62% of the market. All of the taxis in Beihai City are battery swap cars, only Beijing Electric Vehicle Co., Ltd. and Dongfeng Electric Vehicle Co., Ltd. are within the government’s supplier list for taxis.

Future Business Integration

Distributed Smart Energy Ecosystem

The Company envisions the smart energy centralized cooling for hotels, battery swap stations, and operates as a virtual power plant with active end user participation. The combined energy capacity from the cooling system, battery swap stations, and possibly additional storage units, can act as a virtual power plant, providing grid services such as peak shaving, load balancing, and frequency regulation.

The Company is working to integrate a demand response system where hotels and other end users can opt-in to adjust their energy usage during peak periods in response to incentives. For example, shifting non-essential power usage to off-peak hours. EV owners can charge their vehicles during off-peak hours to benefit from lower rates and reduce grid strain during high-demand periods. Alternatively, V2G (Vehicle to Grid) concept allows EVs to return energy to the grid during peak times, effectively using the vehicle’s battery as a grid resource.

Furthermore, utilizing a platform for energy trading that allows surplus energy (from renewable sources and stored energy) to be sold back to the grid or shared among participants will add additional revenue stream and encouraging sustainable practices. The integration must connect all components through a smart grid that enables two-way communication between the energy providers and consumers.