The global energy landscape is undergoing significant restructuring in 2025. Amid geopolitical instability, transition pressures, and surging electricity demand, nations are prioritizing energy security as a core strategic concern. In this context, natural gas, as a clean, low-carbon transitional energy source, is seeing its strategic importance rise. This pivotal shift has drawn market attention to the operational performance of gas companies. As a key player in China's gas sector, TIAN LUN GAS's 2025 results, released on March 30, provide a concrete case study of how these macro trends impact corporate performance.
According to the financial report, TIAN LUN GAS reported revenue of RMB 7.937 billion for 2025, a year-on-year increase of 2.0%, with core profit for the period recorded at RMB 285 million. The steady revenue growth reflects the company's ability to maintain a stable business foundation in a complex operating environment. This was primarily achieved by optimizing its business layout, strengthening cost control, deepening its core gas operations, and actively expanding its comprehensive service business, thereby building a more resilient operational system and laying a solid foundation to withstand industry fluctuations.
Gas sales remained stable, while the comprehensive service business achieved double-digit growth, demonstrating growth elasticity. From an industry perspective, China's natural gas sector continued to face numerous challenges in 2025. Persistent macroeconomic pressures and external constraints jointly suppressed gas demand from industrial and manufacturing sectors. High international gas prices not only dampened consumption willingness among price-sensitive users but also increased pressure on gas companies to restore gross margins. Simultaneously, the accelerated pace of energy structure transformation somewhat squeezed the peak-shaving space for natural gas power generation within the electricity system. Under the combined influence of these factors, the growth rate of China's apparent natural gas consumption slowed significantly in 2025. Data from the National Development and Reform Commission showed apparent natural gas consumption reached 426.55 billion cubic meters, a mere 0.1% year-on-year increase, significantly lower than the market's initial expectation of 6%–7% and marking the lowest growth rate since the "14th Five-Year Plan" period (excluding 2022).
The notable slowdown in market demand growth undoubtedly pressured gas companies, but it also served as a critical test of their strategic resolve and operational prowess. Against this backdrop, TIAN LUN GAS's revenue growth, which outpaced the industry average by nearly two percentage points, offers a reference model for how gas companies can navigate cycles and strengthen their endogenous growth capabilities.
During the reporting period, to ensure stable development, TIAN LUN GAS actively strategized across three dimensions: gas sourcing, gas sales, and comprehensive services, aiming to transition from a traditional gas supplier to an energy service provider. On the sourcing front, the company worked to build a diversified supply portfolio. By strengthening strategic cooperation with the National Pipeline Network and major national oil companies to reduce supply tiers, promoting regional pipeline interconnections to enhance emergency allocation capabilities, and utilizing gas storage facilities to expand LNG trade channels, TIAN LUN GAS ensured peak-shaving supply during the heating season while achieving cost-effective supply assurance.
In gas sales, the strategy focused on stabilizing the retail base. This involved deepening penetration in the existing industrial and commercial market through initiatives like replacing bottled gas with pipelines and offering customized "one enterprise, one policy" services, while also capitalizing on policy opportunities to implement price linkage mechanisms to restore gross margins, laying the groundwork for annual profit generation. By the end of the period, TIAN LUN GAS served 5.99 million pipeline gas customers, a 2.6% year-on-year increase. This included a 3.8% growth in residential urban customers and a 7.6% growth in industrial and commercial customers. This steady user growth drove a 6.8% increase in total gas sales volume to 2.386 billion cubic meters, leading to a 4.6% rise in gas sales revenue to RMB 6.813 billion. Retail gas revenue remained generally stable at RMB 4.971 billion.
In comprehensive services, TIAN LUN GAS leveraged its large customer base to build a service ecosystem. It standardized gas safety and personalized home renovation services and utilized old residential community renovation projects to promote product upgrades, creating a new growth curve. Revenue from other businesses reached RMB 644 million, within which comprehensive service revenue was RMB 489 million, a robust 15.3% year-on-year increase. This double-digit growth demonstrates the effectiveness of monetizing the company's user base through diverse service scenarios.
Deepening the dual-driver strategy of gas sales and comprehensive services has solidified the foundation for high-quality growth. Analysis of TIAN LUN GAS's 2025 performance reveals that the business system built across sourcing, sales, and services exhibited strong operational resilience during an industry-wide downturn. While external volatility remains the most significant factor affecting performance, its long-term impact is expected to diminish. Although current geopolitical tensions have pushed international gas prices higher, the market consensus is that this effect is not sustainable. Prices are expected to enter a downward trend after Q2 2025, following an easing of conflicts, presenting a "high first, low later" pattern for the year, which should facilitate a recovery in downstream consumption.
From the demand side, natural gas consumption growth is forecast to stabilize and rebound in 2026, gradually returning to a moderate growth trajectory. Predictions from the CNPC Economics & Technology Research Institute's report estimate China's 2026 gas consumption at approximately 4,500-4,550 billion cubic meters, with growth accelerating by 1.1 to 2.2 percentage points compared to 2025. The institute further noted that during the "15th Five-Year Plan" period, the process of replacing scattered coal and peak coal consumption will open significant potential for coal-to-gas switching in industry. Furthermore, driven by growing electricity demand and system peak-shaving needs, gas consumption for power generation is expected to maintain rapid growth. Additionally, the continued expansion of the domestic LNG heavy-duty truck market and steady growth in the population using gas will support stable growth in urban gas consumption. Consequently, natural gas consumption is projected to reach about 5,500 billion cubic meters by 2030, with an average annual growth rate of around 5.0% during the "15th Five-Year Plan" period. Clearly, TIAN LUN GAS stands to benefit from the industry's steady long-term growth.
Compared to peers, TIAN LUN GAS possesses a unique customer structure and regional advantages. In 2025, sales to residential, industrial & commercial, transportation users, and wholesale business accounted for 24.17%, 44.86%, 2.38%, and 28.58% of total gas sales volume, respectively. Its strength in the industrial and commercial market allows more effective passthrough of upstream cost pressures downstream. This not only enhances operational resilience during industry fluctuations but also positions the company to better realize earnings potential as price linkage mechanisms advance.
As energy transition deepens, gas companies face increasing long-term challenges. Concurrently, the fair opening of pipeline infrastructure and the market-oriented reform of gas prices are profoundly reshaping the industry's competitive landscape and business models. In this context, accelerating the transition from pure energy suppliers to integrated energy service providers has become an inevitable industry trend. The core logic of industry development is shifting from "volume expansion" to "structural optimization and quality improvement." Thus, leveraging digital intelligence to deeply mine customer value and using service innovation to expand business boundaries have become key for gas companies to seize strategic opportunities and achieve high-quality growth.
TIAN LUN GAS, with its core "Dual-Driver" strategy, is steadily carving a path of high-quality development, and this strategy has already yielded significant results. Specifically, the gas sales business serves as the foundation, providing not only a stable cash flow moat but also a natural interface connecting millions of households through its nearly 6 million customers. This vast user base acts as a massive, targeted traffic pool, offering a solid foundation for diversifying revenue streams through comprehensive services. The core logic of the strategy is that routine services like safety inspections and meter readings provide high-frequency touchpoints to understand deeper customer needs. This allows TIAN LUN GAS to naturally extend its service scope from "gas connection" to "creating a better life," creating a broad market base and a valuable feedback loop for its comprehensive services. This is the primary reason behind the double-digit growth in this segment.
TIAN LUN GAS stated that in 2026, it will focus on developing safety products, smart kitchen solutions, and extended home solutions based on gas usage scenarios. This approach aims to significantly enhance user loyalty and brand reputation through professional, attentive service while carving out a differentiated competitive niche in a highly homogeneous market, thereby creating new profit growth points and premium pricing power.
From a capital market perspective, the business闭环 (closed-loop) created by TIAN LUN GAS—using gas to drive services and services to promote gas—has generated endogenous synergies that fuel sustained development. This has not only driven steady improvement in operational efficiency but also built a core competitiveness that is difficult to replicate simply. The company has evolved from a single energy supplier into an integrated operator covering customers' full lifecycle needs. The depth of its transformation and execution effectiveness places it in a leading industry position, warranting a corresponding valuation premium. However, its current stock price corresponds to a Price-to-Book (P/B) ratio of only about 0.42 times, suggesting its value is not fully recognized.
Complementing the low valuation, the company's stable, high-dividend policy further enhances its investment appeal. In 2025, TIAN LUN GAS paid a dividend of 10.17 cents per share, with the total dividend payout representing 35% of core profit. This clear commitment to shareholder returns strengthens its long-term allocation value. Management is also demonstrating confidence with tangible action. Since the beginning of 2026, the company has conducted 25 share repurchases, totaling 4.88 million shares. This ongoing buyback activity underscores management's firm belief in the company's future prospects and is a proactive response to the perceived market undervaluation of its intrinsic worth.
In summary, considerations of business stability, valuation margin of safety, dividend reliability, and management's buying signals collectively indicate that TIAN LUN GAS currently presents a significant strategic investment opportunity.
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