Business Operations

Business Operations

  • Industrial and Commercial Markets

    In early 2020, the COVID-19 outbreak hit the world. To effectively control the virus, the Chinese government suspended production, closing all business premises early in the year. With the resumption of work not taking place until after the Chinese New Year holiday, there was a remarkable impact on both production and general consumption in the first quarter of the year. The Group's industrial and commercial market segments were similarly affected.

    As the Chinese government introduced a series of lockdown measures in the early stages of the COVID-19 outbreak, to restrict people from being out and about, as well as to reduce human contact to fight the epidemic, most frontline industries, such as catering, tourism and hospitality industries, were virtually shut down. This therefore affected the gas sales volumes in our commercial segment, which amounted to 1,515 million cubic metres, down 14% from the same period in the previous year. Faced with this difficult business environment, the Group took a proactive stand — we contacted commercial customers to better understand their needs, in addition to introducing brand-new gas equipment to help them update their facilities for future development. This move was well received. The Group added approximately 9,900 new customers to our commercial portfolio in 2020.

    The impact of COVID-19 on the industrial segment was relatively small and concentrated in the first quarter of 2020, despite the fact that work resumption after the Chinese New Year was delayed due to the virus. However, with many industries across the country resuming work and production in the second quarter, a number of manufacturers saw their output going up, recording year-on-year growth for the second half of the year. As such, throughout the year, the gas sales volumes in our industrial segment increased 12% over the same period in the previous year.

    At the 75th United Nations General Assembly held during the year, the Chinese government announced that China would continue to make greater contributions to mitigate the impact of climate change through lowcarbon transition. To this end, the country had set emission reduction targets, with the aim of peaking carbon dioxide emissions by 2030 and achieving carbon neutrality by 2060. This move demonstrates the determination of the Chinese government to promote energy conservation and emission reduction. The adoption of clean energy thus has a pivotal role to play in the country's future development. Riding this trend, we have made every effort to promote “coal-to-gas” conversions among our customers, in addition to working tirelessly to expand the application of DES in China. These national strategies will bring both new and more business opportunities for the Group.

    Coal-to-Gas Conversion for Boilers and Furnaces

    The Group encourages customers to use natural gas as production fuel in place of highly polluting coal by different means. As greenhouse gas emissions from natural gas are some 50% lower than from coal, the increasing use of gas will help China achieve its carbon neutrality goal.

    In addition to helping customers replace old equipment with natural gas-fuelled boilers and furnaces, we advise new customers on the setting up of relevant equipment in their plants to catch up with the “coal-to-gas” policy and reap the benefits of natural gas-fuelled equipment.

    During the year, the Group's “coal-to-gas” projects for boilers and furnaces contributed 1,890 million cubic metres to our total gas sales volumes.

    Distributed Energy Systems

    In view of the ever-increasing demand for energy, driven by China's rapid urbanisation, coupled with the government's long-term emission reduction targets set during the year, increasing the use of efficient and low-pollution energy has become an important aspect of China's energy development strategy. Our DES projects actively developed in recent years effectively meet the requirements of such a strategy.

    In 2020, we added three DES projects, located in Tongling city, Anhui province and Fuxin city and Haicheng city, Liaoning Province. Together with our previously established developments, we currently hold a total of 21 DES projects.

    Additionally, Towngas China Energy Investment Limited (“TCEI”), a Group subsidiary, has actively developed three clearly established business lines — regional heat supply, energy interconnection and smart energy for industrial and commercial customers, as well as breakthrough distributed photovoltaic applications. TCEI is establishing extensive cooperations with professional associations and businesses in the industry while enhancing expertise and technical capabilities, in an effort to create a sound ecosystem for energy business development.

    C-Tech Laundry

    In 2019, Towngas China established the laundry service brand C-Tech Laundry to tap existing customer resources and explore business opportunities. The brand uses advanced natural gas-fuelled equipment to provide professional laundry services for commercial customers, and targets customers in service industries, such as the hospitality industry, in affluent areas.

    C-Tech Laundry set up a new laundry plant in Hangzhou city during the year. Together with the plants established in the cities of Chengdu, Guilin and Shaoguan last year, it had four laundry plants in operation in 2020.

    As the Pandemic retreats, we expect the economy and tourist visits to pick up across the country. This will create greater market demand for laundry services.

    Apart from supplying customers with safe and reliable natural gas, we provide energy-efficient hot water systems for commercial customers in the mainland. These systems have been well received since their launch in 2017. In 2020, we sold approximately 2,000 sets of commercial hot water systems, hitting a new high and creating an increase of 11% in the same period over the previous year.

    The water heaters in our commercial natural gas water heating system can be connected in parallel with one another to allow some or all of the water heaters to be turned on, based on the amount of hot water needed. Our systems thus provide more flexible solutions for customers. Furthermore, the systems can produce hot water instantly, thereby enhancing heating efficiency.

    These commercial hot water systems are widely used in places ranging from beauty salons and saunas to hotels and showers, among many others. Going forward, we believe that the applications of such systems are set to grow continuously.

  • Residential Market

    Fighting the COVID-19 Pandemic, the Chinese government imposed a series of lockdown measures which required virtually all large events and social gatherings to be shelved or deferred. As a result, residents stayed at home much more than usual. Gas sales volumes in our residential market segment were thus significantly boosted. In 2020, the Group's residential gas sales volume increased year on year by 9% and accounted for 22% of our total gas sales volume. The number of our residential customers also increased to reach 14.14 million households, a year-on-year increase of 5%.

    Customer Services

    Towngas China is committed to providing customers with high-quality services. At our customer centres, our customer service personnel provides one-stop solutions. These include appointments for stove installation, safety inspections and payment services. During the year, we set up a further three new customer centres, bringing the total number across the country to 163.

    We attach tremendous importance to our culture of service excellence. To this end, we have established a companywide service culture advocating for “Three Courtesies” where every frontline employee is required to serve customers with manners, etiquette and politeness. Making sure that our staff are able to meet these exacting standards, we provide professional training on a regular basis. In view of the COVID-19 restrictions, our relevant “Flying Dandelion Programme” could not be held in a physical classroom and thus was conducted online. We also made short videos of excellent customer service examples, uploading them onto our intranet as training material. This initiative allows our staff to log onto the learning platform on their mobile phones at anytime and anywhere.

  • Smart Homes and Gas Appliances

    Seeking to enrich the lives of our very large customer base, we continue to broaden Bauhinia's many product categories. Since launching the brand in 2005, we have provided our customers with both the most up-todate and top quality appliances, and seen Bauhinia's sales volumes increase year on year. Thanks to the brand's exceptional quality and excellent product design, coupled with our continuous efforts to improve product functions, the total sales volume of Bauhinia products continued to grow, exceeding 360,000 units for the year.

    With growing digitalisation and ever-increasing Internet connection speeds, artificial intelligence (AI) and Internet of Things (IoT) technologies have become more and more mature. Embracing the trend, we are applying the emerging technologies to the research and development of household products, as we move ever closer towards the concept of “smart homes”. In 2020, we launched an anti-scorch cooking stove equipped with an intelligent temperature sensor, which can detect the temperature at the bottom of the pot during cooking, to lower the risk of accidents caused by forgetting to turn off the appliance. During cooking, if the water in the pot reaches boiling point and evaporates completely, the temperature in the pot would jump. Upon detection of this abnormal temperature rise, the appliance will automatically turn itself off, thus ensuring the safety of both customers and their homes.

    Bauhinia also incorporated intelligent features and remote control functions into existing kitchenware products, including gas stoves, range hoods, water heaters and dual-purpose stoves. After connecting their appliances to the Bauhinia mobile app, customers can control them through mobile devices, such as mobile phones or tablets. If a customer forgets to turn off an appliance before leaving home, the app's built-in reminder function will send a notification so that the user can turn it off remotely via the app. This provides customers with better protection and a very positive user experience.

    Gas Clothes Dryers

    To address the problem of drying clothes in humid or rainy weather, the Group introduced gas clothes dryers in Hong Kong in 2016. Since then the value and usefulness of such products have been well recognised. Riding on this positive trend, we launched large-scale marketing campaigns for gas clothes dryers last year in three key regions, East China, South China and Southwest China. These efforts have borne fruit and during the year, the Group's gas dryer sales increased to approximately 15,000 units.

    Apart from selling gas clothes dryers through retail channels, we adopted a brand-new service model in 2020, where we set up selfservice drying stations in communities where we operate to provide 24-hour clothes drying services for residents in the vicinity. Every dryer at these stations is equipped with a QR code, which customers can scan to pay with their mobile phones and enjoy this convenient drying service.

  • Extended Services

    Towngas Lifestyle

    In 2017, we introduced a membership system, the Towngas Lifestyle Membership Scheme, for customers who as members can not only access online customer services, but also enjoy a variety of special offers, such as discounts on extended services, including health foods, kitchenware, home services, gas insurance and kitchen cabinets, as well as services and information provided by third parties in collaboration with Towngas China. In 2020, Towngas Lifestyle launched a mobile app in addition to our WeChat Mini Programme. As at the end of the year, the number of members exceeded 6 million.

    Given the boom in online shopping and the growing demand for quality ingredients from the Chinese market, our project companies took advantage of the Group's Taste Bauhinia brand and the business concept of “one city, three specialities” to source quality agricultural products in their areas of operation. Customers can thus buy local foods from various provinces and municipalities through the Towngas Lifestyle platform without leaving their homes.

    Going forward, Towngas Lifestyle will consolidate its position as a health, food and general service provider integrated into the daily lives of our customers as their home lifestyle managers.

    Towngas China Home Lifestyle Services

    Building on Towngas Lifestyle's large and loyal customer base, we launched our new Towngas China Home Lifestyle brand in June 2020, broadening the scope of services even further, with options such as home cleaning and home cooking available through the Towngas Lifestyle app.

    We provide professional training for every team member of Towngas China Home Lifestyle, making every effort to ensure that the service team practise and promote our “customer-oriented” service concept. To this end, we also conduct a customer satisfaction survey after each service session. As at the end of the year, the survey results show that customer satisfaction levels were well over 90%.

    Further improving the services of Towngas China Home Lifestyle, we will be opening "Moments+" Towngas China Home Lifestyle Centres in our many areas of operation throughout the country. Going forward, the plan is to provide a full range of domestic services such as elderly care to create synergy with our existing gas services.

    Mia Cucina

    With improving living standards in mainland China, people are increasingly focused on enjoying a quality lifestyle. In particular, the demand for well-decorated homes keeps escalating. Our high-end kitchen cabinet brand, Mia Cucina, fulfils this need. The brand features quality materials and fashionable design, whilst also providing the best storage capacity in a limited space. It has thus enjoyed great popularity with both major developers and residential customers.

    In future, Mia Cucina will extend its services beyond the kitchen. We plan to provide services such as customising and installing wardrobes and bathroom cabinets for instance. Customers will be able to enjoy a one-stop service package with better and more comprehensive home design, offering more cohesive and integrated functions and aesthetics.