As 2026 marks the inaugural year of the "15th Five-Year Plan," China's comprehensive green transformation of its economic and social development is entering a critical and complex phase. However, the global natural gas supply chain is facing severe tests due to escalated geopolitical conflicts and blocked key shipping lanes, driving international gas prices sharply upward. Against this intricate macroeconomic backdrop, the latest "China Natural Gas Development Report (2026)" from the National Energy Administration indicates that, thanks to the coordinated efforts of the domestic production, supply, storage, and sales system, China's natural gas market has maintained a generally stable operational trajectory.
Notably, natural gas's role in the global energy landscape has transcended its former status as a mere "transition fuel." It is now recognized as a "long-term core energy source" and even an "ultimate energy source" in the restructuring of the global energy system, serving as the "best partner" for the large-scale development of renewable energy. Amidst the accelerated energy transition, natural gas plays an irreplaceable strategic role in replacing high-carbon energy sources, providing flexible peak-shaving for the power system, and alleviating the over-reliance of renewables on critical minerals. Within this long-term, certain-growth trajectory, TG Smart Energy (01083) has posted a steady set of interim results today. According to information from Zhitong Finance APP, the company recorded a turnover of HK$11.328 billion for the first half of 2026, a 9% increase year-on-year, with profit attributable to shareholders reaching HK$690 million. Concurrently, the company continues to actively reward its shareholders, declaring an interim dividend of 5 HK cents per share, once again conveying management's confidence in the full-year performance to the market.
Shifting from "Incremental Expansion" to Refined Operations Focused on "Unlocking Existing Potential"
With the progression of the "15th Five-Year Plan" and the deepening of urbanization, natural gas's role in peak-shaving and synergy within the new energy system has been further solidified. At the same time, price linkage mechanisms have been broadly established across various regions, providing fundamental support for the industry to alleviate upstream cost pressures. However, looking at the industry's current state, the deep adjustment in the real estate market has made the contraction of traditional connection businesses an irreversible trend, pushing the city gas industry fully into an era of "stock competition." The competitive focus has completely shifted towards refined customer management, gas source cost control, and the capability to offer integrated multi-energy complementary services.
Facing this industry inflection point, TG Smart Energy
With the comprehensive implementation of price linkage mechanisms for industrial and commercial users, the company's terminal gas sales margin has continued to recover, and the channel for transmitting upstream cost pressures to end-users is now essentially clear. On the demand side, the company is proactively driving the substitution of gas for steam, electricity, and other energy sources in the industrial sector, deeply exploring incremental gas demand from existing industrial users. During the period, it successfully developed 67 new major clients, representing a gas usage volume of 100 million cubic meters.
In terms of business synergy, TG Smart Energy has demonstrated robust strategic execution and market sensitivity in cultivating the existing market. During the reporting period, the company adhered to using its gas business as the core foundation, continuously promoting the deep integration and synergistic resonance of its four major business segments: gas supply chain, engineering manufacturing, "Gas+" integrated energy services, and AI-driven digital intelligence. Among these, the "Gas+" segment focuses on integrated energy supply, energy management contracting, and energy-saving services, with application scenarios covering industries such as food, chemicals, and pharmaceuticals, offering vast market depth. As the "Gas+" business enters a high-speed expansion phase, energy sales volume surged by 23% year-on-year to 810 million kWh during the period, driving associated natural gas sales of 70 million cubic meters. Integrated energy revenue grew by 14% year-on-year to RMB 390 million, with gross profit up 10% to RMB 90 million. This dual achievement in scale and efficiency has carved out a new growth pole within mature markets.
A Light-Asset Model Forges a New Growth Engine
If the gas business serves as TG Smart Energy's "ballast stone," then renewable energy is its "new engine" for navigating cyclical downturns. On the policy front, the 2026 Government Work Report included "future energy" in top-level design for the first time, and grid parity for new energy has entered a fully market-oriented era. Coupled with the official implementation of the EU's Carbon Border Adjustment Mechanism (CBAM, covering high-carbon sectors such as cement, steel, aluminium, fertilisers, electricity, and hydrogen), export-oriented enterprises are being compelled to accelerate their adoption of green power. Building "zero-carbon parks" and developing "source-grid-load-storage integration" has become an imperative. These policy directives are rapidly reshaping the industry landscape.
The "'15th Five-Year Plan' Carbon Peak Action Plan," issued by the State Council in July 2026, outlines a clear roadmap: over the next five years, China will build around 100 national-level zero-carbon parks and about 500 zero-carbon factories, guide new projects to cluster in zero-carbon parks, and vigorously promote the development of source-grid-load-storage integration. In this context, the industry's competitive logic has fundamentally shifted—from a past focus on extensive "installed capacity scale" to a refined focus on "asset operational efficiency." Moving forward, only enterprises equipped with stable, high-quality customer resources and digital trading capabilities will be able to build a moat and capture excess returns in the stock competition.
The interim data from TG Smart Energy precisely validates the success of its strategic upgrade. According to the latest financial report, during the period, distributed photovoltaic (PV) newly connected capacity was 0.2 GW, bringing cumulative installed capacity to 3 GW. PV power sales increased by 12% year-on-year to 1.32 billion kWh. Electricity trading volume doubled to 7.23 billion kWh, serving 3,500 industrial customers. It is evident that both its asset scale and operational metrics are showing steady growth. Furthermore, leveraging its 128 zero-carbon smart parks, the company has successfully established a synergistic advantage characterized by "gas-electricity complementarity, shared scenarios, and customer linkage."
Notably, the company has not blindly pursued scale expansion in heavy-asset PV projects. Instead, it focuses on two high-value-added segments: the Asset Management (AuM) model and electricity trading. By rapidly expanding its assets under management, the company has achieved substantial asset management profits. According to information from Zhitong Finance APP, in May of this year, TG Smart Energy's "CPIC Asset - Towngas Smart New Energy Infrastructure Carbon Neutral Green Holding Type Real Estate Investment Trust" was officially listed on the Shenzhen Stock Exchange's inter-institutional REIT platform. This marks another significant milestone in the company's green finance development. The underlying assets of this REIT are valued at RMB 507 million, with an issuance size of RMB 305 million. It received active subscriptions from insurance companies, state-owned and foreign institutions, securities firms, and others. All proceeds will be directed towards the investment and construction of high-quality PV and energy storage projects. As of June 30, 2026, cumulative financing from related quasi-REIT products reached RMB 5.5 billion, establishing itself as a core tool for the company to deepen its light-asset transformation and optimize its cash flow structure.
Simultaneously, leveraging the extensive industrial and commercial customer network accumulated through its gas business, its electricity trading volume has achieved high growth, leading to significantly enhanced power sales profits. More importantly, the company has built a unique competitive barrier using its "gas-electricity synergy plus AI algorithms" strategy, effectively warding off intense competition in the power sales market and boosting overall profitability. In the first half of this year, electricity trading volume saw high growth, with 7.23 billion kWh sold. Business revenue from this segment surged by 45% year-on-year to RMB 29 million. This light-asset, high-return model not only mitigates the risks to energy storage returns posed by the marketization of time-of-use tariffs but also successfully translates the traditional gas business's "channel advantage" into an "ecosystem advantage" for the new energy era.
Conclusion
In summary, the steady performance of TG Smart Energy in its 2026 interim results is by no means accidental. It is the outcome of the company proactively seeking change and precisely positioning itself amidst a pressured macro environment and a restructuring industry logic. The "unlocking existing potential" strategy in its core gas business safeguards its cash flow buffer, while the "light-asset operation" in its renewable energy segment opens up valuation upside. Looking ahead to the second half of the year, with international gas price volatility expected to ease, further deepening of domestic price adjustment mechanisms, and the maturation of the new energy power trading market, TG Smart Energy's "gas + renewable energy" dual-engine model is poised to release greater momentum. For the market, TG Smart Energy is not just a traditional utility company, but a comprehensive energy service provider with robust resource integration capabilities and digital operation skills. Within the grand narrative of the "15th Five-Year Plan" green transition, TG Smart Energy is steadily redefining its own investment value.