Towngas Smart Energy reported a profit increase last year amid a slowing economy, as the subsidiary of Hong Kong's sole gas provider reaped the benefits from its investments in renewable energy in mainland China.

Net profit rose 2 per cent from a year earlier to HK$1.6 billion (US$206 million), the company said in a Hong Kong stock exchange filing on Friday. Revenue increased 7.4 per cent from 2023 to HK$21.3 billion last year.

Its core operating profit surged 34.5 per cent to HK$1.6 billion, benefiting from the strong performance of its renewable energy business and the steady profit growth in its gas business owing to the "favourable cost pass-through outcomes", the company said. Full-year net profit for the renewable energy business soared fivefold to HK$479 million, it said.

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"We are delighted [that] the company has achieved such great performance under the current operating environment," CEO Peter Wong Wai-yee said during an earnings call. "We expect our renewable energy business to be developed in an orderly manner with double digits increase going forward."

Towngas CEO Peter Wong Wai-yee. Photo: Jonathan Wong alt=Towngas CEO Peter Wong Wai-yee. Photo: Jonathan Wong>

The company declared a final dividend of HK$0.16 per share and a one-off special dividend of HK$0.03 per share "in light of encouraging performance of the renewable energy business", it said. That represents an increase of 18.8 per cent compared with last year.

The company's shares fell 0.3 per cent to HK$3.28 on Friday before the earnings were announced.

Towngas' Ma Tau Kok Control Centre at To Kwa Wan. Photo: Sam Tsang alt=Towngas' Ma Tau Kok Control Centre at To Kwa Wan. Photo: Sam Tsang>

"In 2024, the domestic economy of the Chinese mainland was under pressure [due to] the complex and volatile international landscape and the challenging business environment," chairman Lee Ka-kit said in a statement. "However, benefiting from the country's resolute promotion of environmental protection and its "30-60" dual carbon goals, new quality productive forces have injected a strong momentum for high-quality development, in particular the demand for green and clean energy increased."

"Not only do our advantages and strengths lie in these areas, they also present opportunities for growth, creating a favourable environment and growth opportunities for the group's business in the long term," Lee added.

As a unit spearheading its parent company's transition towards clean energy, Towngas Smart Energy has been accelerating its deployment in renewable energy in mainland China, thanks to the country's massive solar and wind buildout under China's goals of peaking carbon emissions by 2030 and reaching net zero emissions by 2060.

A Towngas customer centre in Hong Kong. Photo: Handout alt=A Towngas customer centre in Hong Kong. Photo: Handout>

By the end of 2024, China's cumulative installed capacity of renewable energy has risen 25 per cent from the previous year to reach 1,889 gigawatts, making the country the world's largest developer of renewable energy, according to a January announcement by the National Energy Administration.

Towngas Smart Energy said it has invested in more than 1,000 renewable energy projects in 24 provinces, autonomous regions and municipalities in mainland China as at the end of 2024.

The accumulated grid-connected installed capacity of its distributed solar photovoltaic projects reached 2.3GW, and Towngas signed contracts for over 400,000 kilowatt-hours of industrial and commercial energy storage projects.

The green hydrogen project is located within the SENTX Landfill. Veolia will install pipelines at the existing biogas treatment plant to transport the biogas to the green hydrogen production facility. Photo: Towngas alt=The green hydrogen project is located within the SENTX Landfill. Veolia will install pipelines at the existing biogas treatment plant to transport the biogas to the green hydrogen production facility. Photo: Towngas>

Its parent company China and Hong Kong Gas, known simply as Towngas, has also been developing renewable energy to support its goal of reaching net-zero carbon emissions by 2050, the same time Hong Kong reaches carbon neutrality.

To achieve that goal, it has committed to using low-carbon fuels, including green naphtha and green hydrogen. It has a target to cut the carbon intensity of the gas it supplies by 36 per cent by 2035 from 2019 levels.

In January, Towngas signed a memorandum of understanding with Singapore's marine fuel and logistics provider Global Energy Trading to develop green methanol supply chains in Asia to support the region's green transition in the maritime industry.

Global Energy, the first company in Singapore to own and operate dedicated bunkering tankers for methanol, provides methanol bunkering services in the region. It delivered over 4.7 million tonnes of marine fuels in 2024. Photo: Towngas alt=Global Energy, the first company in Singapore to own and operate dedicated bunkering tankers for methanol, provides methanol bunkering services in the region. It delivered over 4.7 million tonnes of marine fuels in 2024. Photo: Towngas>

It also signed an agreement in June last year with Veolia, the French conglomerate that treats water, waste and energy, to develop Hong Kong's first green hydrogen project. The venture will produce clean hydrogen by converting biogas from a landfill site in Tseung Kwan O.

"The complex geopolitical landscape and the global economy will continue to present challenges to the business environment in the near term," Towngas Smart Energy said. "The healthy development of the city-gas business will be supported by energy-friendly policies at the state level."

This article originally appeared in the South China Morning Post $(SCMP)$, the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2025 South China Morning Post Publishers Ltd. All rights reserved.

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