Soaring new LNG on-board cylinder orders with a 13-fold increase year-on-year

(14 June 2023, Hong Kong) — CIMC Enric Holdings Limited and its subsidiaries (collectively, “CIMC Enric” or “Group”) (Hong Kong stock code: 3899.HK) are pleased to announce that a subsidiary, Zhangjiagang CIMC Sanctum Cryogenic Equipment Co., Ltd. (“CIMC Sanctum”) and Shijiazhuang Enric Gas Equipment Co., Ltd. (“Shijiazhuang Enric”), have secured over RMB100 million in orders for LNG on-board cylinders of 1,000L and above. The cumulative new orders for cylinders from January to May 2023 reached nearly RMB200 million, representing a nearly 13-fold increase year-on-year and over 36% growth compared to the same period in 2021. With the steady recovery of the heavy-duty truck market, the Group has recorded significant increase in orders and deliveries of LNG on-board cylinders.

According to invoicing data from Fangde.com (excluding exports), domestic natural gas heavy-duty truck sales reached 8,004 units in April 2023, marking a staggering year-on-year increase of 478.3%. From January to April 2023, domestic natural gas heavy-duty truck sales amounted to 24,000 units, with a net increase of 16,000 units compared to the same period last year, representing a cumulative year-on-year growth of 195.4%.

The National Bureau of Statistics reported that as of 31 May 2023, LNG prices stood at RMB4,000 per ton, experiencing a 53% decrease from the peak in 2022 (RMB8,437 per ton) and a 42% decrease from the beginning of 2023 (RMB6,842 per ton). Additionally, diesel prices remained high while the gas-to-diesel ratio fell to 0.52 from a peak of 1.06 in 2022. These dynamics highlight the economic advantages of natural gas heavy-duty trucks, driving a rapid recovery in demand.

The recovery of China’s imported LNG market is expected to drive down LNG prices in coastal areas, improving the economic viability of natural gas heavy-duty trucks. Moreover, in November 2022, the Ministry of Ecology and Environment and 15 other departments jointly issued the “Action Plan for the Control of Diesel Truck Pollution,” reinforcing the management and control of diesel truck pollution. The national implementation plan for carbon emission peak in industries such as building materials, non-ferrous and other industries also call for the accelerated phase-out of old National IV standard diesel heavy-duty vehicles. Overall, the demand for natural gas heavy-duty trucks is expected to surge, presenting significant opportunities for the Group’s sales of LNG on-board cylinders. 

Mr. Ju Xiaofeng, Vice President and Head of Energy Equipment and Engineering Business Centre at CIMC Enric, stated, “The policy requirements for diesel heavy-duty trucks to switch from National V to National VI standard at the beginning of the year, as well as the continued decline in LNG price, and the further widening of oil and gas price differentials have promoted the rapid recovery of the natural gas heavy-duty truck market. The demand for LNG on-board cylinders for the Group has exceeded supply, and new orders have shown a significant year-on-year increase. At present, the two factories are optimizing resource allocation, improving production efficiency, and improving delivery capabilities to meet customer needs. It is expected that the demand for other natural gas terminal application equipment will usher in rapid growth in the second half of the year. On the other hand, the Group’s LNG related business covers the entire upstream, midstream and downstream industry chain. It has also obtained multiple large-scale engineering orders for LNG peak-shaving and storage stations in the year’s first half. With the recovery of China’s economic growth and the decline in LNG prices, domestic natural gas consumption will continue to grow. The market demand for the Group’s LNG equipment and engineering projects is also expected to continue improving.”