About JY GAS Company

We are a natural gas operator located in Gaomi City, Weifang City, Shandong Province. We have entered into a license agreement with the Gaomi Municipal Administration, according to which we have exclusive rights to operate natural gas sales and related businesses within the administrative district of Gaomi City (including urban and rural areas). At the last practical date, the operating area under our concession was equivalent to about 70% of the total administrative area of Gaomi City. We have over 16 years of operating experience in the natural gas industry and are committed to supplying high-quality and safe natural gas to the public in Gaomi City. During the track record period and until the last practical date, we mainly generated revenue from the sale of natural gas. The natural gas we sell includes piped natural gas, compressed natural gas, and liquefied natural gas. Pipeline gas sales are our main business. Our pipeline gas suppliers are CNPC and Shandong Shihua (50% owned by Sinopec), which have each entered into a master agreement and a series of actual procurement agreements with us to purchase pipeline gas. These agreements ensure that we can enjoy a stable supply of pipeline gas. Our urban pipeline network lays the foundation for our pipeline gas sales business. Our pipeline gas is mainly sold to retail customers such as residential, commercial and industrial pipeline gas end users. During our track record period, we also sold piped natural gas to two wholesale customers through our urban pipeline network. One was a gas supplier in the neighboring city of Changyi, and the other was a gas filling station operator in Gaomi City. These customers purchase pipeline gas from us for resale. We also sell compressed natural gas and liquefied natural gas as vehicle fuel to retail customers at compressed natural gas and liquefied natural gas filling stations. Gaomi Jiaoyun Shihua Natural Gas Co., Ltd Jiaoyun Shihua is one of our operating subsidiaries. It was established as a limited company in China on April 7, 2013, with an initial registered capital of RMB 30,000,000, to be paid in cash. On March 18, 2016, JTD Shihua's registered capital increased proportionately by RMB 5,000,000. After this increase in registered capital was completed, JTCC Shihua was still held 70% and 30% by JTCC Natural Gas and Shandong Shihua respectively. On January 25, 2014, Jiaotong Shihua obtained a gas business license to operate compressed natural gas sales, and has since commenced and continued its compressed natural gas sales operations.