Furann Energy Group Co., Ltd. 2025 Annual Board of Directors Work Report

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In 2025, the Board of Directors of Foshan Rong Energy Group Co., Ltd. (hereinafter referred to as “the Company”) strictly complied with the relevant provisions of the Company Law, the Securities Law, the Rules Governing the Listing of Stocks on the Shenzhen Stock Exchange, the Self-Regulatory Guidelines No. 1 for Listed Companies on the Shenzhen Stock Exchange—Standardized Operation of Main Board Listed Companies, the Measures for the Administration of Independent Directors of Listed Companies, the Company’s Articles of Association, the Company’s Rules of Procedure for Board Meetings, and other applicable regulations. All members, adhering to a conscientious, diligent, and responsible working attitude, managed business with integrity, implemented standardized management, and effectively fulfilled the duties of the Board of Directors conferred by the shareholders’ meeting. During the reporting period, the Board of Directors earnestly implemented all resolutions of the shareholders’ meeting, actively promoted the implementation of resolutions of the Board of Directors, continuously standardized the Company’s corporate governance structure, ensured scientific decision-making and standardized operation by the Board of Directors, and promoted the steady and orderly development of the Company’s various business and management activities. The Company’s 2025 annual work report of the Board of Directors is hereby presented as follows:

I. Discussion and analysis of the Company’s 2025 operating performance

(1) Overview of operations

The Company is committed to becoming an outstanding international energy services provider. Against the backdrop of the current international energy structure shifting toward diversification, it builds an open and collaborative energy industry ecosystem with energy as its core business and technology as the core driving force. In the energy sector, the Company is based on its city gas business, and actively promotes energy services such as petrochemical products, hydrogen energy, thermal energy, photovoltaics, energy storage, green methanol, and others. In the technology sector, guided by “technology, energy saving, and environmental protection,” the Company focuses on cutting-edge technologies in areas such as SOFC solid oxide fuel cells, R&D and manufacturing of hydrogen-energy equipment, pipeline inspection, kiln thermal industrial equipment manufacturing, energy saving, and emissions reduction, carrying out frontier technology research and promoting the transformation of research results. In addition, the Company continues to explore other business layouts, actively expands extended businesses such as engineering services and living services, and strives to promote high-quality development of green and low-carbon energy.

During the reporting period, the Company continued to推进 adjustments and transformation of its traditional energy structure. Total assets were RMB 20.049 billion, up 3.31% from the beginning of the period. Total operating revenue was RMB 33.595 billion, up 6.35% year-on-year. Of this, revenue from the energy and chemical services business and other business was RMB 20.390 billion, up 20.50% year-on-year. Due to further expansion of business scale, the operating model continued to be optimized, with a focus on improving quality and efficiency. Net profit attributable to shareholders of the parent company was RMB 1.030 billion, up 20.74% year-on-year; net profit attributable to shareholders after deducting non-recurring profit and loss was RMB 0.979 billion, up 21.17% year-on-year. Operating net cash flow was RMB 1.898 billion, up 8.18% year-on-year; the cash flow situation was good. The total natural gas supply volume was 4.756 billion cubic meters-equivalent; among them, industrial and commercial and trading users accounted for 81%, residential gas users accounted for 4.27%, power plant users accounted for 13.33%, and delegated transportation volume accounted for 1.40%. Sales volume of equivalent oil products and chemical products was 2.4141 million tons, up 25.82% year-on-year.

(2) Major businesses, major products and their uses, operating models, market position, competitive strengths and weaknesses, and main performance drivers carried out by the Company during the reporting period

(1) City gas business

The Company has deepened its city gas business, continuously strengthening infrastructure construction to ensure gas supply capacity, and steadily and proactively expanding its gas business. It has established a natural gas business model integrating resource procurement, receiving, storage and transportation, and sales. The Company has certain competitive advantages in infrastructure, resource supply, customer structure, regional layout, and other aspects.

In terms of infrastructure, to strengthen infrastructure construction, ensure gas supply capacity, and also balance development and safety, the Company is focusing on the present while looking ahead. In 2025, it continued to推进 the construction of natural gas pipeline networks and stations, building a high-pressure system of “one network for the whole city,” enabling unified emergency allocation and integrated emergency reserve management for natural gas across the city, and improving the supply and dispatch capabilities of Foshan’s natural gas transmission and distribution system.

1）Well-developed pipeline networks with interconnected access

After years of development, the Company’s pipeline networks have mature regional municipal pipeline construction and have basically completed full coverage of major areas in its jurisdiction. It has a flexible, efficient, reliable, and safe multi-level transmission and distribution gas supply system. Foshan’s natural gas high-pressure system has been connected with multiple upstream pipeline networks, forming three pipeline routes for the north, west, and central to connect gas supply sources. Pipeline networks are interconnected among regions, with strong transmission and distribution and dispatch capabilities, as well as certain capability to respond and prevent. It achieves interconnected and inter-supportive and inter-guaranteed high-pressure pipeline networks across surrounding cities, and has built a domestic leading natural gas supply system. In September 2025, the Zhaoqing Gaoyao branch and distribution station successfully connected valve chamber No. 5 on the Guangnan branch trunk line of the national pipeline network, further providing reliable assurance for Gaoyao District’s gas demand.

2）Emergency peak shaving and stable supply guarantee

Based on its development positioning in city gas, the Company has established an independently controllable emergency reserve and peak shaving system to ensure gas supply safety. Currently, multiple towns and streets in Foshan have built LNG emergency distribution and peak shaving stations. It has formed an elastic development and adaptation capability suitable for external dynamic changes at the end of the pipeline hydraulic operating conditions, along the main pipeline routes, and in areas with concentrated gas consumption loads. When necessary, it can provide emergency peak shaving for Foshan’s natural gas, effectively reducing resource procurement costs while actively planning the Company’s own peak shaving and gas storage reserve project to ensure emergency supply under urgent circumstances. Combined with the high-pressure transmission and distribution system’s “one network for the whole city,” it improves reserve capacity, peak shaving capability, and emergency capability.

3）Intelligent pipeline networks to safeguard safety

In recent years, Foshan has proposed an overall development plan for the construction of “Digital Foshan.” Under the overall framework of smart city development, the Company, in line with the “smart gas” development requirements put forward in national and provincial gas development plans, continues to improve pipeline network operation at an advanced level by adopting the model of “smart integrated management + intelligent pipeline networks + smart stations.” It has established information technology platforms such as a user information management system, SCADA system, gas GIS system, smart pipeline network system, leak alarm online monitoring system, and gas dispatch management system. It builds a “smart pipeline network” system framework characterized by “networked equipment, intelligent monitoring, scientific management, and data visualization,” ensuring city safety and supporting city development services.

In terms of resource supply, the Company adheres to the people’s livelihood attribute of the city gas industry. It strives to improve the level of gas consumption for people’s livelihood, giving priority to increasing the natural gas penetration rate. At the same time, it increases efforts to promote the use of natural gas in fields such as commerce, industry, hydrogen production, and power, expanding the scope of natural gas utilization and consumption scale.

1）Diversified resource procurement for stable, solid supply

The Company continues to build a diversified gas source structure and maintain a solid resource保障体系. At present, it has formed a gas supply pattern with domestic resource supply as the main source and international resource supply as an effective supplement, with natural gas supply that is solid and stable. The Company actively explores long-term cooperation with suppliers at home and abroad. It has already signed natural gas procurement contracts with domestic upstream gas supply enterprises such as Guangdong Dapeng, PetroChina, CNOOC Gas & Power, and Sinopec, as well as international suppliers such as BP (China), Cheniere Energy, and Sinochem Singapore. The Company also cooperates with LNG suppliers at home and abroad to procure LNG as appropriate. By enriching the gas source structure, it effectively enhances the Company’s risk resilience in responding to fluctuations in market resources, providing stable gas source保障 for the Company’s development. Meanwhile, the Company strengthens cooperation with city gas companies in surrounding regions in areas such as resource allocation, mutual supply and mutual guarantee, and emergency peak shaving, further ensuring the Company’s gas supply safety.

2）Expand trading channels for complementary land and sea gas sources

The Company actively participates in international LNG trading and establishes and deepens cooperation relationships with upstream and downstream partners. The Company has obtained two international investment-grade ratings, Moody’s Baa1 and Fitch BBB+, further enhancing the Company’s international image and influence. These ratings fully reflect international rating agencies’ high recognition of the Company’s business development, operation management, profitability, and risk control, as well as their strong confidence that the Company will continue to maintain high-quality development in the future. This helps the Company further develop high-quality trading partners, expand international trading, and improve its bargaining power.

Regarding customer structure, under the national “carbon neutrality” background, the Company firmly grasps the window periods when the state rolls out various support policies, captures the demand of energy-consuming customers in its operating areas for diversified energy, and, through coordination among various businesses, deeply develops the integrated energy market in its operating area. It actively carries out businesses such as hydrogen energy, thermal energy, photovoltaics, and energy storage. It vigorously develops clean energy, strengthens the Company’s core competitiveness in natural gas, and achieves comprehensive and in-depth cooperation with users.

1）Strong cultivation of the industrial market

Guangdong Province is the first province in China whose total economic output exceeds RMB 1.4 trillion. Foshan, as the 17th city nationwide and the 3rd in Guangdong in terms of economic output exceeding RMB 1 trillion, is also one of the rare cities among trillion-level cities with an industrial share of over 50%. It holds an important position in the province’s overall development landscape. Benefiting from Foshan’s advantageous industrial scale layout, and drawing on decades of experience in deeply cultivating the city pipeline gas market, the Company has a rich downstream user structure and strong risk resilience. It forms a market pattern in which industrial users and residential commercial users complement each other and develop in coordination. Within its jurisdiction, it has mature and stable large customers such as in ceramics, glass, aluminum profiles, metal processing, textiles, home appliances, and more. The Company adheres to building core competitiveness by strictly controlling costs, so that unit operating costs are effectively reduced. The Company takes customer demand as the orientation, targets improving quality and efficiency, uses resource integration as the means, continuously consolidates its resource and channel advantages, deepens its “professionalized” operating strategy, insists on high-quality development, and focuses on energy consumption needs of various types of customers. It provides customers with “one-stop” energy services, helping them improve efficiency, reduce costs, and create value. In addition, based on changes in industry development and in combination with its own resource capabilities, the Company continues to optimize and innovate its business models, further enhancing customer stickiness.

2）Policy-driven leadership toward full effectiveness

In June 2024, the National Development and Reform Commission issued the “Natural Gas Utilization Administration Measures” (Order No. 21 of 2024), adjusting “city gas” users to “town gas” users and, at the same time, no longer emphasizing large and medium-sized cities. The Company actively expands and intensifies urban gas supply pipeline networks, in coordination with policy plans such as urban renewal, renovation and upgrading of rural industrial parks, and rural revitalization. It focuses on building gas pipeline support in industrial clusters, rural industrial parks, and old residential areas and urban villages with suitable conditions. It carries out village gasification work in different phases for different types of areas, promotes equalization of urban and rural services, and achieves pipeline coverage. In December 2024, the People’s Government of Guangdong Province issued the “Guangdong Province Air Quality Improvement Action Plan for Ongoing Improvement,” which stipulates that in key areas, for newly built, rebuilt, and expanded melting furnaces, heating furnaces, heat treatment furnaces, and drying furnaces, clean energy should be used, and—by principle—not coal, biomass, and other fuels. It promotes clean energy substitution across the province in glass, aluminum rolling, and steel rolling industries. The Company actively cooperates with the government to推进 the “clean energy” transformation work, focusing on solving issues such as enterprises’ energy-saving transformation, financial services, and capital cooperation, effectively helping enterprises transition smoothly. As national safety requirements for the catering industry gradually increase, the Foshan Housing and Urban-Rural Development Bureau issued a notice on the “Notice on the Issuance of the Implementation Plan for the ‘Bottle-to-Pipe’ (瓶改管) Work in Catering Premises in Foshan,” strengthening risk screening, governance, and source control in the gas use process for catering premises. The Company encourages public commercial users to replace bottled liquefied petroleum gas with piped natural gas. The Company strongly推进 the “bottle-to-pipe” work for catering customers, introducing preferential measures such as installment plans and leasing models for “bottle-to-pipe,” and promoting the use of efficient, safe, clean natural gas.

3）Gas-fired power development has potential

Foshan has already built and put into operation natural gas power projects such as the Fu Neng Power Plant, Huadian Shunde, Huadian Sanshui, and Ming Datang combined heat and power with cooling for heat supply. Compared with cities such as Guangzhou, Shenzhen, and Dongguan, there is still significant potential for further development of natural gas power generation facilities. On June 19, 2024, the National Development and Reform Commission issued the “Natural Gas Utilization Administration Measures” (Order No. 21 of 2024). Two additional natural gas power generation projects were added under the “priority category,” highlighting the potential for natural gas power generation development. According to the “14th Five-Year Plan for Energy Development of Foshan,” Foshan will accelerate推进 the construction of natural gas power plants, further enhancing Foshan’s power supply security assurance capacity.

In terms of regional layout, the Company has, in total, obtained 13 regional pipeline gas business franchise operation rights. Within Foshan, the Company centrally receives all piped natural gas entering Foshan’s geographic scope, and holds exclusive franchise operation rights for pipeline gas in Chancheng District, Sanshui District, Gaoming District, and Shunde District. Outside Foshan, the Company has obtained pipeline gas franchise rights in Nans Xiong City (excluding the supply of the “Nanxiong Gas Power Project” by China Datang Group Corporation), Gaoyao District of Zhaoqing City, the planned area within the Foshan (Yunfu) industrial transfer industrial park, Enping City (excluding Shahu Town and Hengbei Town), the administrative jurisdiction areas of Wuqing County in Hebei Province (excluding urban areas), the Gushui Taihe Industrial Park in Guangning County of Zhaoqing City, and the southeast area of Liuyang City in Hunan Province, among others. In regions where the Company has pipeline gas franchise rights, it sells natural gas to downstream users, meeting gas consumption needs across multiple fields including residents’ living and heating, industrial, commercial, power generation, transportation, and distributed energy.

(2) New energy business

1）Heating and cooling energy business

The Company actively推进 the expansion of the heating and cooling energy market within its gas operating areas. First, for distributed heating business, it mainly targets energy consumption needs in public service industries such as medical care, elderly care, and schools, formulates precise and scientific energy-saving measures, and provides diversified energy service solutions including energy management outsourcing, centralized heating, boiler transformation, and central cooling energy-saving transformation. Second, for centralized heating business, currently, it uses a “power plant抽气供热 as the主, and备用 gas-fired boilers as the supplement” model to deliver high-quality steam to heating enterprises surrounding the heating pipeline network. On the one hand, it transports steam produced by nearby coal-fired heat and power plants via steam pipeline networks to customers along the route and to the Sanshui Southwest Shuidu base; on the other hand, it supplements and reserves using natural gas boilers. By implementing centralized heating to reduce enterprise production costs, it simultaneously推进 the construction of steam branch pipeline networks, covering more industrial customers along the route. During the reporting period, the Company supplied customers with centralized industrial steam of approximately 1.0869 million tons, and provided heating (hot water) of approximately 1.3408 million GJ.

For distributed energy business, by further深化 natural gas utilization, the Company provides integrated energy services such as heat, electricity, and cooling to downstream industrial and commercial users. Currently, the Sanshui Shuidu distributed energy station project in which the Company participates in investing is under construction. The project plans to build 2×120-megawatt级 gas-fired steam combined-cycle co-generation units, with the main products being electricity and industrial steam. The designed production capacity is an annual power generation of 0.985 billion kWh. After being put into operation, it will support the promotion of centralized heating at the Sanshui Southwest Shuidu base and reduce the energy consumption cost of the Shuidu base.

2）Photovoltaics and energy storage business

Relying on its advantages in the gas business operating areas, the Company steadily推进 the development of distributed photovoltaic power generation. It selects high-quality energy-consuming customers to carry out photovoltaic energy cooperation, achieving mutual benefit and win-win outcomes. During the reporting period, the Company invested and built 1 distributed photovoltaic power station with a capacity of about 11MW. It cumulatively held more than 30 photovoltaic projects, and the cumulative installed capacity exceeded 47.6MW. In 2025, cumulative power generation was about 45.40 million kWh. In the power sales business, as power system reform advances and the power sales market gradually opens up, power sales business is gradually expanding into multiple fields such as integrated energy services, energy-saving and emissions-reduction consulting, and clean energy development. During the reporting period, the Company seized opportunities from power reform to carry out power trading, providing customers with personalized electricity usage plans and value-added services.

In energy storage and energy-saving business, the Company closely monitors industry technological innovation and cost changes, following government industrial policies supporting the orderly development of energy storage power generation, and relying on its gas business operating areas. It steadily expands cooperation on energy storage and energy saving with high-quality energy-consuming customers, providing customers with efficient energy services and energy-saving management, achieving efficient energy utilization and saving energy costs.

3）Green methanol business

Green methanol is a new type of environmentally friendly fuel produced using biomass feedstocks and renewable energy. Against the global backdrop of actively addressing climate change, green methanol, as a low-carbon and clean energy source, has broad application prospects. In the “15th Five-Year Plan” (15th Plan) green methanol is identified as a key area for clean energy and low-carbon chemical industry, carrying an important mission. Methanol is a liquid under normal temperature and pressure, requiring no low-temperature protection. As one of the world’s major bulk chemicals, it has outstanding advantages such as a mature industrial chain, convenient storage and transportation, and environmental friendliness.

In the shipping industry, green methanol contains no sulfur and emits low nitrogen oxides. Its carbon reduction capability is better than that of green fuels such as ammonia, hydrogen, and biodiesel. It also has advantages including high safety, strong controllability, a mature industrial chain, and convenient storage and transportation, and can be adapted to existing ship modifications. Under the backdrop of carbon reduction policies such as the IMO net-zero framework, the European Union carbon tax policy, and EU shipping fuel regulations, green methanol has received widespread attention in the shipping industry. Shipping giants such as Maersk have already重点 laid out projects, and green methanol has become a core alternative fuel for decarbonization in the shipping industry. In the road transportation sector, green methanol can not only be blended with gasoline and used in conventional internal combustion engine vehicles, but also be used directly in hybrid vehicles and fuel cell vehicles. In the aviation industry, through conversion, green methanol can serve as sustainable aviation fuel, providing environmentally friendly energy solutions for the aviation sector.

Green methanol relies on existing mature infrastructure and has conditions for large-scale promotion and application. Green methanol can directly drive decarbonization in shipping, power, transportation, and other fields as a low-carbon and environmentally friendly clean fuel. It can also act as an important chemical feedstock to drive decarbonization in industrial chains such as building materials, clothing, beverages, and chemical industrial products. In addition, it can serve as an ideal carrier for hydrogen energy, connecting key hydrogen storage and transportation links and solving the issue of new energy power consumption. The promotion and application of green methanol will not only help reduce greenhouse gas emissions in the transportation sector, but will also推进 the transition of the energy structure, contributing significantly toward achieving the global carbon neutrality goal. With technological progress and large-scale production, green methanol is expected to become an important pillar of the future energy sector.

Based on the broad prospects of green methanol, the Company cooperates with Hong Kong China Gas to leverage each party’s advantages in investment and construction, technical support, and market operations. The parties will stage investments to establish an investment platform, and work together across fields including production, investment development, and the coordinated construction of industrial chains for green fuel and chemical projects, to推进 the development of a green economy. The project’s planned total investment is RMB 10 billion. The Company will布局 green methanol production bases nationwide, building a green fuel and chemical supply pool with a combined production capacity of 1 million tons per year. During the reporting period, the Company’s subsidiary Foshan Lianke Siy Green Energy Co., Ltd. and Hong Kong China Gas jointly established VENEX Co., Ltd., and its subsidiary acquired 100% equity interest in Inner Mongolia Yigao Co., Ltd.

Inner Mongolia Yigao Co., Ltd. currently mainly engages in the production and sales of related by-products such as methanol, ethanol, light polyhydric alcohols, and dimethyl carbonate. Since 2022, it has obtained EU ISCC EU and ISCC PLUS international certifications for four consecutive years. It is a leading enterprise in mainland China that has obtained these two international certifications and has already produced green methanol at scale. Inner Mongolia Yigao has realized a green methanol production capacity of 50,000 tons per year and sold in batches. In the next stage, it will投入 funds to renovate existing methanol production lines, ultimately forming a green methanol production capacity of 300,000 tons per year. Meanwhile, VENEX Co., Ltd. plans to invest in the construction of a 200,000 tons per year green methanol project located in the Datang Chemical Park in Sanshui District, Foshan. The project is currently in its early-stage preparations. It has completed the listing and purchase of industrial land, signing of the land transfer contract, and payment of the land transfer fees. The construction period is expected to be two years. This cooperation implies that the Company will use green methanol project investment as an entry point to further布局 the green hydrogen-based energy industry, cultivate new businesses and growth points, and will be of positive significance for the Company’s future long-term sustainable development.

(3) Technology R&D and equipment manufacturing business

1）SOFC solid oxide fuel cells

SOFC is an efficient power generation device that converts the chemical energy of fuels (such as natural gas) directly into electrical energy through electrochemical reactions without undergoing a combustion process. Its operating principle is to utilize the characteristic of solid oxide electrolytes that conduct oxygen ions at high temperatures. Oxygen reacts in the air to generate oxygen ions. The oxygen ions pass through the electrolyte and react with the fuel to generate water and carbon dioxide. Reaction electrons form current through an external circuit to generate electricity. SOFC has advantages including high power generation efficiency, the capability for combined heat and power supply, a wide range of usable fuels (such as natural gas, biogas, hydrogen, ammonia, etc.), does not rely on precious metals, is clean and pollution-free, and is modular (enabling flexible expansion that matches customers’ electricity demand). It can be widely applied in distributed power generation fields such as data centers, hotels, hospitals, office buildings, and residential areas. At the same time, it also has substantial application potential in areas such as power capacity expansion, microgrids, smart grids, and decarbonization and cost reduction in the industrial sector, as well as leading the green transformation of the shipping industry.

The Company has assembled a professional SOFC R&D team with more than ten PhD holders and senior engineers as the core. The Company, together with domestic well-known SOFC stack leading enterprises and reputable overseas SOFC system design companies, jointly推进 the development of a 50kW SOFC system prototype. The prototype has already completed assembly and has achieved continuous operation. The Company is currently carrying out optimization, improvement, and iterative upgrades. In addition, the Company’s 300kW SOFC system project carried out at the Nangzhuang natural gas high-pressure station has been投入 for demonstration and application. The National High-Temperature Fuel Cell R&D Center in which the Company participates has been included in the National Energy Administration’s “14th Five-Year Plan” first batch of the “Race to Lead” list. As a core participating unit, the national-level project applied jointly by the Company with domestic SOFC stack leading enterprises, Tsinghua University, and others is currently undergoing acceptance. In the future, based on the optimization and improvement results of the demonstration projects and system prototypes, the Company will continuously 추진 domestic substitution of core components, ensuring the reliability, stability, and effectiveness of prototype operation and the supply of core components. After that, it plans to逐步 apply in scenarios such as data centers, waste treatment plants (biomass gas, biogas), and others. For SOFC projects, the Company has累计授权 36 invention patents, 67 utility model patents, and 19 software copyright registrations. It has also been recognized as Guangdong Solid Oxide Fuel Cell System Integration Engineering Technology Research Center and Guangdong Enterprise Technology Center. Additionally, the SOFC industry standards and multiple group standards participated in formulating have also been officially released and implemented.

2）Kiln thermal industrial equipment manufacturing and energy saving and emissions reduction

The Company actively responds to the national “dual carbon” strategic goals and the policy orientation for high-quality development of the manufacturing industry, focusing on energy saving and emissions reduction as well as digital empowerment. During the reporting period, the core businesses focus on the digital upgrading of ceramic green low-carbon technologies and equipment, as well as digital upgrading of manufacturing enterprises. Ceramic kiln digital intelligent energy-saving systems and high-efficiency thermal industrial equipment, through advanced combustion control, deep utilization of waste heat, intelligent temperature control optimization, and other technologies, significantly reduce energy consumption and carbon emissions during ceramic production, improve kiln operating efficiency and product quality, and help ceramic enterprises achieve green, low-carbon, and intelligent transformation. During the reporting period, through the contract energy management business model, the Company added multiple energy-saving transformation projects with digital intelligent systems for kilns. The Company’s kiln energy-saving transformation contract energy management projects累计 reached 19. The average energy-saving rate of accepted projects exceeds 7%, effectively enabling customers to achieve energy savings and carbon reduction.

3）Pipeline inspection

The Company takes pain points faced by the gas industry as its entry point, closely monitors the development trends of pipeline inspection and artificial intelligence technologies, and continuously研发 and optimize pipeline inspection and monitoring products. During the reporting period, the “Unmanned Aerial Vehicle Intelligent Patrol Inspection System” and the “Miniature Leak Detection UAV” independently developed by the Company achieved limited sales, and the “Dynamic AI Vision Patrol Inspection Equipment” achieved limited-scale promotion and application; it is currently in the early promotion stage. During the reporting period, the Company independently developed an “Intelligent Data Recorder” and an “Intelligent Polarity Drainage Flow Controller,” which are currently undergoing application testing and optimization. During the reporting period, the intelligent negative protection monitoring technology independently developed by the Company won the first prize of the Science and Technology Innovation Award issued by the Guangdong Province Measurement and Control Technology and Equipment Application Promotion Association. At the same time, this technology was jointly evaluated by the Guangdong Province Measurement and Control Technology and Equipment Application Promotion Association and the Guangzhou Instrument Association. The assessment concluded that the overall technology reached the international advanced level, and that some key technical indicators have reached the international leading level.

4）Hydrogen energy business

The Company closely focuses on the market demand and development trends of the hydrogen energy equipment industry, integrates resources from the China Civil Engineering Society’s Hydrogen Energy Facilities and Engineering Division and the China City Gas Hydrogen Energy Development Innovation Alliance, and promotes the localization and application of high-end hydrogen energy equipment. The Company, as the chair unit of the Hydrogen Energy Facilities and Engineering Division of the China Civil Engineering Society, led the successful application by the Society for a special topic titled “Research Report on Current Status and Trends of China’s Hydrogen Energy Industry Development.” This special topic is the only one that made it into the National Civil Engineering Society’s selection work for serving national strategic special topics across the country, providing professional support for the top-level design and policy formulation for the nation’s hydrogen energy strategy development. In terms of hydrogen energy infrastructure construction, the Company actively推进 the operation of Shunfeng hydrogen refueling stations, the Nangzhuang integrated energy supply station, and the Mingcheng integrated energy supply station, providing Foshan fuel cell vehicles with large-scale, high-stability hydrogen supply assurance.

In equipment manufacturing R&D, the Company continues to推进 R&D and innovation in the energy equipment sector. Its diaphragm compressor products independently developed and sold cover multiple pressure levels including 15MPa, 20MPa, 35MPa, 45MPa, 70MPa, 90MPa, and 100MPa. Currently, the diaphragm compressors of different models produced by the Company can be used for gas compression at commercial hydrogen refueling stations, in the chemical industry and electronic materials industry, and for pressurizing liquid hydrogen equipment in the aerospace field, among others.

5）Industrial carrier business

The Company independently invests in and builds a gas equipment industrial park. It targets high-quality suppliers upstream and downstream of the gas industry supply chain to推进 the agglomeration of the gas equipment industry within the park. The industrial park is located in the central urban area of Foshan, a pilot city for comprehensive reform of manufacturing industry transformation and upgrading. It occupies the prime intersection location of the “Guangzhou-Shenzhen-Hong Kong-Macao science and technology corridor + Pearl West advanced manufacturing industrial belt,” enabling access within 1 hour to major cities in the Greater Bay Area such as Guangzhou, Shenzhen, Hong Kong, and Macao. The industrial park covers approximately 68.5 mu, with a total planned construction area of 172,000 square meters. The total project investment is about RMB 700 million. The construction content includes industrial厂房, supporting office buildings, dormitory buildings, and other facilities. It started construction comprehensively in July 2024 and is expected to be completed in mid-2026. The industrial park has highlights such as “one large flat floor, long-span, high-floor heights, high load capacity, dual circular access roads, and boundless logistics operations,” providing high-quality development space for business segments such as the Company’s new energy, technology R&D, and equipment manufacturing.

(4) Energy and chemical services business

The Company deeply develops the energy and chemical services business in its operating regions, continuously focusing on pain points in customers’ energy consumption needs. It fully leverages advantages in energy infrastructure and resources, and coordinates with strong resources such as petrochemical storage, wharves, transportation, and others, to provide multi-tiered, personalized energy and chemical services to various customer types including central and state-owned enterprises, regional wholesalers, and service station terminals. In the future, the Company will actively build an integrated and one-stop service platform covering end-to-end production-marketing linkages, inventory management, logistics distribution, price management, and digital services. It is committed to becoming a national first-class energy and chemical services management provider. At present, the Company’s operating product categories include multiple subcategories such as natural gas, refined petroleum products, fuel oil, asphalt, biodiesel, and methanol. Its sales network mainly covers the Pearl River Delta region, with additional reach to coastal regions.

1）Petrochemical business

The Company invested in a comprehensive energy petrochemical storage base and a petrochemical wharf at the Xiaohu Island area in Nansha, Guangzhou. Among them, the storage base covers 750 mu and has a total storage capacity of 0.9183 million cubic meters, with 126 storage tanks of different capacities. It can efficiently load and unload and store various energy and chemical products, and can store up to 39 types of petroleum and chemical products. The petrochemical wharf has 11 berths and is the largest professional petrochemical wharf at the Pearl River estuary. The maximum loading and unloading flow rate reaches up to 3,000 m3/h. By leveraging the advantages of the Nansha storage and Xiaohu petrochemical wharf as a large-scale petrochemical storage base and logistics facility in the Pearl River Delta, the Company actively推进 energy services mainly based on refined petroleum products, fuel oil, methanol, biodiesel, and asphalt, gradually forming a supply network centered on Nansha storage. The Company has long carried out centralized procurement. By signing long-term purchase and sales agreements with large domestic and international refineries and resource traders, it further improves operational efficiency at the resource end. Relying on the core hub role of the Nansha petrochemical storage base, it connects with pickup points in Dongguan and Foshan to build a regional coordinated distribution network, achieving the sinking of refined petroleum product resources into terminal markets. At the same time, with efficient resource integration and standardized operation capability, it has gained strong recognition from its main customers, which are central enterprises. It has officially entered their list of qualified suppliers and has also initiated refined petroleum product supply, laying a solid foundation for deepening cooperation with central enterprises and enhancing market share. During the reporting period, Nansha storage successfully coordinated relevant central enterprises in the Nansha port area to开展 B24 biodiesel fuel oil injection business and bonded mixing business for high and low-sulfur fuel oils, helping carbon emission reduction and clean energy supply, and further推进 business innovation and practical exploration in the free trade pilot zone. During the reporting period, the sales volume of the Company’s equivalent oil products and chemical products was 2.4141 million tons, up 25.82% year-on-year.

2）Natural gas business

The Company has laid out its business around the natural gas industry chain, based on the domestic end natural gas consumption market. It established a Singapore trade platform entity and actively expanded its international LNG trading in the Asia-Pacific market, establishing and deepening cooperation relationships with upstream and downstream partners. The Company leverages its main businesses—city gas—and a broad base of industrial and commercial customers. With its own strong rating creditworthiness, funding acquisition, resource integration capabilities, among others, it aims to provide the customer groups of manufacturing industries in Foshan and even the Guangdong-Hong Kong-Macao Greater Bay Area with competitive “one-stop” energy services such as commodity resources, logistics, and warehousing. It expands operating scale, enhances its risk hedging capability across market cycles, and provides new momentum for the Company’s long-term development.

(5) Extended business

1）Engineering services business

The engineering services business covers gas engineering design and supervision, engineering construction, cost consulting, and other aspects, mainly providing supporting and assistance for energy businesses such as pipeline natural gas. The Company’s subsidiary Huachan Energy has Grade A (municipal industry—town gas engineering) professional design qualification and Grade A municipal public engineering supervision and residential building supervision qualification. It currently has pipeline pressure design permits for pressure levels GA1 (covering GA2), GB1, GB2, and GC1 (covering GC2). The design, supervision, and consulting business scope—including pressure levels, scale, and types—has been significantly expanded and enhanced. Its business scope has expanded from undertaking city gas pipeline design to station design, thermal energy engineering design, and industrial pipeline engineering design, as well as municipal public engineering construction supervision. It extends from purely engineering design to covering the entire lifecycle of engineering construction procedures, and provides technical services such as design, cost consulting, supervision, and consulting for gas engineering construction. The Company’s subsidiary Huareng Energy has Grade B municipal public engineering construction general contracting qualification, pipeline pressure installation qualification for GB1, GB2, and GC2, power facility operation (repair/testing) license qualification for Grade C, gas combustion appliance installation and repair qualification, and fire protection maintenance qualification. Its business scope has expanded from undertaking city gas engineering to include thermal energy engineering, industrial pipeline engineering, charging pile engineering, photovoltaic maintenance and repair engineering, fire protection maintenance and repair services, and other municipal facilities construction projects. It provides gas pipeline facility maintenance and repair services for various gas operators and pipeline gas users, and actively coordinates with the Company to推进 the extension of new energy businesses such as thermal energy and photovoltaics, participating in the construction of new energy infrastructure.

2）Living services business

The Company actively推进 the iterative upgrade of “Safety Services+.” Safety services have gradually expanded to cover residential users as well as industrial and commercial user groups, generating good social and economic benefits. For residential users, the Company builds a product matrix integrating safety monitoring and risk early warning, and upgrades insurance coverage content to make the service more caring and trustworthy. For industrial and commercial users, it transforms toward “Smart Safety Service Housekeeper.” It provides standardized safety packages for small and medium-sized merchants and customizes comprehensive “Safety + Maintenance and Warranty” solutions for industrial users. It simultaneously optimizes supporting insurance services and innovatively launches products such as “Annual Safety Packages” and “Maintenance Warranty Subscription” models, building an intelligent monitoring platform. With AI remote diagnostics and automatic dispatching, it improves service efficiency.

II. Daily work of the Board of Directors

(1) Board meetings convened

In 2025, the Company held 11 board meetings in total. The convening and meeting procedures, voting procedures, and the contents of resolutions all complied with relevant laws and regulations. The Board of Directors fully leveraged its role in the corporate governance system, and timely studied and decided on major matters of the Company, ensuring standardized operation and practical, efficient results. The meeting deliberated and heard about proposals including the Company’s investment matters, profit distribution, periodic reports, and amendments to the articles of association. Except for situations where certain related directors abstained from voting on relevant matters due to related-party relationships, all directors attended the meetings and voted in favor on all matters deliberated by the Board of Directors for 2025. There were no instances of abstention or voting against.

(2) Execution of resolutions of the shareholders’ meeting by the Board of Directors

In 2025, the Board of Directors convened and organized 1 annual shareholders’ meeting and 5 extraordinary shareholders’ meetings. The Board of Directors strictly complied with relevant regulations, performed its duties with full diligence, and fully implemented all resolutions of the shareholders’ meeting. Within the scope of powers granted by the shareholders’ meeting, the Board of Directors earnestly fulfilled its responsibilities, ensured that all proposals were effectively carried out and implemented, and effectively protected the lawful rights and interests of all shareholders.

(3) Operation of committees under the Board of Directors

1. Audit Committee of the Board of Directors

During the reporting period, the Audit Committee held 9 meetings. It strictly performed its duties in accordance with the Company Law, the Articles of Association, the work rules of the Audit Committee of the Board of Directors, and other relevant regulations, and earnestly deliberated important matters such as periodic financial reports, financial final accounts and budget reports, and internal control evaluation reports. It supervised the annual, semi-annual, and quarterly work plans and implementation status of the internal audit department. It tracked the deposit and actual use of募集 funds. It heard reports on the annual audit work of external audit institutions, evaluated their performance of duties, and deliberated on matters related to their reappointment. In addition, it also carefully deliberated proposals such as relevant profit distribution plans. The Audit Committee has always upheld the principles of diligence and responsibility, and seeking truth from facts. In guiding internal audit work, supervising and evaluating external audit institutions, and promoting the establishment and improvement of an internal control system, it effectively fulfilled its duties and effectively safeguarded the lawful rights and interests of the Company and all shareholders.

2. Strategic Committee of the Board of Directors

During the reporting period, the Strategic Committee held 4 meetings of the Board of Directors. It strictly carried out work in accordance with regulations such as the Company Law, the Company’s Articles of Association, and the work rules of the Strategic Committee of the Board of Directors, performing its duties conscientiously and diligently. Committee members conducted in-depth analyses based on the Company’s industry environment, industry development dynamics, and overall market trends, and, based on the Company’s actual operating conditions, carefully deliberated major matters such as the issuance of debt financing instruments and hedging and risk mitigation activities, providing strategic support for the Company’s continued stable development.

3. Remuneration and Assessment Committee of the Board of Directors

During the reporting period, the Remuneration and Assessment Committee held 5 meetings. It strictly carried out work in accordance with regulations such as the Company Law, the Company’s Articles of Association, and the work rules of the Remuneration and Assessment Committee of the Board of Directors, actively fulfilled its duties, and put forward reasonable suggestions. Based on the Company’s actual circumstances, committee members reviewed matters related to the Company’s equity incentive program, and conducted annual performance appraisals on the fulfillment of duties by senior management. It reviewed directors’ remuneration and the assessment scheme for senior management, and, on the basis of standardized operation, promoted the Company’s remuneration policy to be consistent with the Company’s development strategy.

4. Nomination Committee of the Board of Directors

During the reporting period, the Nomination Committee held 5 meetings. It strictly carried out work in accordance with regulations such as the Company Law, the Company’s Articles of Association, and the work rules of the Nomination Committee of the Board of Directors, performing its duties conscientiously and diligently. Based on the Company’s actual situation, it reviewed matters such as the election of a non-independent director and the nomination of the Company’s vice chairman, ensuring that nomination and voting procedures comply with relevant regulations, meet the conditions for appropriate qualifications for appointment, and have the capabilities and professional qualities suitable for the positions proposed.

5. Risk Management Committee of the Board of Directors

During the reporting period, the Risk Management Committee held 3 meetings. It strictly carried out work in accordance with regulations such as the Company Law, the Company’s Articles of Association, and the work rules of the Risk Management Committee of the Board of Directors, performing its duties conscientiously and diligently. It heard about the Company’s risk control in areas such as finance, safety, business operations, and hedging and risk mitigation, and analyzed and assessed the Company’s compliance status and risk management efficiency, providing support for the Board of Directors to fulfill its risk management functions.

6. Environmental, Social and Corporate Governance (ESG) Committee of the Board of Directors

During the reporting period, the Environmental, Social and Corporate Governance (ESG) Committee held 1 meeting of the Board of Directors. It strictly carried out work in accordance with regulations such as the Company Law, the Company’s Articles of Association, and the work rules of the Environmental, Social and Corporate Governance (ESG) Committee of the Board of Directors, performing its duties conscientiously and diligently, and further推进 the integration of ESG concepts into the governance system and business system.

III. Performance of duties by independent directors

There are 3 independent directors in the Company, including 1 accounting professional. The independent directors strictly complied with relevant provisions of the Company Law, the Shenzhen Stock Exchange’s Self-Regulatory Guidelines No. 1 for Listed Companies—Standardized Operation of Main Board Listed Companies, the Measures for the Administration of Independent Directors of Listed Companies, the Company’s Articles of Association, and the Independent Director Work System, and faithfully, diligently, and independently performed their duties. In 2025, the independent directors attended all board meetings and relevant special committee meetings. They actively organized and convened special meetings of independent directors, and there were no instances of absence without cause. Before board meetings, the independent directors conducted careful pre-review of decision matters of the Board of Directors, and engaged in thorough communication with the Company’s senior management on matters such as the Company’s production and operation, annual report audit, financial management, ordinary related-party transactions, profit distribution, and appointment of audit institutions. Based on their own professional expertise, they issued professional opinions and suggestions to the Board of Directors, playing an active role in the Board’s scientific decision-making, and effectively safeguarded the Company’s interests and those of investors.

IV. Evaluation of the performance of duties by directors

During the reporting period, all directors of the Company actively performed their duties in accordance with laws and regulations, regulatory requirements, and the relevant provisions of the Company’s Articles of Association. They made independent judgments and decisions, and played an appropriate role in major decision-making processes, ensuring efficient and standardized operation of the Board of Directors and successfully completing the assessment targets. The Remuneration and Assessment Committee of the Company’s Board of Directors evaluated the performance and duty fulfillment of directors. The results of each director’s duty performance in 2025 were “qualified.”

V. Information disclosure

During the reporting period, the Board of Directors of the Company complied with laws and regulations and regulatory requirements such as the Company Law, the Securities Law, and the Administrative Measures for Information Disclosure of Listed Companies. It comprehensively strengthened the information disclosure system, optimized the mechanism for management of insiders and persons with knowledge of inside information, and continuously improved the quality of information disclosure. The Board of Directors of the Company has always adhered to the principles of truthfulness, accuracy, completeness, timeliness, and fairness. It promptly released important information related to the Company’s operations and decisions, effectively ensuring that all shareholders and investors can obtain timely, accurate, and complete updates on the Company. It is committed to maintaining the lawful interests of investors and maximizing investor benefits.

VI. Investor relations management

In 2025, the Board of Directors continued to place investor relations management work in an important position. It followed guidance principles of openness, fairness, and impartiality, and systematically推进 communication and coordination with investors. Through initiatives such as online performance briefings, investor collective reception days, and using multiple channels including telephone, email, interactive platforms, as well as online and offline research activities, it maintained close and smooth communication with investors. These measures not only enhanced investors’ understanding and recognition of the Company’s performance, governance structure, development strategy, and operating conditions, but also enabled the Company to timely listen to and earnestly研究 the valuable opinions of investors on the Company’s operations and development as well as capital operations. The Company is committed to building and maintaining long-term, stable, and mutually trusting relationships with investors, and continuously deepening two-way communication.

VII. Major work of the Board of Directors in 2026

In 2026, the Board of Directors will continue to strengthen the core role of governance, and earnestly fulfill its day-to-day responsibilities, making scientific and high-efficiency decisions on major matters. Combined with the Company’s actual circumstances and development strategy, the Board of Directors will adhere to the purpose of being responsible to all shareholders, striving to complete all operating targets successfully and realize the maximization of the Company’s value and shareholders’ interests. We will further推进 the improvement of the Company’s standardized operation and governance level, strictly comply with laws and regulations, properly fulfill information disclosure obligations, and ensure that disclosed information is timely, true, accurate, and complete. At the same time, the Board of Directors will focus on strengthening investor relations management, and actively communicate and interact with investors through diversified channels. By optimizing disclosed content with investors’ needs as the core, it will continuously improve the pertinence and effectiveness of information disclosure.

Board of Directors of Foshan Rong Energy Group Co., Ltd.

March 23, 2026

Securities Code: 002911　　　　　　　　　　　　　Securities Abbreviation: Foshan Rong Energy　　　　　　　　　　　　　Announcement No.: 2026-016

Foshan Rong Energy Group Co., Ltd.

Summary of the 2025 Annual Report

I. Important notice

This summary of the annual report is derived from the full annual report. To comprehensively understand this Company’s operating results, financial condition, and future development plans, investors should carefully read the full annual report published in the media designated by the CSRC.

All directors attended the board meeting deliberating on this report.

Non-standard audit opinion notice

□Applicable　RNot applicable

Profit distribution proposal or capitalization of capital reserve proposal for the reporting period deliberated by the Board of Directors

RApplicable　□Not applicable

Whether capital reserve is used to increase share capital

□Yes　RNo

The profit distribution proposal approved by this board meeting is: based on 1,298,394,217 shares, cash dividends of RMB 2.7 per 10 shares for all shareholders (including tax), bonus shares of 0 shares (including tax), and no capitalization of capital reserve to increase share capital.

Preferred share profit distribution proposal for this reporting period approved by the Board of Directors

□Applicable　□Not applicable

II. Basic information of the Company

1、Company profile

2、Brief description of the Company’s major businesses or products during the reporting period

(1) Overview of operations

The Company is committed to becoming an outstanding international energy services provider. Against the backdrop of the current international energy structure shifting toward diversification, it builds an open and collaborative energy industry ecosystem with energy as its core business and technology as the core driving force. In the energy sector, the Company is based on its city gas business, and actively promotes energy services such as petrochemical products, hydrogen energy, thermal energy, photovoltaics, energy storage, green methanol, and others. In the technology sector, guided by “technology, energy saving, and environmental protection,” the Company focuses on cutting-edge technologies in areas such as SOFC solid oxide fuel cells, R&D and manufacturing of hydrogen-energy equipment, pipeline inspection, kiln thermal industrial equipment manufacturing, energy saving, and emissions reduction, carrying out frontier technology research and promoting the transformation of research results. In addition, the Company continues to explore other business layouts, actively expands extended businesses such as engineering services and living services, and strives to推进 high-quality development of green and low-carbon energy.

During the reporting period, the Company continued to推进 adjustments and transformation of its traditional energy structure. Total assets were RMB 20.049 billion, up 3.31% from the beginning of the period. Total operating revenue was RMB 33.595 billion, up 6.35% year-on-year. Of this, revenue from the energy and chemical services business and other business was RMB 20.390 billion, up 20.50% year-on-year. Due to further expansion of business scale, the operating model continued to be optimized, with a focus on improving quality and efficiency. Net profit attributable to shareholders of the parent company was RMB 1.030 billion, up 20.74% year-on-year; net profit attributable to shareholders after deducting non-recurring profit and loss was RMB 0.979 billion, up 21.17% year-on-year. Operating net cash flow was RMB 1.898 billion, up 8.18% year-on-year; the cash flow situation was good. The Company’s total natural gas supply volume was 4.756 billion cubic meters-equivalent, with industrial and commercial and trading users accounting for 81%, residential gas users accounting for 4.27%, power plant users accounting for 13.33%, and delegated transportation volume accounting for 1.40%. Sales volume of equivalent oil products and chemical products was 2.4141 million tons, up 25.82% year-on-year.

(2) Major businesses, major products and their uses, operating models, product market standing, competitive strengths and weaknesses, and main performance drivers of the Company during the reporting period

1. Major businesses, major products and their uses, operating models, product market standing, competitive strengths and weaknesses of the Company during the reporting period

(1) City gas business

The Company has deepened its city gas business, continuously strengthening infrastructure construction to ensure gas supply capacity, and steadily and proactively expanding its gas business. It has established a natural gas business model integrating resource procurement, receiving, storage and transportation, and sales. The Company has certain competitive advantages in infrastructure, resource supply, customer structure, regional layout, and other aspects.

In terms of infrastructure, to strengthen infrastructure construction, ensure gas supply capacity, and also balance development and safety, the Company is focusing on the present while looking ahead. In 2025, it continued to推进 the construction of natural gas pipeline networks and stations, building a high-pressure system of “one network for the whole city,” enabling unified emergency allocation and integrated emergency reserve management for natural gas across the city, and improving the supply and dispatch capabilities of Foshan’s natural gas transmission and distribution system.

1）Well-developed pipeline networks with interconnected access

After years of development, the Company’s pipeline networks have mature regional municipal pipeline construction and have basically completed full coverage of major areas in its jurisdiction. It has a flexible, efficient, reliable, and safe multi-level transmission and distribution gas supply system. Foshan’s natural gas high-pressure system has been connected with multiple upstream pipeline networks, forming three pipeline routes for the north, west, and central to connect gas supply sources. Pipeline networks are interconnected among regions, with strong transmission and distribution and dispatch capabilities, as well as certain capability to respond and preven