ENN's interest-bearing debt exceeds 25 billion yuan; controlling shareholder received over 4.8 billion yuan in dividends in two years

September 7, 2026 — ENN Natural Gas Co., Ltd. (New奥股份), a leading natural gas company in China, has released its investor relations activity record, addressing investor concerns over declining domestic gas sales volumes and significantly reduced capital expenditure in the first half of 2026.

For the first time, the company reported a simultaneous decline in both revenue and net profit attributable to shareholders in H1 2026, largely due to the divestiture of its methanol business.

Earlier, the company had planned to privatize its subsidiary ENN Energy Holdings Limited. However, the HK$60 billion asset restructuring failed after the company failed to secure both overseas listing approval from the China Securities Regulatory Commission (CSRC) and in-principle approval from the Hong Kong Stock Exchange Listing Committee. This failure has also dashed the company's short-term prospects of reaching a market capitalization of RMB 100 billion.

Once regarded as a blue-chip stock with stable revenue and profit growth, New奥股份 has recently experienced frequent declines. The question now is whether the company can restore profitability on its own after the failed restructuring.

1. Weak Performance in Pan-Energy Business Leads to Revenue and Profit Decline

In the first half of 2026, New奥股份 reported disappointing results:

• Revenue: RMB 63.99 billion, down 3.03% year-on-year
• Core net profit (excluding non-recurring items): RMB 1.742 billion, down 27.86% year-on-year

The company's revenue is primarily composed of two segments: natural gas and pan-energy. The natural gas business remains the core, contributing RMB 53.67 billion in H1 2026, or 83.87% of total revenue.

The natural gas segment performed relatively well, with total gas sales reaching 20.467 billion cubic meters, up 0.7% year-on-year. Revenue from this segment increased by 2.78% compared to H1 2025 (RMB 52.219 billion, after inter-segment elimination).

Thus, the overall revenue decline was not due to the core natural gas business, but rather to:

• The sale of the methanol business
• A decline in pan-energy business revenue

Methanol Business Sale

In June 2025, the company sold an 85% stake in its subsidiary Xineng Energy Co., Ltd., which had an annual methanol production capacity of approximately 1.2 million tons. After the sale, New奥股份 retained only a 15% stake, and Xineng Energy was deconsolidated from its financial statements.

Since the sale occurred in June 2025, the methanol business's revenue from January to June 2025 was fully consolidated, amounting to approximately RMB 2.485 billion (classified under energy production). After the sale, this revenue stream was lost, contributing to the decline in consolidated revenue.

Pan-Energy Business Decline

The pan-energy business generated RMB 6.415 billion in H1 2026, down 8.0% year-on-year.

Pan-energy refers to the company's integrated energy supply services for industrial parks, factories, and commercial buildings, including electricity, steam, hot water, chilled water, compressed air, as well as supporting photovoltaic, energy storage, gas boilers, and smart energy management platforms.

In H1 2026, weak orders and lower operating rates at some manufacturing plants reduced demand for steam, electricity, and cooling, directly impacting revenue.

Profit Impact

The sale of the methanol business and the decline in pan-energy revenue also weighed on profits. For example, the energy production segment contributed RMB 351 million in operating profit in H1 2025, but none in H1 2026.

As a result, core net profit fell to RMB 1.742 billion, down 27.86% year-on-year.

Image source:摄图网, based on VRF agreement

Longer-Term Trends

The instability is not limited to H1 2026. Due to slow gas sales growth and price volatility, New奥股份's revenue and profit have been inconsistent in recent years:

| Year | Revenue (RMB bn) | Core Net Profit (RMB bn) | |------|------------------|--------------------------| | 2022 | 154.2 | 4.671 | | 2023 | 143.8 | 2.459 | | 2024 | 135.9 | 3.711 | | 2025 | 131.5 | 4.407 |

2. Premium Privatization of Affiliate Fails; HK$60 Billion Deal Terminated

Amid stagnant growth, New奥股份 sought to expand through restructuring.

In March 2025, the company announced plans to privatize ENN Energy Holdings Limited via its wholly owned subsidiary, Xineng Hong Kong.

ENN Energy is another natural gas company listed in Hong Kong, controlled by the same ultimate owner, Wang Yusuo. It operates as a terminal distribution platform (urban gas utilities), serving residential and industrial customers.

New奥股份, by contrast, focuses on purchasing and transporting natural gas from upstream producers and distributing it.

In 2019, New奥股份 had already acquired a 32.81% stake in ENN Energy for approximately RMB 25.8 billion.

Image source:摄图网, based on VRF agreement

In March 2025, New奥股份 planned to fully privatize ENN Energy through a combination of share issuance and cash payment, with a transaction value of nearly HK$60 billion. After privatization, ENN Energy would delist and become a wholly owned subsidiary, while New奥股份 would achieve a dual A+H listing.

Operationally, the privatization would have fully integrated the LNG terminal, imported gas sources, and urban gas distribution chain, streamlining future capital expenditure.

Given the better liquidity and higher valuations of A-shares, a successful privatization would have also boosted the market value of Wang Yusuo, the former richest man in Hebei Province with a net worth of nearly RMB 70 billion.

However, in June 2026, New奥股份 announced the termination of the privatization. According to the company, after nearly a year of effort, it failed to obtain both the CSRC's overseas listing approval and the Hong Kong Stock Exchange Listing Committee's in-principle approval, with the timeline for regulatory approval remaining highly uncertain.

The company stated that during the restructuring period, various regulatory constraints limited its management and operational arrangements. Considering macroeconomic conditions, funding, and shareholder interests, it decided not to extend the timeline and terminated the transaction.

Regulatory Scrutiny

During the privatization process, the Shanghai Stock Exchange (SSE) issued inquiries regarding:

• The privatization pricing
• Funding sources
• Financial security

At the time, ENN Energy's last closing price before suspension was HK$59.45 per share, while the privatization price was approximately HK$80 per share — a premium of 34.57%. The SSE questioned this high premium. New奥股份 responded that HK$80 was only a theoretical reference value, not a fixed price.

Additionally, the acquisition required a maximum cash consideration of approximately HK$18.35 billion. Since the company's cash on hand was insufficient, it would have needed to rely on debt financing. If completed, the company's debt-to-asset ratio would have risen to approximately 67%, increasing short-term repayment pressure.

Image source:摄图网, based on VRF agreement

After failing to secure regulatory approvals, the privatization was abandoned. However, the company plans to have its overseas subsidiary increase its holdings of ENN Energy's Hong Kong-listed shares (by no more than 2% within 12 months).

The termination marked the failure of a nearly HK$60 billion capital operation by former Hebei richest man Wang Yusuo, who also lost the opportunity for a short-term increase in personal wealth.

3. Interest-Bearing Debt Exceeds RMB 25 Billion; Dividends Still Total Over RMB 6.7 Billion in Two Years

Despite losing the opportunity for increased market value, Wang Yusuo has still benefited handsomely from New奥股份's dividends over the past two years.

According to Wind data:

• 2024 dividend: RMB 3.184 billion (70.86% of net profit of RMB 4.493 billion)
• 2025 dividend: RMB 3.526 billion (75.33% of net profit of RMB 4.683 billion)

As the ultimate controller, Wang Yusuo holds a combined 72.47% stake in New奥股份 through ENN Group International Investment Limited, New奥 Holdings, New奥 Technology, Langfang Heyuan Investment Center (Limited Partnership), and Hebei Weiyuan Group Co., Ltd.

This means that of the total RMB 6.71 billion in dividends paid in 2024 and 2025, over RMB 4.8 billion went to entities controlled by Wang Yusuo.

Notably, even while pursuing the privatization of ENN Energy, the company still distributed over RMB 3.5 billion in dividends in 2025.

Image source:摄图网, based on VRF agreement

High Debt Levels

Due to the capital-intensive nature of the industry, New奥股份 carries a substantial amount of interest-bearing debt.

As of December 31, 2025, the company's total short-term borrowings, long-term borrowings, and non-current liabilities due within one year exceeded RMB 25 billion.

However, operating profits have been used more for dividends than for debt repayment. The company has stated that new borrowings were partly used to repay USD-denominated debt to hedge against exchange rate risk, while the high dividend payout ratio was in line with its fixed dividend policy for 2023–2025.

Dividend Policy

Under the 2023 board-approved dividend policy:

• Annual cash dividend: no less than 10% of distributable profit
• Cumulative cash dividends over three years: no less than 30% of the average annual distributable profit over the same period

In 2023, the company paid a dividend of RMB 2.814 billion, representing a payout ratio of 39.68% — already exceeding the minimum requirement. In 2024 and 2025, the payout ratio exceeded 70%.

Under the new policy for 2026–2028, New奥股份 will pay an annual cash dividend of no less than 50% of core profit. Given stable operating profits of around RMB 4 billion per year, the company is expected to pay at least RMB 2 billion annually in dividends over the next three years.

Based on the current market capitalization, analysts forecast an annual dividend yield of approximately 5%.

The biggest beneficiary of this high yield is Wang Yusuo, who controls 72.47% of the company and will receive the majority of dividends.

Institutional Interest

The high dividend yield has attracted institutional investors seeking stable, high-yield, low-volatility stocks.

As of June 30, 2026:

• National Social Security Fund: holds 48.18 million shares (1.56% of total shares)
• China Life Insurance products: hold 98.27 million shares (3.17%)
• Various funds: hold 110 million shares (3.59% of tradable shares)

With significant institutional buying, New奥股份's stock price has remained stable. Despite stagnant revenue and profit growth, the share price rose from approximately RMB 14 at the end of 2022 to RMB 18.63 currently. During this period, Wang Yusuo not only received billions in dividends but also benefited from the increase in his shareholding value.

Image source:摄图网, based on VRF agreement

Outlook

After the failed privatization of ENN Energy, and given the slow growth in natural gas sales volumes, New奥股份 is unlikely to achieve breakthrough revenue or profit growth in the coming years.

However, by positioning itself as a high-dividend, high-yield stock, the company has attracted strong institutional interest, from which Wang Yusuo has benefited significantly. At the same time, management should consider how to identify new growth drivers to push the company's performance further.

Cover image source:摄图网, based on VRF agreement.