CF Energy Business Update

Markham, Ontario, CANADA


TORONTO, April 23, 2021 (GLOBE NEWSWIRE) -- Today, CF Energy Corp. (TSX-V:CFY) (“CF Energy” or the “Company”; together with its subsidiaries, the “Group”), a leading new energy service provider in the People’s Republic of China (the “PRC” or “China”), announced the following business update:

Abolishment of Certain Pipeline Connection Related Services Charges to Customers in Sanya
The Company was notified by the regulatory officials in Hainan Province that, with retroactive effective to March 1, 2021, certain service charges relating to the connection services for the distribution of natural gas to customers in Sanya will be abolished. The new rules will impact certain of the Company’s pipeline connection fees and meter upgrade fees chargeable to their customers going forward and the Company estimates a reduction of around 2% to the revenue of the Group for the 2021 year as a result of this regulatory change. The Company continues to expand its marketing and sales efforts in anticipation of high regional economic growth driven by the government’s International Free Trade Zone development policy which, if successful, are expected to offset the anticipated revenue reduction resulting from the recent regulatory change. By growing its customer base, optimizing district gas supply and operational costs, the Company retains its focus on achieving healthy growth in Sanya’s natural gas distribution business for the coming years.

Haitang Bay Integrated Smart Energy Project
The Company is on track to complete its preparatory work for phase one of the Haitang Bay Integrated Smart Energy Project by June and to commence operations in early Q3 of 2021. Management continues to work closely with its project partners to advance the project as quickly as possible and will provide timely update(s) on progress as required.

Meishan Smart Energy Project
The Meishan Smart Energy Project successfully completed its test run and preparatory work before the Chinese New Year holidays, as planned. The project commenced operations in March and, as more customers adopt the program, it is expected to improve the district’s energy consumption efficiency, reduce local air pollution and generate revenue growth to the Company.

Electric Vehicle (“EV”) Battery Swap Business Stations
The Group currently has two electrical vehicle battery swap stations (the “EV Battery Swap Station”) in operation in Sanya City. The third EV Battery Swap Station has been set up in Zhuhai City and will soon be operational. The development schedule for the first EV Battery Swap Station in Haikou will be determined in due course.

Modest Investment in a Leading EV Battery Swap Technology Company in the PRC
The Company has entered into an agreement to acquire approximately 3.43% of the total equity shares of Blue Valley Intelligence Technology Co. (“BVIT”), a privately held EV battery technology development and service company in China, for a consideration of RMB13,040,000 (approx. $2,561,886 CAD).

BVIT primarily develops advanced EV battery swap and energy storage/redistribution technologies for the Chinese EV market. BVIT’s key investors include Beijing Blue Valley Electric Vehicle Tech. Co., SK Innovation (SKI) and Contemporary Amperex Technology Co., Limited (CATL) (the largest EV battery manufacturer in China). BVIT is currently CF Energy’s business partner and equipment supplier of the EV Battery Swap Stations and the investment in BVIT will further enhance the Group’s involvement in the fast-growing EV battery swap business in China.

The China Automobile Industry Association (“CAIA”) projects that 18.26 million EVs will be on-road in China by 2024. Moreover, the CAIA projects that 13.7 million EV owners in China will likely not have private charging units. Finally, the BVIT estimates that there may be 4 million battery-swap-type EVs on-road in China by 2024.

Termination of a subsidiary’s operation
The Group’s non-wholly owned subsidiary, Hebei Riheng Clean Energy Co., Ltd. ("Riheng"), in Shijiazhuang City, Hebei Province, has since its establishment in 2018 been providing point-to-point supply of natural gas in the form of LNG under various LNG supply distribution contracts to ceramic factories and industrial parks in Hebei Province.

In the 2020 year, the Group realigned its future business strategies with major focus on the development of clean energy solutions with high growth potential, including the integrated smart energy and electric vehicle EV battery swap segments, and made the first move into the EV Battery Swap Station business in May 2020. Such strategic focus realignment is in line with and ahead of the pronounced policy focus on clean energy and development of EV segment under the China Central government’s 14th Five Year Plan released in March 2021. As Riheng’s business and operating model no longer aligns with the Group’s new business focus and growth expectations, in the best interests of the Group, the Group made the decision to terminate the operation of Riheng and direct its future resources toward key projects that are with higher growth potentials and in line with the China Central government’s future development policy focus going forward.

About CF Energy Corp. (Previously known as: Changfeng Energy Inc.)
CF Energy Corp. is a Canadian public company trading on the Toronto Venture Exchange (“TSX-V”) under the stock symbol “CFY”. It is an integrated energy provider and natural gas utility/distribution company in the PRC. CF Energy strives to combine leading clean energy technology with natural gas usage to provide sustainable energy for its customer base in the PRC.

CONTACT INFORMATION

Corporate Investment Relations
investor.relations@changfengenergy.cn

Charles Wang
Executive Assistant to CEO & Chair of the Board
zhaoyu.wang@changfengenergy.cn

Frederick Wong
Director of the Board
fred.wong@changfengenergy.cn

Mike Liu
VP Capital Market
mike.liu@changfengenergy.cn

Forward-Looking Statements

Certain statements contained in this news release constitute forward-looking statements and forward-looking information (collectively, “Forward-Looking Statements”), including statements with respect to the government policy and regulatory changes, the anticipated impact to the Company’s business of such government policy and regulatory changes, future results of the business, expectations on the success of initiatives and when such initiatives will become operational, expectations regarding economic growth and government policy in jurisdictions where the Company carries on business, the growth of the Company’s customer base, the ability of the Company to optimize gas supply and operational costs, the ability of the Company’s projects to improve energy consumption efficiency in the districts it operates in, reduce local air pollution and generate revenue growth to the Company and expectations regarding the future market in China for EVs, private charging units and the future number of battery-swap type EVs in China in the future. All statements, other than statements of historical fact, included or incorporated by reference in this document are forward-looking statements —including statements regarding activities, events or developments that the Company expects or anticipates may occur in the future and the impact of government policy and regulation on the Company’s operations and results of operations. These forward-looking statements can be identified by the use of forward-looking words such as “will”, “expect”, “intend”, “plan”, “estimate”, “anticipate”, “believe”, “continue”, other similar words and/or the negatives thereof. No assurance is given that the plans, intentions, estimates or expectations or assumptions upon which these forward-looking statements are based will prove to be correct and the forward-looking statements included in this news release should not be unduly relied upon. Though management believes that the expectations outlined in such forward-looking statements are reasonable, there can be no assurance that such expectations will materialize. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the future events and trends discussed in this press release may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Such-looking statements are not a guarantee of performance and involve known and unknown risks, uncertainties, assumptions, and other factors that may cause the actual results, performance or achievements to deviate materially from the anticipated results, performance or achievements or developments expressed or implied by such forward-looking statements. These risks and factors include, without limitation, risk that the global economy, industry, or the Company's businesses and investments do not perform as anticipated, risks of compliance with laws and regulations that currently apply or become applicable to the business, risks that revenue or expenses estimates may not be met or may be materially less or more than those anticipated, changes in government policy or regulation or the application of such policies or regulations, the failure of the Company to complete its investment in BVIT, reduced demand for EV vehicles in China, increased demand for private charging units for EVs, a reduction in battery-swap type EVs in China, low reginal economic growth, significant and continuing adverse changes in general economic conditions or conditions in the financial markets. Readers are cautioned that all forward-looking statements involve risks and uncertainties, including those risks and uncertainties detailed in the Corporation’s filings with applicable Canadian securities regulatory authorities, copies of which are available at www.sedar.com. The Company urges readers to carefully consider these factors. The forward-looking statements included in this news release are made as of the date of this document and the Company disclaims any intention or obligation to update or revise any forward-looking Statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities legislation. This news release neither constitutes an offer to sell nor a solicitation of offers to buy any of the securities of the Company.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accept responsibility for the adequacy or accuracy of this release.