CF Energy Expands Its Battery Swap Business in Beihai City

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”) is pleased to announce that the Group has acquired 70% stake in a profitable local Beihai City electric (“EV”) vehicle battery swap station operator, Beihai Brighton Road New Energy Ltd. (the “Beihai Company”) in Beihai City, Gangxi Province, the PRC, for a consideration of RMB1.24 million with reference to the valuation of RMB 1.77 million for the Beihai Company.

The Company provided strategic advice and support to the Beihai Company in establishing the first two EV battery swap stations in Beihai City, and only completed the acquisition when the Beihai Company met all pre-set goals of the development plan. Since the first EV battery swap station became operational on May 23, 2022, by the end of October 2022, with both stations in operation, the Beihai Company had generated total revenue of RMB1.11 million and EBITDA of RMB0.33 million. The Beihai Company currently has 344 registered active taxis as its EV battery swap users with 90 more battery swap EV taxis expected to be added by early next year to a total of 434 taxis. There are currently 550 taxis in Beihai City in total, our clientele accounts for 62.5% of the market. The estimated 90 new battery swap EV taxis will bring the total market to 640 taxis, our market share estimated to be 67.8%. All of the taxis in Beihai City are battery swap cars, Only Beijing EV and Dongfeng EV are within the government’s supplier list for taxis.

To strengthen the financial position of the Beihai Company, the Group is currently in the final stage of raising RMB 14.0 million of long-term financing for the refinancing of the equipment and battery inventory, pending internal approval procedures of the lending finance institution.

The Company’s EV battery swap business development strategy in the Beihai City expansion has delivered successful results. This reported case may be viewed as evidence to show that CF Energy has the ability to capitalize its early mover advantage with accumulated extensive market developing and operating experience. Many cities of similar size and characters in China may present fresh new opportunities in the early development stage of the EV battery swap markets to the Company. While the Company will continue to grow its established EV battery swap markets in Sanya, Haikou, and Beihai City, it will keep its eyes open for good new opportunities in other cities.

About Beihai City

Beihai is a prefecture level city of Guangxi Zhuang Autonomous Region in southern China, an important node city of Beibu Gulf Urban Agglomeration and Guangxi Beibu Gulf Economic Zone. It has jurisdiction over 3 districts and 1 county, with a total area of 3,337 square kilometers. According to the data of the seventh census, as of November 1, 2020, the permanent population of Beihai City is 1,853,227.

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 [e-mail]

Charles WangExecutive Assistant to CEO & Chair of the [e-mail]

Frederick WongDirector of the [e-mail]

Mike LiuVP Capital [e-mail]

Forward-Looking Statements

Certain statements contained in this news release constitute forward-looking statements and forward-looking information (collectively, “Forward-Looking Statements”). 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. 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 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. 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 factors include, without limitation, 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 described herein. Accordingly, undue reliance should not be placed on its contents.

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