Ladies and gentlemen, good evening. Welcome to Citi Conference Call with ENN Energy. Pierre Lau is the moderator for today. Over to you, Pierre. Good evening. Thank you for taking time out of your busy schedule to join the conference of ENN Energy. This is Pierre Lau, China Equity Strategy and Asia, Head of the Clean Energy and Utility Research of Citigroup. ENN Energy has already reviewed the operation data for the third quarter of twenty twenty-four. We are very honored to have seven representatives of the management of ENN Energy. And first, Mr. Zhang, CEO, and also the executive president, Mr. Liu, and also Mr. Wang, CFO, and also the VP, Mr. Chen, and Ms. Huang, the assistant to the president, and also Ms. Karen Liu, Chief Director of the IR and ESG, and also Ms. Chelsea Sun, Deputy Head of the IR.
The management will walk us through the latest operation data of the first quarter of twenty twenty-four. Now I would like to hand over to Ms. Sun to share with us the business review of the third quarter of twenty twenty-four. If you have not received the briefing and the PPT of the Q3 performance, please send me your emails and I will forward the email, the PPT to you. Now, I would like to hand over to the management to talk about the operating highlights of the third quarter. Respected investors, dear analysts and dear cooperation partners, good evening. Welcome to the Q3 twenty twenty-four conference call of ENN Energy. This is Chelsea Sun, the Deputy Head of the IR. Now, I would like to report to you the performance of ENN Energy in the first three quarters of this year.
For the first three quarters' performance, the data has been in alignment with our annual guidance, which well demonstrated our commitment and our achievements. In terms of the double carbon goal and also the Carbon Neutrality and also the carbon emission reduction, we have well addressed the needs of the natural gas and also different kinds of the renewable energy sector. ENN Energy has well adjusted different kinds of the new opportunities by capturing the fundamentals, which are solid for our company and have achieved very good growth. In the first three quarters of this year, our retail gas sales volume increased by 4.8% to 18.819 billion cubic meters.
Also, the sales volume of gas to the CNI customers recorded a growth of 5.7% to 14.843 billion cubic meters. The gas sales to residential customers increased by 3.4% year on year to 3.748 billion cubic meters. The Group's installed base daily capacity for newly developed C&I customers reached 11.133 million cubic meters. In the first three quarters, we have achieved a dollar margin of CNY 0.54, and we will continue with our endeavor in the fourth quarter by our continuous development in the integrated energy segment and also the value-added business to achieve our guidance. According to the accumulated operating data in October, our growth in October is expected to reach 6%.
Our new connection business has also been scaling new heights. In the first three quarters of this year, we have achieved very high connection number and also the value-added business reach out to over 4.26 million existing customers, resulting in an increase of 25,000 year on year. We have maintained very good services providing to the customer, and we have registered high efficiency in our overall management. In the first three quarters, we have seized all the market-oriented opportunities and tried to be deeply engaged in providing more services to the customer, like the industrial park and also the other kinds of the sci-tech park, et cetera, and other kinds of the campus and also the To-B environment. We have reached very good development, integration from low-carbon source, grid, and storage.
In the first three quarters, we have achieved very good developments in the integrated energy business, and also in terms of the integrated energy, the sales volume has increased by 21.4% on a year-on-year comparison, reaching 29,668 million kilowatt hours. For our other business, like smart home business and also value-added business, we have widened our product portfolio relating to the intelligent products and also the other kinds of the highly digitalized products. We have also other kinds of the engagement in the renewable sectors, like those kind of ES and also the PV-related segments, et cetera, which also generate higher number of the power generation, reaching a higher number of the kilowatt hours. At the same time, we have well improved our comprehensive competitiveness.
With our further development, it is expected that the integrated energy segment is going to achieve new heights. In terms of our value-added business, we have now more than 30 million gas household customers, and we have increased the number of the penetration rate of our VAB of the existing customer. We aim to achieve faster development with better quality. In the first three quarters, we have our value-added business reach out to over 2.46 million existing customers. And also, in terms of this kind of selling of the intelligent cooking utensils or cooking equipment or different types of the kitchenware, the sales volume and the shipment volume has increased by around 8%, and these are very important value-added business segments. We try to widen the section of the customer's profiling.
We try to seize all these opportunities and to capture those opportunities in each of the niche segments to launch more attractive products and solutions to better cater the needs of the customer, to increase their convenience for their life, and also to empower their daily life. With our listed entity with the stock code 2688, our development model has been conducted on a trajectory of increase the value-added business offering to the customer, both to the big business and to the customer. We have increased our synergy in the natural retail gas business and also value-added business and also the integrated energy business. We have achieved very good synergy among the three major business segments. With our concerted effort from the top to the bottom, we are very confident achieve the annual guidance.
Last but not the least, I would like to thank you for your continued support and endorsement for ENN Energy. We will spare no effort and keep track on the development of the utilization of the renewable energy. Thank you for your listening. Thank you for your time. We are very happy to answer your questions. Thank you. Now, we can take your questions. English questions are welcome to be sent to pierre.lau@citi.com. Thank you. Before we take the questions from the investors, here are some questions from the moderator. The first question about the integrated energy business. For the IE business, in terms of the sales in the first three quarters of this year, the increased margin was 21.4%.
It seems that compared with the previous year or compared with the first half of this year, and it seems that the growth rate of the IE business seems to be slowing down. So what is your assumption of the growth rate of the integrated energy business for the fourth quarter? How can you achieve the annual guidance for the growth rate of the IE segment, aiming a relatively slowing down development rate of the integrated energy segment? What will be your coping measures? Thank you. We are waiting for the management to answer. Thank you for your question, Pierre. In the third quarter, compared with the first two quarters, there has been lower growth rate of the IE segment.
It is due to seasonality, because in the third quarter, some of the business or sub-segments under the integrated energy are under the off-season, they have been showing some of the down, downward trend. That means for some of the sub-segments of the IE, traditionally, the Q3 is the off-season for those kind of sub-segments. So that is the first reason. The second reason is that for the other types of the segments under the IE, there are different types of the arrangement relating to the power generation and also the energy storage as the sub-segments under the integrated energy, and they also present different types of the growth margin. However, for the majority of the sub-segments, for all, for the highest, growing segments under the IE, they present higher growth margin than the other sub-segments of, integrated energy segment.
That is why you can see some of the variable development rate or growth rate of the IE business in the first three quarters. I want to ask a further question relating to dollar margin. Just now, you mentioned RMB 0.54 has been the dollar margin in the first three quarters. I would like to ask, what is your outlook for the dollar margin in the fourth quarter? And what are the key influential factors for the existing maintenance of the dollar margin? Thank you. Thank you, Pierre, for your question. I think this question is very important. It is also of common concern among majority of the investors.
In the first three quarters, we have a relatively satisfactory maintenance of the dollar margin, combining our development in the natural gas business and other kinds of the business, including our diversification relating to the procurement of the LNG from the upstream suppliers. For this year, we have also made some of the pricing adjustment, and also there have been adjustments relating to the LNG supply from the overall supply market. And mainly all those kind of variable reasons, and we have maintaining the dollar margin for the first three quarters at a level of 54.5% for the whole year. We would like to maintain around 10% of growth for our retail gas volume for the whole year. Thank you. We have the first question from the line of Song Yinyan from CMBI. Thank you.
We have the first question from the main line. You can go ahead. Thank you. We are waiting for the Mandarin line to have the questions to be raised. You can go ahead, the investor on the main line. We are waiting for the first investor from the main line. Yes, go ahead, please. Management, good evening. This is Song Yinyan from CMBI. I have one question for the management. The question is about the CNI customers, the business expansion. Compared with last year, there has been minor moderation or reduction for the CNI customer, and this year there has been recovery in both the gas sales volume to the residential customers and also CNI customer.
I would like to ask the momentum for the recovery and also the business to the power plant, especially different kinds of the power plants, like those kind of, peak shaving power plants. What is your outlook in the business recovery to the 2B business or the CNI customer? Thank you for your question. In the overall CNI customer, we have been adopting diversified and very flexible strategy to strengthen our communication with the customer, and also we proceed from the actual needs from the customer and have taken multiple measures in coping with those kind of, differentiated demand. We try to provide more added value to them. We are also diversifying the gas supply to us. That is why in all those kind of, tailwinds, we have well increased the number of the connection to the newly developed customer, especially the CNI customer.
So that is why we have also realized the growth of the natural gas sales to the CNI customer by 5.7% in the first three quarters of this year. We are going to further tighten up our communication and maintain high-frequency discussions with our customer to keep closer with the customer and to further reinforce our cooperation relationship with the customer to maintain our further growth. At the same time, we are also deeply aware that there are other kinds of the SME players among the non-CNI customer. For the medium, small, and micro business, we believe those kind of to-b customers are very prospective. At the same time, we are eyeing for more opportunities in those regards.
Regarding for the To-B customer, like the power plant customer, they actually are bigger in terms of the overall operation size, we try to deliver the best-in-class and top-quality services to them. We have been maintaining very good relationship with the power plants customer. However, we believe that the number of the power plant customers can have a further potential growth in terms of the overall number for the acquisition and also the retention of the customer. This will be a very important driver for our sustainable growth. Thank you. Thank you. I'm good here. We are waiting for the next question. English questions are welcome to be sent to pierre lau@citi.com. The next question is from Zhu Ziyu of HSBC. Over, go, over to you. Thank you. Could you be closer to the microphone, dear investor? Can you hear me loud and clear?
Please be closer to the microphone. Thank you, management, for the opportunity. I have two questions. The first question: regarding the dollar margin in the first three quarters, 0.54, which is in line with the whole year's guidance. So do you think that in the fourth quarter, you can achieve 0.54 yuan dollar margin? But traditionally speaking, dollar margin will be a little bit lower than the first three quarters in winter, so what is your take on that? The second question is: it seems that in the third quarter, the natural gas sales volume to the CNI customers has been presenting a lower growth rate than the growth rate in the second quarter. Could you explain the rationale behind which subsegment is the driver, the commercial sector or the industrial customer?
So what is your outlook for the natural gas sales volume to the CNI customer in the fourth quarter? Thank you for your question. I would like to take your question. Since we are cooperating with some major key players, like those key e-commerce players, and these are also very important players in different types of the major to-b segments. And for example, we have been cooperating with one major e-commerce player, and we have also rearranged some of the details in this cooperation. And in those kind of cooperation, because the business volume with that customer is very huge, and also there has been certain impact to this kind of overall gas sales volume, and also the growth rate of the natural gas sales volume to the CNI customer recently.
In terms of those kind of price spreads, we have been doing what we can and take multiple measures to strike a better balance among different types of influential factors, like the major petro suppliers, like the three major big oils. That is why we have been maintaining very good relationship with the upstream suppliers, and also, we are also in active communication with the major To-B customers. So that is why it is due to the changes of their own business operation and the reshuffling of the operation strategy, it is quite normal that this will exert some of the impact to the business volume with them. In terms of the winter season, you have been mentioning, you mentioned that it is traditionally the season in the fourth quarter that we witness a lower dollar margin than the previous quarters.
I think that, even amid some of the headwinds, we are trying our best to cope with those kind of headwinds because we have very good fundamentals, and also we are maintaining the current momentum. Thank you. I would like to add some point to your second question. In the third quarter, in terms of the growth of the natural gas sales volume, the growth rate has been lower than the growth rate in the second quarter. Here is the rationale, as it is known to all, in the coastal region, like in Guangdong, Fujian Province, it is mainly driven by the property sector, the last recovery in the property sector. So there has been some of the overhaul and some of the suspension of the operation of some of the 2B customer or some of the CNI customers.
So that is why this kind of customer have been the suppliers for the property sector due to the shortage of the recovery momentum for the property sector, and that is why they are also suffering certain kind of the shortage of the demand or lesser demand scenario. That is why our business will also have some influence from this kind of 2B or CNI customer. But for the whole year, we are also very confident that we can achieve the growth of the sales volume to the CNI customer by around 5%. Thank you. The next question is from Li Jingyun. Thank you. Our next question is from the Ming Lai. English questions are welcome to be sent to Pierre. Go ahead, please. Thank you, dear management. Thank you for your time. I have three questions.
The first question, in terms of the procurement price in winter, what is the price hike, and how much is this kind of price hike, coverage out of your total contract, volume? And also, in terms of the demand outlook in the coming winter, what is your outlook for the demand in the coming, heat supply season, and what is your prospect for the growth margin? And, for your share repurchase, and what is the current development? I think these are also the common concern of a lot of investors about the share buyback. Thank you. For the gas price in the coming winter, it is also influenced by the policies that are overriding the upstream and also other kinds of the influential factors. Compared with last year, I think the pricing mechanism is friendly to us at the time being.
At the unit price of around $75, and there is a minor change of around $2.9-$3. I think that this kind of price change is also acceptable and friendly for the potential supply to our own customer. Regarding the prediction of the demand for the coming winter, we believe that the demand will remain to be steady green. According to our current collected information, we believe that there will not be major uncertainty or headwinds that would put further constraint on the demand.
According to the data from the state power or the state grid power corporation and other types of the grid operators, we believe that the supply and also the demand of the natural gas in this coming winter will be relatively matched, and also the change of the demand volume in the coming winter will not be very significant, and it will be moderate and mild if there are any changes. Thank you for your question. From the perspective of the management, of course, we cannot give you the definite data in terms of the prediction of the demand in the coming winter. We do not have the crystal ball. There may be some of the variables that will be in play.
However, I would like to say that, from our past accumulated fundamentals and from our operation trajectory, we believe that we can well power through all those kind of uncertainties regarding to the changes of the upstream supplies of the natural gas, and also to power through other kinds of the uncertainties, if there is any. For the overall demand outlook for the natural gas consumption, we believe the overall demand will be at least as flat as we had last year, and also for the current gas price from the upstream suppliers. The previous colleague in the management has mentioning the changes of the price hike. That is a little bit minor change, and we are also foreseeing the price range will be around RMB 75-80.
Regarding the repurchase mechanism, of course, we are also considering the other kinds of the repo program, and also we are proceeding from our current business operation. For example, we have different types of the R&D within our current development plan. We are also having some of the setup of the new facilities and equipment, like the research laboratory, to better support our R&D, to maintain the sustainability of our business. So that is why we will consider our actual operation before we make any share buyback or repurchase program. The next question is from the investor of BofA. Three questions. The first question is about the cost pass-through. So in the third quarter, it was 59. How about the comparison with the first half of this year? So the first question is about the cost pass-through.
The second is about the ASP change. The third is about the procurement cost. In the fourth quarter, in the third quarter, do you have an apples-to-apples comparison in terms of your procurement cost in terms of the natural gas compared with last year? Thank you. Thank you for your question. I'm going to take your question. For the third quarter, we have also unveiled different types of the breakdown analysis, and also for our disclosure of the information for the first quarter, we have also covered some of the background information that may influence the cost pass-through. But for the actual implementation of the cost pass-through, we need to proceed from the actual situation, like in Hunan Province, or in different regions in China.
We need to be highly variable and highly flexible, and also very differentiated in terms of the cost pass-through, and also we hope that 80% of our existing projects can be covered by the cost pass-through mechanism, but we need to be very regional specific in terms of the implementation of the pass-through. In the first quarter, compared with the first half of this year, the ASP has not been presenting much change, according to the regional breakdown of our newly connected customers, so that is why, in the ASP scenario, in the first quarter, it has been very similar to the ASP in the first half of this year.
In terms of the procurement cost of the natural gas, I think there are also, not much change relating to the procurement cost, from the upstream suppliers in comparison between the first half of this year and also the third quarter. So that is the answer from the management. So a follow-up question: compared with 2023, on the comparison, in the comparison in Q4 of 2024 and Q3 of 2023, and what is the comparison result? And there is a reduction of the ASP in the third quarter of this year, if it is compared with the third quarter of the previous year in 2023. So there is a minor reduction of the ASP by CNY 0.10. The reduction is CNY 0.10 for this year. Thank you. So what is the major reduction of the ASP reduction compared with last year?
Because the margin, the dollar margin, has been increased by four cents. Is it the main trigger for the different ASP between the last year and also this year? For the change of the dollar margin, the increase of the dollar margin by four cents, it is also influenced by other types of the operation strategies, like the better optimization of the procurement cost. Thank you. Thank you. The next question is from Albert in Morgan Stanley. Thank you. Over to you, Albert. Thank you, management. This is Albert. One question. Just now Mr. Wang Dongzhi has mentioned some of the basic scenario. So I would like to ask that, in terms of integrated energy business or pan-energy business, what is the CapEx for the IE?
I understand that IE only occupy a relatively small proportion out of your total revenue. And also, I understand that you have set very clear guidance for the IE business segment for the whole year. If the revenue generation for the IE is lower than your guidance, will this impact your CapEx setting for IE segment next year? And what is the overall CapEx for IE this year in 2024? The next question, by the end of Q3, and what is the LNG trading net profit for you? Thank you. We are waiting for the management to answer the question.
In terms of related to the business of IE, in the interim results announcement, we have also maintained our development in terms of the top line and also the development outlook for the IE project. We are also expecting bigger and more momentum for the IE business in the foreseeable future. We have also widened the coverage of the customer portfolio, especially the to-B business or the IE business. In terms of CapEx, we have been making every preparation we make and also increase our readiness in terms of the support for our CapEx and spending, especially for some niche segments like IE. We have also increased the leverage in some of the financial channels. In terms of our financial or financing arrangement, we try to take the holistic picture in mind and also the actual need of different segments of our business.
We are also considering other subsegments, like the ES, energy storage, and also the PV sectors, et cetera. So PV and also ES are also the niche segments for us under IE. That is why, for the development of the segment of the integrated energy, we are arranging ample CapEx for IE, so you can feel assured towards that. Thank you. Regarding for the second question of our - perhaps I would like to make some points, relating to the CapEx of IE. When we are promulgating the CapEx, we would like to be closer to the highest level or the maximized level of our presumption or assumption. In terms of the promulgation of the CapEx, of course, we are prudent and discreet, but we would like to proceed each possible factors when we are promulgating the CapEx for IE.
At the beginning of this year, we had a very good prospect, and we believe that the development outlook for then will be very sanguine for IE. And in the coming quarters, the development of IE have been presenting a lot of new momentums, and it is true, and it is for real, and its development is becoming more diversified. However, under the subsegments of IE, it is presenting different kinds of the ASP and also different growth margins among different subsegments of IE. That is why we are also making flexible arrangements relating to the to the breakdown spending of the CapEx of the IE and subsegments under IE.
In terms of the LNG business or the overseas trading of the overseas business, we have been making different kinds of the hedging and different types of the arbitrage relating to the LNG trading, with around CNY 280 million revenue before tax. So that is the latest development relating to the LNG trading. Of course, at the beginning of this year, we set a kind of guidance of CNY 300 million for this kind of revenue of LNG trading. So our actual performance has been in line with our prediction or guidance that was set at the beginning of this year. English questions are welcome to be sent to pr.lau@citi.com. Thank you. The next question is the investor from J.P. Morgan. Over to you. Thank you. Go ahead, please. Thank you. I would like to be brief.
I have three questions. The first question regarding for the IE segment. For IE, according to our own knowledge, by the end of last year, by Q4 of last year, the sales volume of the IE has been very good, around 100 million kilowatt hours by the end of last year, the sales volume of IE. So for 2024, if you are going to meet the annual guidance, some of the sales volume of IE, what kind of growth rate you need to achieve for the fourth quarter of the sales volume of IE? More than 10%? Higher than 10%? So for IE, in the first and the fourth quarter, what is your expectation, and what is your take of the ASP and growth margin of IE? The first question is relating to dollar margin.
Just now, you mentioned that, according to this kind of calculation in Q3, the dollar margin was around CNY 0.55, in second quarter, CNY 0.61. In the comparison between Q2 and Q3, in terms of dollar margin, what was the trigger behind this kind of difference of the dollar margin in the two quarters? And what have been the influential factors for a lower dollar margin in Q3 than Q2? So in Q4, just now, you mentioned that for the LNG price, and there is no very significant reduction of the LNG price. So what is the rationale behind that? Next question is related to the VAB, value-added business. I understand that it is not convenient for you to provide very detailed numbers, but what is your take for the future growth of the value-added business? Thank you.
I would like to take your question. Just now, you mentioned the growth of the integrated energy business. There are different types of influential factors. First, it is due to seasonality. For IE business, in Q1 and Q4, it is the peak season due to seasonality, and there has been different kinds of the demand generated from the heat supply. So that is why there has been better development in Q1 and Q4 for IE. For the ongoing installed capacity for the IE, it has reaching more than 30 megawatts. So this is already a very high number in terms of the installation capacity for the existing projects of the IE. We are also having other kinds of the micro IE projects, which will cover different 2B business.
Also, they are expected to cover other types of the C&I use or the residential or community use in the foreseeable future, apart from the expansion in the to-B customer.... That is why we believe that although there are some of the unevenly distributed growth rate among the four quarters, but the overall growth rate of, for the IE for the whole year can still be in line of our annual guidance. In terms of the growth of the business, we are also making very good ASP or pricing mechanism, and for the ASP or growth margin of the IE business, they have been similar to the previous year. Thank you. I would like to take your next question, or I would like to add a few comments to your previous question.
In Q2, and also in Q3, there have been some of the changes relating to the customer profiling. As you can render your observation, in the first half of this year, there have been different types of influence to some of the CNI customer, especially to the customer, due to the impact from the macroeconomic situation. Some, we are also having differentiated or changing demand from those kind of CNI or to B customer. And also, just now, it was mentioned by the other management, there has been differentiated seasonality impact in the Q2 and Q3, and in comparison with Q1 and Q4. So these are the conventional influential factors that have been in place for a long time.
And regarding for your question of a dollar margin, there has been changes of the customer profiling and also the different kinds of the customer portfolio. So this is one of the major reasons, which generate different dollar margin for the second quarter and the first quarter, but we still maintain an average dollar margin at CNY 0.54 in the first three quarters of this year. We are also making very differentiated arrangements for different kinds of the CNI customer. Say we have some customers from the engineering and construction sector, because for the engineering and construction sector customer, of course, they can be covered in the installed design daily capacity for CNI customer. However, there will be a kind of resetting or recalibration when their construction work have been finished.
So there may be some of the variance or some of the differentiation in the earlier calculation and also in the later calculation when the construction work has been finished. So this will also exert some of the impact to the actual generation of the revenue and also the profit at the same time. I want to mention other kinds of the influential factors like the local government's policy. We need to echo the local government's policy in terms of the providing of the energy, like the retail gas. So that is why, in order to cope with those kind of policy change, we need to change our playbook from time to time. So that has also caused some of the difference in the dollar margin from the second quarter in the first quarter.
And also, in terms of the natural gas, there has been changes in the pricing or price setting among different regions. And this kind of magnitude of the price change is also highly variable from one city to the other, so it is very regional specific. That is why we need to regard to the specific region and also need to price in the local government's policy in terms of the regulation relating to the retail gas, ASP. We are also pricing in those kind of, price spread among different types of the vendors in the same city, like those kind of, those type of gate price in different types of the offtake point and also different types of the gas refueling station. Thank you. I want to add some comments relating to the value-added business or smart home business.
In the first quarter, regarding for the revenue and also the growth margin for the value-added business, those kind of key indicators has been well within our expectation and within our comfort zone. In terms of the smart home business, or value-added business, we are diversifying our product offerings, including the providing of some of the intelligent cooking utensils or cooking equipment, to help them to increase the overall intelligentization or digitalization in their own kitchen or in their own household. That is why we foresee greater potential for the development of the value-added business. Thank you. English questions are welcome to be sent to pr.lau@citi.com. We are waiting for the next question. Next question, Dennis of Daiwa. Over to you, Dennis. Thank you. Thank you, Mr. Wang Dongzhi. I want to ask you four questions. The first question regarding for IE, integrated energy.
In the first three quarters, the sales volume has been growing at a pace of 21.4%, but the annual guidance for the growth of the sales volume is ranging from 20% to 30%. So what is your outlook for the future growth rate of the IE segment? The second question is regarding for the fact that in terms of your gross profit of your traditional gas sales, do you think that the annual growth rate can be around 10% in terms of the gross profit? What will be the dollar margin in the first quarter in comparison with the first half of this year? In terms of the value-added business, my next question, could you share with us more data in terms of the growth of the value-added business? The next question is about the LNG trading.
In the third quarter of 2024, what is the comparison between its performance in the third quarter and also the performance of the LNG trading in the first half of the year? Thank you. I would like to take your first question. Just now, you mentioned in terms of the growth of 21.4% in the first three quarters of the IE business, you mentioned the growth rate has been at around 25%-26% in the first half of this year for the IE business. So the first influential factor is the seasonality, because Q1 is the traditionally peak season for those kind of energy supply.
We have already made this kind of analysis and explanation previously, and in the year-on-year comparison in Q3 of this year, last year, in the IE business, we had a lower portfolio of product segments with a lower ASP, and this year, we have an increased number of the proportion of the fee of the product segment under IE, which are presenting higher ASP. That is why, in the first quarter of this year, our IE business is presenting better momentums, and it is becoming more diversified and more dynamic. What is more for IE business, it is establishing better relationship with an increasing number of the power-related operator or the power plants.
And for the annual guidance, in the third quarter, we believe that for the IE business, although the growth rate in terms of the sales volume is a little bit different from the growth rate in the first half of this year, we are still very confident for the annual growth of the IE segment. And also for the whole year, we are very confident we can achieve the growth of the growth margin and also the overall revenue in the new segment that we are operating, although there are some of the headwinds in the third quarter. Thank you. Thank you for your question. Regarding for the growth margin of, retail sales, for the retail gas sales, the annual guidance of 10% increase is not altered, it's not changed.
10% of growth for the growth margin of the retail gas business or the traditional gas sales. This guidance is remaining unchanged. Your next question is relating to the value-added business. For the VAB, as we have been mentioning, for some of the VAB and for some of the niche segments or sub-segments under the value-added business, they are not consolidated under our financial statement at the time being. But for the growth rate of the value-added business, if we have covered those kind of niche sub-segments under the VAB into our balance sheet or into our financial statement, the performance of the value-added business will be well in alignment with our prediction and with our guidance.
In terms of the other kinds of the business, including the LNG trade, trading and other types of the business in the overseas, we still believe that we can be very close to our annual guidance of CNY 300 million, because the latest figure is around CNY 280 million, as I have been mentioning. But last year, the overall revenue generated from this part of the segment of the LNG trading was close to CNY 1.5 billion, so there is a kind of a wide spread between these two, this part of the business in terms of the year-on-year comparison. But actually, we try to be diversified in this type of business expansion and also the business continuation.
We do not think that this will have a lot of impact on our overall operations, although there has been change in the overall revenue generated from the LNG trading. We regard the retail gas sales to be our mainstream business, and this is presenting further sustainability in the foreseeable future. Thank you. A follow-up question from Pierre. My question is as follows: You mentioned in this year, the CapEx, the CapEx is lower than eight billion that you have mentioned earlier. So for those kind of actual CapEx, it is actual spending, it is lower than your goal of the CapEx that is set at the beginning of this year. So for this kind of outstanding balance, where would you like to use this kind of untapped financial resources, for the repurchase of the share or the investment in other areas?
Thank you, Pierre, for your question. For the possible options or the viable options you mentioned, we need to submit proposal to the board of directors and wait for their approval after the deliberation. So that is why we are open to all the viable options. Regarding for the repurchase, program or the increase of the dividend payout ratio, of course, we will be in need of the approval from the board of directors. Thank you. Do we have more questions, operator? No more questions on the main line. Thank you. Any final remark that the management would like to make? First of all, thank you, dear investors. Thank you for taking time out of your busy schedule, and thank you for your long-term support and endorsement for our company.
For ENN Energy, at the beginning of this year, we have been sharing with you in a very candid manner of what we are expecting and what are the headwinds and tailwinds around us. We are upgrading our business and becoming more diversified, and also on the trajectory of the upbeat growth. Of course, for the newly developed segments, like the integrated energy and also the expansion of new type of a customer, like 2B and To-C, we are doing what we can, and we have achieved very good results and leapfrog development. We are very humble to take any suggestion and advice from the investors. Thank you for your support. Thank you, management. Thank you, Mr. Zhang. I would like to wrap up today's conference call. Thank you very much for your time.