Changfeng Announces Revenue up 20% and Gross Profit up 26% for the Nine Months Ended September 30, 2015 Compared to the Same Period of 2014

November 25th, 2015

Toronto, Ontario, November 25th, 2015 – Changfeng Energy Inc., (TSXV: CFY) (“Changfeng” or the “Company”), is pleased to announce that the Company has filed its unaudited condensed interim consolidated financial results for the third quarter ended September 30th, 2015. The unaudited condensed interim consolidated financial results and Management Discussion and Analysis can be downloaded from www.SEDAR.com or from the Company's website at www.changfengenergy.com.

Summary of the Third Quarter of 2015 Consolidated Financial Results

In thousands of Canadian dollars           Three months ended September 30,          Nine months ended September 30,

Note:

(1) See Non- IFRS Financial Measures in this Press Release.

Foreign exchange rates

Changfeng reports its financial results in Canadian dollars but earns all of its revenues and incurs most of its expenses in Chinese Renminbi (“RMB”). Accordingly, any fluctuation in the exchange rate between these two currencies will affect the reported financial information.

Total revenue for the three months ended September 30, 2015 was $13.2 million, an increase of

$1.1 million, or 9%, from $12.1 million for the same period of 2014. Revenue for the nine  months ended September 30, 2015 was $43.5 million, an increase of $7.3 million, or 20%,  from

$36.2 million for the same period of 2014. This increase is mainly resulted from appreciation of Chinese RMB to Canadian Dollar.

Gas sales revenue for the three months ended September 30, 2015 was $5.6 million, an increase of $0.9 million or 20%, from 4.7 million for the same period of 2014. Gas sales revenue

for the nine months ended September 30, 2015 was $20.1 million, an increase of $3.5 million or 21%, from 16.6 million for the same period of 2014. The increase is mainly attributable to:

-       the appreciation of Chinese RMB to Canadian dollar

-       the gas sales volume increased by 7% for Sanya region for the nine months periods ended September 30, 2015, though dropped by 1% for the three months ended September 30, 2015;

-       the gas sales volume growth of 103% and 80% respectively in Xiangdong district for the three and nine months periods ended September 30, 2015

Pipeline installation and connection revenue for the three months ended September 30, 2015 was $5.3 million, an increase of $0.2 million or 3%, from $5.1 million for the same period of 2014. Pipeline installation and connection revenue for the nine months ended September 30, 2015 was $16.8 million, a significant increase of $3.6 million or 27%, from $13.2 million for the same period of 2014. The increase is mainly attributable to:

-       higher number of new residential customers connected during the nine months ended September 30, 2015 in Sanya region, which was in a total of 15,341, an increase of 5,249 or 52%, from 10,092 for the same period of 2014;

-       the appreciation of Chinese RMB to Canadian dollar;

-       partly offset by the dropping number of new customers connected and connection revenue during the three months ended September 30, 2015 both in Sanya Region and Xiangdong District.

Revenue from CNG refueling retail station for the three months ended September 30, 2015 was

$2.3 million, with a slight decrease of $0.02 million, or 1%, from $2.3 million for the same period of 2014. Total revenue from CNG refueling retail station for the nine months ended September 30, 2015 was $6.7 million, an increase of $0.2 million, or 4%, from $6.5 million for the same period of 2014. The increase was totally attributable to Chinese RMB appreciation. Revenue in RMB was actually reduced by RMB 2.0 million or 15% for the three months ended September 30, 2015 and by RMB 3.1 million or 9% for the nine months ended September 30, 2015. CNG sales volume dropped by 18% and 11% respectively during the three months and nine months ended September 30, 2015 compared to the same periods of 2014 due to the increased competition in the surrounding area.

Gross margin for the three months ended September 30, 2015 increased $0.6 million, or 11%, compared to the same period in 2014, and increased 4.7 million or 26% for the nine months ended September 30, 2015 compared to the same periods in 2014. The gross margin percentage of 52% for the first nine months of 2015 is an increase of 2% from 50% for the first nine months of 2014.

As a percentage of revenue, the gross margin of the gas distribution utility of 57% for the first nine months of 2015 is an increase of 1% from 56% for the first nine months of 2014. As a percentage of revenue, the gross margin of the CNG refueling station for the first nine months of 2015 was 26%, an increase of 5% from 21% in the same period of 2014.

General and administrative expenses for the three months ended September 30, 2015 were

$3.0 million, an increase of $0.1 million, or 4%, from $2.9 million in the same period of 2014. For the nine months ended September 30, 2015, general and administrative expenses were $8.4

million, an increase of $0.4 million, or 5%, from $8.0 million in the same period of 2014. General and administrative expenses as a percentage of sales for the three and nine month periods ended September 30, 2015 were 23% and 19%, compared to 24% and 22% for the same periods of 2014, respectively.

Travel and business development expenses for the three months ended September 30, 2015 were $0.7 million, approximately the same as in the same period of 2014. Travel and business development expenses for the nine months ended September 30, 2015 were $2.6 million, approximately the same as in the same period of 2014. As a percentage of sales, travel and business development expenses for the three and nine month periods ended September 30, 2015 were 5.7% and 5.9% respectively, decreased from 6.1% and 7.2% in the same periods of 2014. These expenses normally fluctuate with travel and business development activities in mainland China as the Company seeks to develop new projects in close proximity to the new national pipelines. The decrease in percentage of sales was attributed to more stringent and efficient expense management.

Net income for the three months ended September 30, 2015 was $1.0 million, or $0.02 per share (basic and diluted) compared to $0.7 million or $0.01 per share (basic and diluted) for the same period in 2014. Net income for the nine months ended September 30, 2015 was $5.8 million, or $0.09 per share (basic and diluted) compared to $3.2 million or $0.05 per share  (basic and diluted) for the same period in 2014. These increases are primarily driven by an increase in sales and appreciation of Chinese RMB to Canadian dollar.

EBITDA (non-IFRS measure as identified and defined under section “Non-IFRS Measures”) for three months ended September 30, 2015 was $3.5 million, an increase of $0.7 million, or 23% from $2.8 million for the same period of 2014. EBITDA for the nine months ended September 30, 2015 was $15.1 million, an increase of $4.9 million, or 47%, from $10.3 million for the same period of 2014. The increase was driven primarily by higher sales and appreciation of Chinese RMB to Canadian dollar.

Financial Position

Cash increased by $4.5 million to $16.6 million at September 30, 2015 from $12.1 million at December 31, 2014, primarily resulting from cash provided by operating activities of $10.9 million, cash from bank indebtedness of $6.0 million and $1.3 million from foreign exchange gain, but offset by $2.0 million repayment of long-term debt and $4.0 million repayment of bank indebtedness, as well as cash used for capital expenditures of $3.6 million and cash used in investment of associate of $4.0 million.

Net cash provided by operations was $10.9 million for the nine months ended September 30, 2015 compared to $6.0 million for the same period of 2014.

Cash used in financing activities for the nine months ended September 30, 2015 was $0.1 million, and included a cash inflow of $6.0 million from bank indebtedness, offset by repayments of $4.0 million for bank indebtedness and $2.0 million for long term debt as well as $0.1 million used for share repurchase.

Capital expenditures totaled $3.6 million for the nine months ended September 30, 2015 compared to $5.0 million in the same period of 2014.  The expenditures were mainly related   to

the purchase of equipment for the on-going construction of pipeline networks to connect new customers in the Sanya region and Xiangdong district. There was also an investment in associate totaled in $4.0 million for the nine months ended September 30, 2015, which was nil during the same period in 2014.

Changfeng will finance the majority of the upcoming construction of projects under development in mainland China through its long-term bank loans with BOC Sanya and BOC Pingxiang, as well as operating cash flow from its existing operations.

Non-IFRS Financial Measures

The Company uses the following non-IFRS financial measure: EBITDA. The Company believes this non-IFRS financial measure provides useful information to both management and investors in measuring the financial performance and financial condition of the Company for the reasons outlined below.

Management uses this non-IFRS financial measure to exclude the impact of certain expenses and income that must be recognized under IFRS when analyzing consolidated operating performance, as the excluded items are not necessarily reflective of the Company's underlying operating performance and make comparisons of underlying financial performance between periods difficult. From time to time, the Company may exclude additional items if it believes doing so would result in a more effective analysis of underlying operating performance. The exclusion of certain items does not imply that they are non-recurring.

This measure do not have a standardized meaning prescribed by IFRS and therefore they may not be comparable to similarly titled measures presented by other publicly traded companies and should not be construed as an alternative to other financial measures determined in accordance with IFRS. This measure is listed and defined below:

EBITDA

EBITDA is defined herein as income before income tax expense, interest expense, depreciation and amortization, share of loss of investment in associate, as well as non-cash stock-based compensation expense. EBITDA does not have any standardized meaning prescribed by IFRS and therefore may not conform to the definition used by other companies. A reconciliation of  net income to EBITDA for each of the periods presented as follows:

About Changfeng Energy Inc.

Changfeng Energy Inc. is a natural gas service provider with operations located throughout the People's Republic of China. The Company services industrial, commercial and residential customers, providing them with natural gas for heating purposes and fuel for transportation. The Company has developed a significant natural gas pipeline network as well as urban gas delivery networks, stations, substations and gas pressure regulating stations in Sanya City & Haitang Bay. Through its network of pipelines, the Company provides safe and reliable delivery of natural gas to both homes and businesses. The Company is headquartered in Toronto, Ontario and its shares trade on the Toronto Venture Exchange under the trading symbol “CFY”. For more information, please visit the Company website at www.changfengenergy.com.

For further information please contact:

Forward-Looking Statements

Information set forth in this news release may involve forward-looking statements under applicable securities laws. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this document 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. Although Management believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. This news release does not constitute an offer to sell or solicitation of  an offer to buy any of the securities described herein and accordingly undue reliance should not be put on such.

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

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