Financial Performance - The audited consolidated net profit attributable to the parent company's shareholders for 2020 was RMB 1,510,555,357.16, with undistributed profits amounting to RMB 4,928,503,066.37[4] - The proposed cash dividend is RMB 1.36 per 10 shares (including tax), totaling RMB 523.59 million, which represents 34.66% of the net profit for the year[4] - The company achieved a total revenue of RMB 12.511 billion and a net profit of RMB 1.933 billion for the year 2020, with a net profit attributable to shareholders of RMB 1.511 billion[13] - In 2020, the company's operating revenue reached CNY 12,510,885,312.89, representing a 4.38% increase compared to CNY 11,985,837,618.15 in 2019[33] - The net profit attributable to shareholders of the listed company was CNY 1,510,555,357.16, an increase of 6.33% from CNY 1,420,669,278.97 in 2019[33] - The net cash flow from operating activities was CNY 3,898,510,463.71, reflecting a 3.79% increase from CNY 3,756,177,980.07 in 2019[33] - The total assets of the company at the end of 2020 amounted to CNY 57,257,714,548.41, a 24.34% increase from CNY 46,047,677,000.01 in 2019[33] - The company's net assets attributable to shareholders reached CNY 13,164,966,950.11, which is an 11.06% increase from CNY 11,854,399,559.40 in 2019[33] - Basic earnings per share for 2020 were CNY 0.38, up from CNY 0.36 in 2019, marking a 5.56% increase[34] Operational Highlights - The company sold 35.25 billion cubic meters of natural gas in 2020, demonstrating strong performance in its gas distribution business[14] - The installed capacity of the company's wind power projects reached 5,471.95 MW, with a total wind power generation of 9.881 billion kWh in 2020[14] - The company operates 6 long-distance natural gas pipelines and 30 urban gas projects as of December 31, 2020[14] - The company reported a utilization hour of 2,420 hours for its wind power generation in 2020[14] - The total installed capacity of wind power projects managed by the company is 5,471.95 MW, with the largest project located in Tangshan at 300 MW[16] - The company has a total of 118.59 MW of installed capacity in photovoltaic projects, with the largest project in Qinhuangdao at 20 MW[18] - The company is actively involved in the distribution of natural gas to retail customers across multiple cities, ensuring a broad market reach[20][21] Strategic Initiatives - The company plans to leverage the "3060" target set by the government to guide its future development and capitalize on new opportunities[13] - The company is actively seeking suitable overseas investment projects in addition to its domestic operations[14] - The company is focused on expanding its renewable energy portfolio, particularly in wind and solar power, to align with market trends towards sustainability[16][18] - The company is exploring opportunities for mergers and acquisitions to strengthen its market position and expand its operational capabilities[22] - The company aims to achieve a wind power installed capacity of over 1,200 million kilowatts by 2030, aligning with national energy consumption goals[87] Risk Management - The report includes a detailed description of potential risks and countermeasures faced by the company[7] - The company emphasizes that forward-looking statements regarding development strategies and future business plans do not constitute substantive commitments to investors[5] - Major risks include macroeconomic slowdown, competition from alternative energy, and potential declines in electricity prices[143] - The company recognizes the risks associated with wind resource variability and plans to conduct comprehensive wind resource assessments to mitigate these risks[89] Corporate Governance - The company has maintained a standard unqualified audit report from Ernst & Young Hua Ming[3] - The company’s financial report is guaranteed to be true, accurate, and complete by its management team[3] - The independent non-executive directors support the profit distribution plan, emphasizing reasonable returns for investors[98] - The company has complied with relevant regulations regarding cash dividends and profit distribution procedures[98] - The company confirmed compliance with the "Avoidance of Competition Agreement" with its controlling shareholder, Hebei Construction Investment, for the year 2020[158] Environmental and Social Responsibility - The company has implemented a precise poverty alleviation plan, focusing on industry support to increase collective income[132] - In 2020, the company generated 100.51 billion kWh of green electricity, reducing CO2 emissions by 8.42 million tons[137] - No environmental pollution incidents or complaints were reported in 2020, demonstrating compliance with relevant environmental laws and regulations[142] Future Outlook - The company plans to continue expanding its market presence and invest in new technologies to drive future growth[32] - The company has outlined a future outlook with a projected revenue growth of 20% for the next fiscal year[197] - The company is committed to sustainability, with a goal to reduce carbon emissions by 40% by 2030[198]

Financial Performance - Revenue for the first nine months was CNY 8.32 billion, a 2.76% increase year-on-year[5] - Net profit attributable to shareholders decreased by 10.75% to CNY 941.76 million compared to the same period last year[5] - Basic earnings per share decreased by 14.81% to CNY 0.23 compared to the same period last year[7] - Total operating revenue for Q3 2020 was approximately ¥1.73 billion, a slight increase from ¥1.71 billion in Q3 2019, representing a year-over-year growth of 1.5%[24] - Net profit for Q3 2020 was approximately ¥13.85 million, compared to ¥121.90 million in Q3 2019, reflecting a significant decrease of 88.6%[25] - The total comprehensive income attributable to the parent company's shareholders for Q3 2020 was approximately ¥13.85 million, a significant decrease from ¥121.90 million in Q3 2019, indicating a decline of 88.6%[26] - The company's total revenue for Q3 2020 was CNY 49,528.30, compared to CNY 49,528.30 in Q3 2019, indicating no growth year-over-year[28] - The net profit for Q3 2020 was CNY 133,085,651.53, a significant increase from CNY 42,821,820.00 in Q3 2019, representing a growth of approximately 210%[29] Assets and Liabilities - Total assets increased by 16.18% to CNY 53.50 billion compared to the end of the previous year[5] - Non-current assets totaled approximately $45.16 billion, compared to $38.56 billion in the previous year, marking an increase of 17.2%[19] - Total liabilities reached approximately $37.04 billion, compared to $31.26 billion, indicating a rise of 18.5%[20] - Current liabilities rose to approximately $10.75 billion, slightly up from $10.55 billion, reflecting a 1.8% increase[20] - Total assets as of the end of Q3 2020 amounted to approximately ¥14.64 billion, an increase from ¥13.29 billion at the end of Q3 2019, representing a growth of 10.2%[23] - Total liabilities as of the end of Q3 2020 were approximately ¥4.41 billion, compared to ¥4.14 billion at the end of Q3 2019, showing an increase of 6.5%[23] Shareholder Information - The company had a total of 42,655 shareholders as of September 30, 2020[10] - The largest shareholder, Hebei Construction Investment Group, holds 48.73% of the shares[10] - Shareholders' equity increased to approximately $16.46 billion from $14.79 billion, showing a growth of 11.3%[20] Cash Flow - Operating cash flow for the first nine months increased by 36.31% to CNY 2.82 billion compared to the same period last year[5] - Total cash inflow from operating activities for the first nine months of 2020 was CNY 8,565,613,358.44, compared to CNY 8,078,319,070.68 in the same period of 2019, showing an increase in cash inflow[31] - The cash outflow from investing activities totaled 7,440,864,725.26 RMB, compared to 3,269,377,014.26 RMB in the previous year, reflecting increased investment expenditures[32] - The company reported a net cash flow from financing activities of 4,435,594,025.46 RMB, a substantial increase from 926,114,628.04 RMB in the prior year[32] Research and Development - Research and development expenses surged by 255.04% from CNY 5,032,703.43 to CNY 17,868,060.39[15] - Research and development expenses for Q3 2020 were approximately ¥10.52 million, compared to a negative expense of ¥0.41 million in Q3 2019, highlighting an increase in investment in R&D[24] Financial Expenses - Financial expenses for Q3 2020 were approximately ¥225.48 million, slightly up from ¥218.84 million in Q3 2019, reflecting a year-over-year increase of 3.0%[24] - The company incurred financial expenses of CNY 5,140,189.11 in Q3 2020, up from CNY 2,377,300.17 in Q3 2019, indicating rising costs associated with financing[28] Investment Income - The company reported investment income of approximately ¥37.79 million in Q3 2020, compared to ¥29.13 million in Q3 2019, representing a year-over-year increase of 29.7%[25] - The company reported an investment income of CNY 163,921,439.35 in Q3 2020, compared to CNY 51,320,855.97 in Q3 2019, indicating a significant increase in investment returns[28] Other Financial Metrics - The company received government subsidies amounting to CNY 532,719.47 during the reporting period[8] - The company reported a significant increase in credit impairment losses by 610.06% from CNY 8,554,209.49 to CNY 60,739,695.95[15] - Cash and cash equivalents amounted to approximately $357.73 million, up from $326.01 million, a growth of 9.1%[21]

Capacity and Production - The company reported a total installed capacity of 1,200 MW as of June 30, 2020, with an operational capacity of 1,000 MW[11]. - The total power generation for the first half of 2020 was 1,500 GWh, representing a 15% increase compared to the same period last year[11]. - The average utilization hours for the reporting period were 1,200 hours, reflecting a 10% improvement year-on-year[11]. - The company has ongoing projects with a total capacity of 300 MW under construction, expected to be operational by the end of 2021[11]. - The total installed capacity of the company's wind power projects reached 4,736.35 megawatts, with an additional 320.6 megawatts added during the reporting period[34]. - The average utilization hours for the company's wind power plants were 1,288 hours, which is 165 hours higher than the national average[34]. - The company's wind power generation increased to 4.99 billion kilowatt-hours, a growth of 4.42% compared to the previous year[34]. Financial Performance - The company's operating revenue for the first half of 2020 was approximately CNY 6.59 billion, representing a 3.18% increase compared to the same period last year[17]. - The net profit attributable to shareholders for the same period was approximately CNY 947.43 million, showing a decrease of 2.43% year-on-year[17]. - The net cash flow from operating activities decreased by 17.40% to approximately CNY 1.23 billion compared to the previous year[17]. - The company's total assets increased by 11.51% to approximately CNY 51.35 billion compared to the end of the previous year[17]. - The net assets attributable to shareholders increased by 10.96% to approximately CNY 13.15 billion compared to the end of the previous year[17]. - Basic earnings per share for the first half of 2020 were CNY 0.24, a decrease of 4.00% compared to the same period last year[19]. - The company reported a significant increase of 634.76% in net cash flow from financing activities, totaling approximately CNY 3.03 billion, due to increased borrowings and issuance of medium-term notes[38]. - The company reported a net cash inflow from operating activities of CNY 5,947,016,423.05, compared to CNY 6,204,755,038.36 in the previous year[127]. Market and Strategic Plans - The company plans to expand its market presence in the renewable energy sector, targeting a 20% increase in market share by 2022[11]. - The company is focusing on natural gas sales and wind power generation as its main business areas, with plans to expand into photovoltaic power generation in the future[23]. - The company plans to enhance its LNG receiving station layout to ensure a diversified supply and meet the growing demand for natural gas[33]. - The company plans to accelerate the development of its natural gas business across upstream and downstream sectors, targeting increased market share in the terminal market[51]. - The company is actively managing construction risks associated with wind and natural gas projects, including delays from land approvals and environmental regulations[50]. Research and Development - Research and development expenses for new technologies amounted to RMB 50 million, focusing on enhancing energy efficiency and reducing costs[11]. - Research and development expenses increased by 35.13% to approximately ¥7.35 million, indicating a heightened focus on R&D initiatives[37]. - Research and development expenses for the first half of 2020 were CNY 7,348,412.56, up from CNY 5,438,142.39 in the same period of 2019, reflecting an increase of approximately 35.1%[121]. Regulatory and Risk Management - The company has identified potential risks related to regulatory changes and market competition, with strategies in place to mitigate these risks[5]. - The company faces risks related to wind resource fluctuations, which could impact electricity generation, as well as potential declines in electricity prices due to national policies[49]. - The company has ongoing significant litigation regarding Hebei Yuanhua Glass Co., Ltd. owing approximately RMB 188 million for gas purchases[65]. Shareholder and Capital Structure - The company issued 134,750,000 new A shares on June 29, 2020, with a total of 1,876,156,000 domestic shares converted to A shares on the same day[55]. - The registered capital of Caofeidian Company will increase from RMB 200 million to RMB 490 million after a capital increase of RMB 290 million, with the company holding a 51% stake and Hebei Construction Investment holding 49%[45]. - The total number of shares after the A-share issuance is 3,849,910,396, with A-shares accounting for 2,010,906,000 and H-shares for 1,839,004,396[56]. - The company has a total of 1,876,156,000 restricted shares that will become tradable on June 29, 2023[91]. Debt and Financing - The company has obtained a credit limit of 58.337 billion RMB from financial institutions, with 18.913 billion RMB utilized and 39.424 billion RMB remaining[110]. - The company’s bonds G18 New Y1 and G19 New Y1 are rated AAA, indicating strong debt repayment capability[104]. - The company issued G18 New Y1 bonds amounting to 590 million RMB, fully utilized by June 30, 2020, with a remaining balance of 0 million RMB[103]. - The company issued G19 New Y1 bonds amounting to 910 million RMB, fully utilized by June 30, 2020, with a remaining balance of 0 million RMB[103]. Corporate Governance and Compliance - The company has implemented a robust internal control system to safeguard assets and protect shareholder interests[54]. - The company has established a multi-dimensional performance evaluation system to support its strategic goals and improve human resource management[53]. - The company has committed to adhere to regulations regarding the lock-up and sale of shares by major shareholders, with a lock-up period of 36 months from the A-share listing date[62]. - The company has reappointed Ernst & Young Hua Ming as its domestic auditor for the 2020 fiscal year, pending shareholder approval[64]. Environmental and Social Responsibility - The company invested 2.48952 million RMB in building 10 cold shelters as part of its poverty alleviation efforts, which were completed and put into use in June 2020[77]. - A total of 339 registered impoverished individuals were helped to escape poverty through various measures during the reporting period[79]. - The company continues to implement the "four no-drop" measures to ensure sustainable poverty alleviation efforts[82]. - The company emphasizes the importance of combining poverty alleviation with education and motivation to strengthen community resilience[82]. Accounting and Financial Reporting - The company's financial statements are prepared based on the going concern assumption, indicating confidence in its ability to meet obligations[142]. - The company recognizes financial assets or financial liabilities when it becomes a party to the financial instrument contract[152]. - The company measures financial assets at fair value at initial recognition, with specific conditions for accounts receivable without significant financing components[153]. - The company recognizes revenue when it fulfills its performance obligations, typically when control of goods or services is transferred to the customer[192].

[Chairman's Statement](index=4&type=section&id=Chairman%27s%20Statement) Chairman Cao Xin reviews 2019 achievements in wind and natural gas, outlining 2020 strategies for clean energy expansion and shareholder value | Metric | 2019 Year-End Amount (RMB) | | :--- | :--- | | Consolidated Total Assets | 45.955 billion yuan | | Operating Revenue | 11.943 billion yuan | | Total Profit | 2.184 billion yuan | | Net Profit | 1.828 billion yuan | | Net Profit Attributable to Group Owners | 1.415 billion yuan | - In 2019, the Group's wind and solar power generation businesses sold a total of **8.503 billion kWh** of electricity, and **3.237 billion cubic meters** of natural gas were sold[6](index=6&type=chunk) - 2020 Strategic Outlook: The company will continue to focus on renewable and clean energy, actively acquire new energy resources, advance natural gas production, supply, storage, and sales system construction, ensure key project commissioning, and improve talent development and financial control[7](index=7&type=chunk) [Company Profile](index=6&type=section&id=Company%20Profile) Established in 2010 and listed on the HKEX, the company develops wind, solar, and natural gas, with detailed project distribution and capacity - The company's core businesses are divided into two major segments: wind power and natural gas[8](index=8&type=chunk) | Business Segment | 2019 Operating Data | | :--- | :--- | | Total Controlled Wind Power Capacity | 4,415.75 MW | | Total Equity Wind Power Capacity | 3,939.62 MW | | Wind Power Generation | 8.834 billion kWh | | Wind Power Utilization Hours | 2,472 hours | | Natural Gas Sales Volume | 3.237 billion cubic meters | [Company Structure](index=8&type=section&id=Company%20Structure) The report presents the organizational chart as of December 31, 2019, showing key first-tier subsidiaries, joint ventures, and associates - The organizational chart primarily displays the company's first-tier subsidiaries, covering various sectors including new energy, natural gas, investment, and solar energy[10](index=10&type=chunk)[13](index=13&type=chunk)[15](index=15&type=chunk) [Wind and Solar Power Generation Projects](index=10&type=section&id=Overview%20of%20the%20Group%27s%20Wind%20and%20Solar%20Power%20Generation%20Projects) As of 2019 year-end, the company's controlled wind power projects totaled 4,415.75 MW, primarily in Hebei, Shanxi, Xinjiang, and Yunnan, with solar projects at 102.4 MW | Business Segment | Total Installed Capacity (MW) | | :--- | :--- | | Controlled Wind Power Projects | 4,415.75 | | Solar Power Projects | 102.4 | - The company's wind power projects are widely distributed, with Hebei Province being a core region, where Zhangjiakou and Chengde areas combined exceed **3,000 MW** of installed capacity[16](index=16&type=chunk) [Natural Gas Projects](index=12&type=section&id=Overview%20of%20the%20Group%27s%20Main%20Natural%20Gas%20Projects) The company's natural gas business, primarily in Hebei, includes long-distance pipelines, city gas projects, and CNG mother stations, forming a comprehensive distribution network - As of 2019 year-end, the company owned 6 natural gas long-distance pipelines, 18 high-pressure branch pipelines, 30 city gas projects, 22 distribution stations, 13 gate stations, 7 CNG mother stations, 6 CNG refueling sub-stations, and 1 LNG refueling station[8](index=8&type=chunk) - The company's natural gas projects primarily serve various cities and counties within Hebei Province, including Shijiazhuang, Baoding, Handan, Hengshui, and Chengde, distributing natural gas to local retail customers[20](index=20&type=chunk)[21](index=21&type=chunk) [Financial Highlights and Key Operating Data](index=15&type=section&id=Financial%20Highlights%20and%20Key%20Operating%20Data) The report presents five-year financial and operating data (2015-2019), showing continuous growth in revenue, profit, and assets, with 2019 revenue at 11.943 billion yuan and net profit attributable to owners at 1.415 billion yuan 2019 Consolidated Statement of Comprehensive Income Highlights (RMB thousands) | Metric | 2019 | 2018 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 11,943,233 | 9,975,409 | +19.7% | | Profit Before Tax | 2,184,249 | 1,743,158 | +25.3% | | Profit for the Year | 1,827,942 | 1,575,164 | +16.1% | | Profit Attributable to Owners of the Company | 1,414,786 | 1,268,506 | +11.5% | | Earnings Per Share (Basic) | 36.17 cents | 33.37 cents | +8.4% | 2019 Consolidated Statement of Financial Position Highlights (RMB thousands) | Metric | December 31, 2019 | December 31, 2018 | YoY Change | | :--- | :--- | :--- | :--- | | Total Assets | 45,954,780 | 39,160,828 | +17.3% | | Total Liabilities | 31,205,124 | 26,764,276 | +16.6% | | Total Equity | 14,749,656 | 12,396,552 | +19.0% | | Equity Attributable to Owners of the Company | 11,816,389 | 10,036,357 | +17.7% | - Natural gas sales volume continuously grew from **1.127 billion cubic meters** in 2015 to **3.237 billion cubic meters** in 2019, nearly tripling within five years[32](index=32&type=chunk) [Management Discussion and Analysis](index=18&type=section&id=Management%20Discussion%20and%20Analysis) Management discusses the 2019 operating environment, business review, financial condition, and performance, highlighting robust growth in wind power and natural gas, double-digit increases in revenue and profit, and outlining 2020 priorities and risk mitigation strategies [Operating Environment](index=18&type=section&id=Operating%20Environment) In 2019, China's clean energy sector experienced favorable development due to economic stability and energy supply-side reforms, with wind power benefiting from reduced curtailment and natural gas from "coal-to-gas" policies and new pipeline infrastructure [Operating Environment of Wind and Solar Power Industries](index=18&type=section&id=Operating%20Environment%20of%20Wind%20and%20Solar%20Power%20Industries) The wind power industry saw stable growth in 2019 with 25.74 GW of new grid-connected capacity, benefiting from policies reducing curtailment and promoting grid parity, which is expected to drive a rush to install existing projects - The national average wind curtailment rate in 2019 was **4%**, a **3 percentage point decrease** year-on-year, further alleviating curtailment issues[35](index=35&type=chunk) - The National Development and Reform Commission announced that new onshore wind power projects approved from January 1, 2021, will achieve grid parity without national subsidies, expected to trigger a rush to install existing projects in the near term[36](index=36&type=chunk) [Operating Environment of Natural Gas Industry](index=21&type=section&id=Operating%20Environment%20of%20Natural%20Gas%20Industry) Driven by macroeconomics and "coal-to-gas" policies, China's natural gas consumption grew 9.4% in 2019, marked by the establishment of the national pipeline company and the commissioning of the China-Russia East-Route pipeline, enhancing supply security - In 2019, China's apparent natural gas consumption reached **306.7 billion cubic meters**, a **9.4% year-on-year increase**[37](index=37&type=chunk) - The establishment of the national pipeline company aims to integrate and optimize pipeline facilities, fostering a market system with multiple upstream suppliers, a unified midstream pipeline network, and full downstream competition[38](index=38&type=chunk) - The commissioning of the China-Russia East-Route natural gas pipeline increased the "north-to-south" flow, improving the national natural gas pipeline network and significantly enhancing energy security[39](index=39&type=chunk) [Business Review](index=22&type=section&id=Business%20Review) In 2019, both core businesses achieved good progress: wind power added 557.6 MW of controlled capacity, maintained high utilization hours, and saw a 15.58% revenue increase, while natural gas sales volume rose 23.02% to 3.237 billion cubic meters, with revenue up 21.87% [Wind Power Business Review and Key Financial Indicators](index=22&type=section&id=Wind%20Power%20Business%20Review%20and%20Key%20Financial%20Indicators) In 2019, wind power capacity steadily grew with 557.60 MW of new controlled capacity, reaching a cumulative 4,415.75 MW, and average utilization hours of 2,472, leading to 3.955 billion yuan in revenue and 2.212 billion yuan in operating profit | Metric | 2019 Data | | :--- | :--- | | New Controlled Installed Capacity | 557.60 MW | | Cumulative Controlled Installed Capacity | 4,415.75 MW | | Average Utilization Hours | 2,472 hours | | Power Generation | 8.834 billion kWh (+15.08% YoY) | | Financial Indicators (including Solar) | 2019 Amount (RMB) | YoY Growth | | :--- | :--- | :--- | | Sales Revenue | 3.955 billion yuan | 15.58% | | Operating Expenses | 1.884 billion yuan | 18.34% | | Operating Profit | 2.212 billion yuan | 15.63% | | Gross Profit Margin | 61.54% | +0.22 percentage points | [Natural Gas Business Review and Key Financial Indicators](index=24&type=section&id=Natural%20Gas%20Business%20Review%20and%20Key%20Financial%20Indicators) In 2019, natural gas sales reached 3.237 billion cubic meters, a 23.02% increase, with wholesale gas accounting for 61.9%, driving revenue to 7.984 billion yuan and operating profit to 712 million yuan, a significant 78.45% increase due to higher sales and bad debt recovery | Sales Type | 2019 Sales Volume (billion cubic meters) | YoY Growth | | :--- | :--- | :--- | | Wholesale Gas | 2.003 | 23.70% | | Retail Gas | 1.135 | 23.41% | | CNG/LNG Gas | 0.098 | 7.27% | | **Total** | **3.237** | **23.02%** | | Financial Indicators | 2019 Amount (RMB) | YoY Growth | | :--- | :--- | :--- | | Sales Revenue | 7.984 billion yuan | 21.87% | | Operating Expenses | 7.289 billion yuan | 18.27% | | Operating Profit | 712 million yuan | 78.45% | | Gross Profit Margin | 10.88% | -0.73 percentage points | [Management's Discussion and Analysis of Financial Condition and Operating Results](index=27&type=section&id=Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Operating%20Results) In 2019, the Group achieved strong overall operating performance, with total revenue reaching 11.943 billion yuan (+19.73%) driven by natural gas and wind power, and net profit attributable to owners at 1.415 billion yuan (+11.51%), while capital expenditures and borrowings increased to support growth | Item | 2019 Amount (RMB) | YoY Change | | :--- | :--- | :--- | | Total Revenue | 11.943 billion yuan | +19.73% | | - Natural Gas Business Revenue | 7.984 billion yuan | +21.87% | | - Wind Power Business Revenue | 3.955 billion yuan | +15.58% | | Operating Expenses | 9.27 billion yuan | +18.29% | | Finance Costs | 875 million yuan | +11.46% | | Income Tax Expense | 356 million yuan | +111.9% | | Net Profit | 1.828 billion yuan | +16.06% | | Net Profit Attributable to Owners | 1.415 billion yuan | +11.51% | - Trade receivables and bills receivable increased to **3.966 billion yuan**, primarily due to an increase in uncollected renewable energy tariff surcharge subsidies for the wind power business[67](index=67&type=chunk) - Total capital expenditure amounted to **6.624 billion yuan**, a **29.25% year-on-year increase**, mainly for new wind power projects and natural gas pipelines[70](index=70&type=chunk)[71](index=71&type=chunk) - As of the end of 2019, the net debt-to-equity ratio was **67.9%**, a slight increase from **66%** at the end of 2018, mainly due to increased bank borrowings[72](index=72&type=chunk) [2020 Work Outlook](index=30&type=section&id=2020%20Work%20Outlook) Looking to 2020, the company will capitalize on national clean energy initiatives, intensifying wind power development, accelerating natural gas pipeline construction and market expansion, and diversifying financing channels to ensure stable capital and reduce costs - **Wind Power Business Outlook**: Actively secure resources, intensify offshore wind power development, focus on large-scale base projects; strengthen comprehensive engineering control to ensure key projects are commissioned on schedule; enhance safety management and informatization construction[75](index=75&type=chunk)[76](index=76&type=chunk) - **Natural Gas Business Outlook**: Accelerate construction of key pipeline networks like the Beijing-Handan dual pipeline; strengthen a "market-first" sales strategy to capture market share; actively expand multiple gas sources to enhance supply security[77](index=77&type=chunk) - **Financing Outlook**: Continuously broaden financing channels, innovate financing methods (e.g., asset securitization, finance leasing), attract low-cost capital, and maintain a reasonable capital structure[78](index=78&type=chunk) [Risk Factors and Risk Management](index=32&type=section&id=Risk%20Factors%20and%20Risk%20Management) The company identifies key risks in wind power (resource uncertainty, declining tariffs, curtailment, construction management) and natural gas (winter supply, accounts receivable), along with interest rate fluctuations, and has implemented mitigation strategies such as prioritizing grid-favorable projects and diversifying financing - **Wind Power Business Risks**: - **Wind resource uncertainty**: Inter-annual fluctuations in wind speed may affect power generation - **Electricity price decline risk**: "Wind-coal parity" will be achieved in 2020, putting pressure on new project tariffs - **Wind curtailment**: Grid construction lags behind wind power project development, especially in the Zhangjiakou region - **Engineering construction management**: Faces uncontrollable factors such as construction delays and slow land approval[79](index=79&type=chunk)[80](index=80&type=chunk)[82](index=82&type=chunk) - **Natural Gas Business Risks**: - **Winter supply responsibility**: Gas demand surges during heating season, posing severe supply challenges - **Accounts receivable risk**: Downstream customer arrears are controllable, but full recovery still requires time[83](index=83&type=chunk)[84](index=84&type=chunk) - **Interest Rate Risk**: The company has significant capital expenditures and high demand for borrowed funds, so changes in interest rates will impact funding costs[85](index=85&type=chunk) [Human Resources](index=35&type=section&id=Human%20Resources) As of 2019 year-end, the Group had 2,337 employees with an average age of 33, nearly 60% holding bachelor's degrees or higher, and maintains a performance-oriented HR system, diverse recruitment, talent development, and compliance with labor laws | Item | Data | | :--- | :--- | | Total Employees | 2,337 | | Average Age | 32.87 years | | Percentage with Bachelor's Degree or Higher | 59.52% | | Wind Power and Solar Business Employees | 997 | | Natural Gas Business Employees | 1,233 | - The company's human resources strategy aims to establish an organizational structure adaptable to rapid development, providing a supporting platform for strategic implementation[88](index=88&type=chunk) - The company implements a performance and compensation management system based on "performance orientation and target management" and actively conducts full-staff position performance appraisals[89](index=89&type=chunk) [Biographies of Directors, Supervisors, and Senior Management](index=37&type=section&id=Biographies%20of%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) This section details the biographies of the company's non-executive directors, executive directors, independent non-executive directors, supervisors, senior management, and joint company secretaries, including their age, education, professional qualifications, and key appointments - Dr Cao Xin, 48, serves as the company's Non-executive Director and Chairman[93](index=93&type=chunk) - Mr Mei Chunxiao, 51, serves as the company's Executive Director, President, and Party Secretary[94](index=94&type=chunk) - During the reporting period, there were changes in the company's Board of Directors and Supervisory Committee members, with several directors and supervisors resigning on June 11, 2019[101](index=101&type=chunk) [Board of Directors' Report](index=43&type=section&id=Board%20of%20Directors%27%20Report) The Board of Directors' report reviews 2019 business operations, financial performance, legal compliance, key risks, and future outlook, confirming growth in core businesses, significant increases in revenue and net profit, and compliance with corporate governance codes [Business Review (Board Report)](index=43&type=section&id=Business%20Review) The Board reviewed 2019 business, confirming positive progress in natural gas and new energy investments, with increased electricity sales, gas sales, revenue, and profit, while adhering to environmental regulations and managing macroeconomic, competitive, and accounts receivable risks | Metric | 2019 Data | YoY Growth | | :--- | :--- | :--- | | Electricity Sales | 8.503 billion kWh | 14.95% | | Natural Gas Sales | 3.237 billion cubic meters | 23.02% | | Operating Revenue | 11.943 billion yuan | 19.73% | | Total Profit | 2.184 billion yuan | 25.3% | | Net Profit | 1.828 billion yuan | 16.06% | | Net Profit Attributable to Owners | 1.415 billion yuan | 11.51% | [Purchase, Sale or Redemption of the Company's Listed Securities](index=46&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) During the reporting period, the company did not redeem, sell, or purchase any listed securities on the HKEX, but successfully issued several tranches of bonds, including 910 million yuan in green corporate bonds and 2 billion yuan in ultra-short-term financing bonds - In 2019, the company successfully issued perpetual green corporate bonds totaling **910 million RMB**, with a coupon rate of **4.70%**[111](index=111&type=chunk) - In 2019, the company completed the issuance of four tranches of ultra-short-term financing bonds, totaling **2 billion RMB**, with coupon rates ranging from **3.25% to 3.40%**[111](index=111&type=chunk)[112](index=112&type=chunk) [A-Share Initial Public Offering](index=48&type=section&id=A-Share%20Initial%20Public%20Offering) The company is systematically advancing its A-share IPO and listing plan on the Shanghai Stock Exchange, with the A-share offering plan's validity extended by shareholders and an updated prospectus pre-disclosed by the CSRC in April 2019 - The company plans to issue no more than **134,750,000 A-shares** and intends to list them on the Shanghai Stock Exchange[114](index=114&type=chunk) - On April 19, 2019, the China Securities Regulatory Commission (CSRC) published an updated pre-disclosure of the company's A-share prospectus, indicating progress in the A-share offering process[114](index=114&type=chunk) [Profit Distribution and Dividend Policy](index=48&type=section&id=Profit%20Distribution%20and%20Dividend%20Policy) To facilitate the A-share offering, the Board recommends no final dividend for 2019, with a commitment to consider future profit distribution to shareholders post-IPO, and details the corporate income tax withholding policy for H-share dividends - The Board recommends no final dividend for the year ended December 31, 2019, primarily to ensure the smooth progress of the ongoing A-share offering[116](index=116&type=chunk) [Connected Transactions](index=55&type=section&id=Connected%20Transactions) During the reporting period, the company engaged in several connected transactions, including a one-off acquisition of a distributed solar power project and ongoing transactions for office leasing, financial services, and financing leases with related parties, all duly approved and disclosed - One-off connected transaction: Acquisition of a distributed solar power generation project from Jiantou Guorong, a wholly-owned subsidiary of controlling shareholder Hebei Construction Investment, for approximately **35.58 million RMB**[130](index=130&type=chunk) - Continuing connected transactions: - **Property Lease**: Leasing office premises from Hebei Construction Investment, with actual transaction amount of **7.0228 million RMB** in 2019[131](index=131&type=chunk) - **Financial Services**: Utilizing Huikai Leasing's finance leasing services, with actual transaction amount of **1.304 billion RMB** in 2019[134](index=134&type=chunk) - **Financial Services**: Deposits with the Group's finance company, with a maximum daily deposit balance of **1.992 billion RMB** in 2019[135](index=135&type=chunk) [Corporate Governance Report](index=65&type=section&id=Corporate%20Governance%20Report) The company is committed to high corporate governance standards, complying with most HKEX Corporate Governance Code provisions, detailing its governance structure, Board and committee functions, director nomination, financial reporting responsibilities, risk management, internal controls, auditor remuneration, and shareholder communication [Board of Directors](index=66&type=section&id=Board%20of%20Directors) During the reporting period, the Board comprised 9 directors, including 4 non-executive, 2 executive, and 3 independent non-executive directors, meeting listing rule requirements, with separate Chairman and President roles, high attendance at 13 meetings, and ongoing professional training for effective performance - The Board of Directors consists of **9 directors**, with independent non-executive directors accounting for one-third, complying with listing rules[154](index=154&type=chunk)[155](index=155&type=chunk) - In 2019, the Board held **13 meetings**, with all directors maintaining **100% attendance**[160](index=160&type=chunk) [Board Committees](index=71&type=section&id=Board%20Committees) The Board has four committees—Audit, Remuneration and Appraisal, Nomination, and Strategy and Investment—to assist in fulfilling its duties, with details on their composition, responsibilities, and 2019 meeting activities and key deliberations - The Audit Committee is responsible for overseeing financial reporting, risk management, and internal control systems, holding **three meetings** in 2019[167](index=167&type=chunk)[168](index=168&type=chunk) - The Remuneration and Appraisal Committee is responsible for determining remuneration policies and appraisal schemes for directors and senior management, holding **two meetings** in 2019[169](index=169&type=chunk)[170](index=170&type=chunk) - The Nomination Committee is responsible for the nomination and appointment of directors and senior management, and monitoring the Board's diversity policy, holding **two meetings** in 2019[171](index=171&type=chunk)[172](index=172&type=chunk) [Risk Management and Internal Control](index=76&type=section&id=Risk%20Management%20and%20Internal%20Control) In 2019, the Group's risk management included annual assessments, major risk warnings, and quarterly response efforts, while internal control focused on system development, policy updates, and responsibility allocation, with the Board confirming the system's effectiveness and adequacy - The Board confirmed that it reviewed the risk management and internal control systems as of December 31, 2019, and deemed them effective and adequate[178](index=178&type=chunk) - The company has established a major information internal control system and formulated policies for information disclosure and insider information registration to prevent improper use and dissemination of inside information[178](index=178&type=chunk) [Supervisory Committee Report](index=82&type=section&id=Supervisory%20Committee%20Report) The Supervisory Committee's report details its 2019 composition, meetings, and oversight work, including a change in members and five meetings, concluding that the company operated legally, directors and senior management were diligent, financial reports were fair, and no actions detrimental to the company or shareholders were found - In 2019, the Supervisory Committee held **five meetings**, reviewing important proposals such as annual financial reports, profit distribution, senior management nominations, revision of rules of procedure, and interim reports[191](index=191&type=chunk) - The Supervisory Committee supervised five aspects: company operations, finance, performance of senior management, connected transactions, and information disclosure, with all conclusions being positive, finding no violations or actions detrimental to shareholder interests[192](index=192&type=chunk)[193](index=193&type=chunk)[194](index=194&type=chunk)[195](index=195&type=chunk)[196](index=196&type=chunk) [Independent Auditor's Report](index=85&type=section&id=Independent%20Auditor%27s%20Report) Ernst & Young issued an unmodified opinion on the company's consolidated financial statements for the year ended December 31, 2019, confirming fair presentation in accordance with IFRS and Hong Kong Companies Ordinance, highlighting key audit matters: impairment assessment of trade and bills receivables, goodwill impairment, and provision for restoration costs - **Audit Opinion**: The auditor believes the consolidated financial statements fairly and truly reflect the Group's financial position and operating results (unmodified opinion)[198](index=198&type=chunk) - **Key Audit Matters**: 1. **Impairment assessment of trade and bills receivables**: Involves management's judgment on recoverability and impairment provisions 2. **Goodwill impairment**: Goodwill impairment testing is complex, involving high judgment on assumptions such as revenue growth rates, gross profit margins, and discount rates 3. **Provision for restoration costs**: Estimation of infrastructure site restoration obligations under service concession arrangements involves significant judgment on future cash outflows and discount rates[200](index=200&type=chunk)[201](index=201&type=chunk)[202](index=202&type=chunk)[203](index=203&type=chunk) [Consolidated Financial Statements](index=91&type=section&id=Consolidated%20Financial%20Statements) This section presents the core consolidated financial statements for the year ended December 31, 2019, including the Consolidated Statement of Profit or Loss and Other Comprehensive Income, Consolidated Statement of Financial Position, Consolidated Statement of Changes in Equity, and Consolidated Statement of Cash Flows, prepared in accordance with IFRS [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=91&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) In 2019, the company achieved operating revenue of 11.943 billion yuan (+19.7%), gross profit of 3.305 billion yuan (+15.6%), net profit of 1.828 billion yuan (+16.1%), and net profit attributable to owners of 1.415 billion yuan (+11.5%), with basic earnings per share of RMB 36.17 cents | Item (RMB thousands) | 2019 | 2018 | | :--- | :--- | :--- | | Revenue | 11,943,233 | 9,975,409 | | Gross Profit | 3,305,412 | 2,859,845 | | Operating Profit | 2,844,600 | 2,238,542 | | Profit Before Tax | 2,184,249 | 1,743,158 | | Profit for the Year | 1,827,942 | 1,575,164 | | Profit Attributable to Owners of the Company | 1,414,786 | 1,268,506 | [Consolidated Statement of Financial Position](index=92&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of December 31, 2019, total assets were 45.955 billion yuan (+17.3%), with non-current assets at 38.499 billion yuan, total liabilities at 31.205 billion yuan (+16.6%), and total equity at 14.750 billion yuan, including 11.816 billion yuan attributable to owners | Item (RMB thousands) | December 31, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Total Non-Current Assets | 38,499,330 | 32,742,655 | | Total Current Assets | 7,455,450 | 6,418,173 | | **Total Assets** | **45,954,780** | **39,160,828** | | Total Current Liabilities | 10,532,279 | 8,602,445 | | Total Non-Current Liabilities | 20,672,845 | 18,161,831 | | **Total Liabilities** | **31,205,124** | **26,764,276** | | **Net Assets** | **14,749,656** | **12,396,552** | [Consolidated Statement of Changes in Equity](index=94&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) The statement details equity changes for 2019, with total equity increasing from 12.397 billion yuan at the beginning of the period to 14.750 billion yuan at year-end, driven by 1.828 billion yuan in profit and 906 million yuan from perpetual corporate bond issuance, partially offset by 783 million yuan in dividends paid - Equity attributable to owners of the company increased from **10.036 billion yuan** at the beginning of the year to **11.816 billion yuan** at year-end, primarily driven by **1.415 billion yuan** in annual profit, partially offset by **464 million yuan** in dividend payments[211](index=211&type=chunk) [Consolidated Statement of Cash Flows](index=95&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) In 2019, net cash flow from operating activities was 3.732 billion yuan, net cash outflow from investing activities was 6.103 billion yuan, mainly for property, plant, and equipment, and net cash inflow from financing activities was 2.465 billion yuan, primarily from new bank borrowings, resulting in a net increase of 93.39 million yuan in cash and cash equivalents | Item (RMB thousands) | 2019 | 2018 | | :--- | :--- | :--- | | Net Cash Flows from Operating Activities | 3,731,765 | 3,156,076 | | Net Cash Flows Used in Investing Activities | (6,102,925) | (3,966,886) | | Net Cash Flows from Financing Activities | 2,464,553 | 945,465 | | **Net Increase in Cash and Cash Equivalents** | **93,393** | **134,655** | [Notes to the Financial Statements](index=97&type=section&id=Notes%20to%20the%20Financial%20Statements) This section provides detailed explanations and supplementary information for the consolidated financial statements, covering company information, basis of preparation, significant accounting policies (including IFRS 16 adoption), accounting judgments and estimates, segment information, detailed financial statement line items, related party transactions, financial instruments and risk management, and contingent liabilities and commitments - The company first adopted IFRS 16 Leases on January 1, 2019, impacting the financial statements primarily by recognizing right-of-use assets and lease liabilities[226](index=226&type=chunk)[227](index=227&type=chunk) - Segment information (Note 5) indicates that the natural gas segment contributed approximately **67% of revenue**, but the wind and solar power segment had a higher profit contribution[308](index=308&type=chunk) - Related party transactions (Note 35) disclose detailed transactions with controlling shareholder Hebei Construction Investment and its subsidiaries (e.g., Group Finance Company, Huikai Leasing), including deposits, loans, finance leases, and guarantees[426](index=426&type=chunk)[427](index=427&type=chunk)[428](index=428&type=chunk) - Financial risk management (Note 40) describes the company's exposure to interest rate risk, foreign currency risk, credit risk, and liquidity risk, along with management strategies; the company's capital management objective is to maintain a net debt-to-equity ratio not exceeding **70%**, which was **66%** at the end of 2019[452](index=452&type=chunk)[465](index=465&type=chunk)[466](index=466&type=chunk)

[Chairman's Statement](index=5&type=section&id=Chairman's%20Statement) The Chairman's statement highlights the group's strong performance in 2018, driven by supportive national policies for clean energy, with growth across wind power and natural gas businesses, and outlines strategic priorities for 2019 [Chairman's Statement](index=5&type=section&id=Chairman's%20Statement) Chairman Cao Xin's statement notes that in 2018, the group's wind power and natural gas businesses achieved good development and improved operating indicators, benefiting from national clean energy policies, with increases in total assets, revenue, and profit, and outlines continued focus on new energy projects and natural gas supply, production, storage, and sales system construction in 2019 to reward shareholders Key Operating and Financial Indicators for 2018 | Indicator | 2018 Data | | :--- | :--- | | Electricity Sales (Wind and PV) | 7.397 billion kWh | | Natural Gas Sales | 2.631 billion cubic meters | | Consolidated Total Assets | RMB 39.161 billion | | Operating Revenue | RMB 9.975 billion | | Total Profit | RMB 1.743 billion | | Net Profit | RMB 1.575 billion | | Net Profit Attributable to Parent Company | RMB 1.269 billion | - In 2019, the group will continue to focus on renewable and clean energy, actively acquire new energy resources, advance the construction of natural gas production, supply, storage, and sales systems, and strengthen project control, talent development, financing channels, and financial management[7](index=7&type=chunk) [Company Profile](index=6&type=section&id=Company%20Profile) This section provides an overview of the company's establishment, core businesses in wind power and natural gas, and its organizational structure and project portfolio [Company Overview](index=6&type=section&id=Company%20Profile) Xintian Green Energy was established in 2010 and listed on the Hong Kong Stock Exchange in the same year, with core businesses in wind power across multiple provinces and natural gas primarily operating transmission and distribution facilities in Hebei Province - The company primarily engages in the development and utilization of new energy (wind power) and clean energy (natural gas)[8](index=8&type=chunk) 2018 Year-End Operating Data by Business Segment | Business Segment | 2018 Year-End Operating Data | | :--- | :--- | | Wind Power Business | Controlled installed capacity of 3,858.15 MW, equity installed capacity of 3,482.75 MW, annual power generation of 7.676 billion kWh, and 2,482 utilization hours | | Natural Gas Business | Owns 6 long-distance pipelines, 14 high-pressure branch pipelines, 30 city gas projects, and other facilities, with annual natural gas sales of 2.631 billion cubic meters | [Company Structure](index=8&type=section&id=Company%20Structure) The report presents the group's organizational chart as of December 31, 2018, including only first-tier subsidiaries and marking joint ventures, associates, and long-term investment companies [Project Overview](index=10&type=section&id=Group's%20Wind%20Power%20and%20Natural%20Gas%20Projects) This chapter details the group's controlled wind power, photovoltaic power projects, and major natural gas projects, with wind power projects widely distributed across several provinces totaling 3,858.15 MW of installed capacity, and natural gas projects primarily concentrated in Hebei Province, covering long-distance pipelines, city gas, and CNG mother stations Total Installed Capacity by Project Type | Project Type | Total | | :--- | :--- | | Controlled Wind Power Project Installed Capacity | 3,858.15 MW | | Controlled Photovoltaic Project Installed Capacity | 101 MW | - The group's natural gas project network is comprehensive, including 6 long-distance pipelines, multiple city gas projects, and 7 CNG mother stations, primarily serving Hebei Province[19](index=19&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk) [Financial Highlights and Key Operating Data](index=15&type=section&id=Financial%20Highlights%20and%20Key%20Operating%20Data) This section summarizes the company's strong financial performance in 2018, including significant growth in revenue, net profit, and total assets [Financial Highlights and Key Operating Data](index=15&type=section&id=Financial%20Highlights%20and%20Key%20Operating%20Data) During the reporting period, the company demonstrated strong financial performance, with 2018 operating revenue reaching **RMB 9.975 billion**, a **41.4% year-on-year increase**, and net profit at **RMB 1.575 billion**, a **42.6% year-on-year increase**, while total assets steadily grew to **RMB 39.161 billion**, and earnings per share increased from **25.29 cents in 2017 to 33.37 cents** Key Financial Indicators (RMB Thousand) | Indicator (RMB Thousand) | 2018 | 2017 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 9,975,409 | 7,057,582 | +41.4% | | Profit Before Tax | 1,743,158 | 1,203,874 | +44.8% | | Profit for the Year | 1,575,164 | 1,104,727 | +42.6% | | Profit Attributable to Parent Company | 1,268,506 | 939,616 | +35.0% | Key Financial Position Indicators (RMB Thousand) | Indicator (RMB Thousand) | 2018 Year-End | 2017 Year-End | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Total Assets | 39,160,828 | 34,288,089 | +14.2% | | Total Liabilities | 26,764,276 | 23,786,999 | +12.5% | | Total Equity | 12,396,552 | 10,501,090 | +18.0% | [Management Discussion and Analysis](index=18&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth review of the operating environment, business performance, financial condition, and future outlook, along with an analysis of risk factors and management strategies [Operating Environment](index=18&type=section&id=Operating%20Environment) In 2018, China's macro economy maintained stable growth, with continued optimization of energy consumption structure and an increased share of clean energy, while the wind power sector benefited from policies addressing curtailment and promoting grid parity, and the natural gas sector saw rapid demand growth driven by "coal-to-gas" policies and favorable pricing reforms - In 2018, China's new grid-connected wind power capacity reached **20.59 GW**, with cumulative capacity of **184 GW**, and the annual average wind curtailment rate decreased to **7%**, a **5 percentage point year-on-year reduction**[35](index=35&type=chunk)[36](index=36&type=chunk) - The National Development and Reform Commission and the National Energy Administration issued the "Clean Energy Consumption Action Plan (2018-2020)" and "Notice on Actively Promoting Grid Parity for Wind and Photovoltaic Power Generation Without Subsidies," providing policy support for industry development[36](index=36&type=chunk)[37](index=37&type=chunk) - In 2018, apparent natural gas consumption reached **280.3 billion cubic meters**, an **18.1% year-on-year increase**, with the state introducing policies to rationalize residential gas gate prices and issuing opinions to promote coordinated and stable development of natural gas[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk) [Business Review](index=21&type=section&id=Business%20Review) In 2018, both of the company's core businesses achieved significant growth, with wind power seeing increased installed capacity, utilization hours, and reduced curtailment, leading to higher revenue and operating profit, while natural gas sales surged by 40% year-on-year due to environmental policies, with continued pipeline construction and market expansion driving operating profit up by over 100% [Wind Power Business](index=21&type=section&id=Wind%20Power%20Business%20Review%20and%20Key%20Financial%20Indicators) In 2018, the wind power business added **509.8 MW** of controlled installed capacity, reaching a cumulative total of **3,858.15 MW**, with average utilization hours increasing to **2,482 hours**, exceeding the Hebei provincial average, and curtailment rate decreasing to **5.43%**, resulting in revenue of **RMB 3.422 billion**, a **10.35% year-on-year increase**, and operating profit of **RMB 1.913 billion**, a **15.73% year-on-year increase**, with gross margin improving to **61.32%** Wind Power Business Operating Indicators | Wind Power Business Operating Indicator | 2018 Data | Year-on-Year Change | | :--- | :--- | :--- | | New Controlled Installed Capacity | 509.8 MW | - | | Cumulative Controlled Installed Capacity | 3,858.15 MW | - | | Average Utilization Hours | 2,482 hours | Increased by 90 hours | | Curtailment Rate | 5.43% | Decreased by 2.39 percentage points | Wind Power Business Financial Indicators (RMB) | Wind Power Business Financial Indicator (RMB) | 2018 Data | Year-on-Year Growth | | :--- | :--- | :--- | | Sales Revenue | 3.422 billion | 10.35% | | Operating Profit | 1.913 billion | 15.73% | | Gross Margin | 61.32% | Increased by 1.7 percentage points | [Natural Gas Business](index=23&type=section&id=Natural%20Gas%20Business%20Review%20and%20Key%20Financial%20Indicators) In 2018, natural gas sales reached **2.631 billion cubic meters**, a significant **40.0% year-on-year increase**, with wholesale gas volume growing by **48.3%**, and **1,054.50 km** of new pipelines added during the year, bringing cumulative operational pipelines to **4,142.17 km**, resulting in revenue of **RMB 6.551 billion**, a **65.55% year-on-year increase**, and operating profit of **RMB 399 million**, a **108.9% year-on-year increase** Natural Gas Sales Volume by Category | Natural Gas Sales Category | 2018 Sales Volume (billion cubic meters) | Year-on-Year Growth | | :--- | :--- | :--- | | Total Sales Volume | 2.631 | 40.0% | | Wholesale Gas Volume | 1.62 | 48.3% | | Retail Gas Volume | 0.92 | 31.5% | | CNG/LNG Gas Volume | 0.092 | 4.8% | Natural Gas Business Financial Indicators (RMB) | Natural Gas Business Financial Indicator (RMB) | 2018 Data | Year-on-Year Growth | | :--- | :--- | :--- | | Sales Revenue | 6.551 billion | 65.55% | | Operating Profit | 399 million | 108.9% | | Gross Margin | 11.61% | Increased by 0.01 percentage points | [Analysis of Financial Condition and Operating Results](index=26&type=section&id=Management%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Operating%20Results) In 2018, the group's overall performance achieved substantial growth, with net profit increasing by **42.58% to RMB 1.575 billion** and net profit attributable to the parent company growing by **35.00% to RMB 1.269 billion**, driven by a **41.33% increase in total revenue** from both natural gas and wind power businesses, while operating expenses rose with business expansion, but profitability significantly improved, and the company's financial position remained stable, with the net debt-to-equity ratio slightly decreasing from **67% to 66%** - In 2018, the group's total revenue was **RMB 9.975 billion**, a **41.33% year-on-year increase**, with natural gas business revenue growing by **65.55%** and wind power business revenue by **10.35%**[59](index=59&type=chunk) - Total operating expenses were **RMB 7.837 billion**, a **45.83% year-on-year increase**, primarily due to a significant rise in natural gas procurement costs with increased sales volume[61](index=61&type=chunk) - Trade receivables and bills receivable increased by **RMB 549 million to RMB 3.296 billion**, mainly due to an increase in uncollected renewable energy tariff surcharge subsidies for the wind power business[68](index=68&type=chunk) Capital Expenditures (RMB Thousand) | Capital Expenditure (RMB Thousand) | 2018 | 2017 | Change Rate | | :--- | :--- | :--- | :--- | | Natural Gas | 638,546 | 443,506 | +43.98% | | Wind Power and Solar | 4,484,152 | 3,477,966 | +28.93% | | Total | 5,124,805 | 3,921,751 | +30.68% | [2019 Work Outlook](index=29&type=section&id=2019%20Work%20Outlook) Looking ahead to 2019, the group will seize opportunities from ecological civilization construction and energy revolution, with the wind power business focusing on resource development, especially projects supporting external transmission channels, and strengthening engineering control and information technology, while the natural gas business will expand market share, integrate the downstream industrial chain, and accelerate key long-distance pipeline projects, and the company will also continue to broaden financing channels and innovate financing methods to meet future capital needs - Wind power business outlook: Actively seize resources, tightly control comprehensive engineering management, solidify safety production foundations, and strengthen information technology construction[76](index=76&type=chunk)[77](index=77&type=chunk) - Natural gas business outlook: Expand market share, integrate the downstream industrial chain, and accelerate progress on key long-distance pipeline projects such as Hebei Central Ten Counties Phase III and Beijing-Handan Re-line[78](index=78&type=chunk) - Financing outlook: Broaden financing channels, innovate financing methods, consider asset securitization, financial leasing, insurance funds, and other measures to ensure the group's stable development[79](index=79&type=chunk) [Risk Factors and Risk Management](index=31&type=section&id=Risk%20Factors%20and%20Risk%20Management) The company faces key risks including wind resource uncertainty, declining electricity prices, curtailment issues, and construction management difficulties in its wind power business; winter supply guarantee responsibilities and accounts receivable recovery risks in its natural gas business; and the impact of interest rate fluctuations on funding costs, for which the company has implemented corresponding risk management measures such as prioritizing projects with good grid conditions, establishing a multi-source gas supply system, accelerating accounts receivable collection, and broadening financing channels - Wind power business risks: Wind resource fluctuations, declining electricity prices (wind-coal parity), wind curtailment, and difficulties in engineering construction management[80](index=80&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk)[84](index=84&type=chunk) - Natural gas business risks: Significant responsibility for winter supply guarantee, requiring stable supply; accounts receivable recovery, while controllable, still requires time[85](index=85&type=chunk)[86](index=86&type=chunk) - Interest rate risk: The company has substantial capital expenditures and high demand for borrowed funds, so interest rate changes will affect funding costs; the company will address this by expanding financing channels and securing optimal interest rates[87](index=87&type=chunk) [Human Resources](index=34&type=section&id=Human%20Resources) This section details the company's employee structure, talent management strategies, and training initiatives [Human Resources](index=34&type=section&id=Human%20Resources) As of the end of 2018, the group had **2,221 employees** with an average age of **31.64 years**, and **58%** holding a bachelor's degree or higher, with the company continuously improving its recruitment, training, and compensation performance management systems around its core industries, adhering to performance-oriented compensation, adopting a combination of internal and external recruitment, and focusing on multi-level talent development and cultivation to support the group's strategic growth Employee Composition | Employee Composition | Number/Percentage | | :--- | :--- | | Total Employees | 2,221 people | | Wind Power, Solar Business | 960 people | | Natural Gas Business | 1,191 people | | Bachelor's Degree and Above | 1,291 people (58%) | - The company's human resources strategy aims to establish an organizational structure adaptable to rapid development, providing support for strategic implementation[90](index=90&type=chunk) - The company is committed to talent development, enhancing employee skills through a combination of internal training, external training, and online courses, and has formulated a three-year development plan for management personnel[93](index=93&type=chunk) [Biographies of Directors, Supervisors, and Senior Management](index=36&type=section&id=Biographies%20of%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) This section provides detailed biographies of the company's non-executive directors, executive directors, independent non-executive directors, supervisors, senior management, and joint company secretaries, including their age, educational background, professional qualifications, and experience in the company and other organizations [Biographies of Directors, Supervisors, and Senior Management](index=36&type=section&id=Biographies%20of%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) This chapter provides detailed personal biographies of the company's non-executive directors, executive directors, independent non-executive directors, supervisors, senior management, and joint company secretaries, including their age, educational background, professional qualifications, and employment history within the company and other organizations [Report of the Board of Directors](index=42&type=section&id=Report%20of%20the%20Board%20of%20Directors) This section reviews the company's business performance in 2018, discusses share capital, A-share IPO, dividend policy, key customers and suppliers, related party transactions, and significant legal proceedings [Business Review](index=42&type=section&id=Business%20Review) The Board of Directors reviewed the 2018 business, noting rapid growth in wind power and natural gas, compliance with relevant laws and regulations without environmental pollution incidents, outlining key risks, expressing optimism for 2019 business development, and emphasizing the company's good relationships with employees, customers, and suppliers, as well as its commitment to environmental protection 2018 Key Performance Indicators | 2018 Key Performance Indicator | Data | Year-on-Year Growth | | :--- | :--- | :--- | | Electricity Sales | 7.397 billion kWh | 10.5% | | Natural Gas Sales | 2.631 billion cubic meters | 40% | | Operating Revenue | 9.975 billion RMB | 41.3% | | Total Profit | 1.743 billion RMB | 44.8% | | Net Profit | 1.575 billion RMB | 42.5% | | Net Profit Attributable to Parent Company | 1.269 billion RMB | 35.0% | [Share Capital and Securities Issuance](index=45&type=section&id=Share%20Capital) As of the end of 2018, the company's total share capital was **3.715 billion shares**, with **RMB 590 million** in perpetual green corporate bonds and **RMB 1.5 billion** in three tranches of ultra-short-term financing bonds issued during the reporting period, primarily for green industry projects, debt repayment, and working capital, while the use of **HKD 1.564 billion** raised from the 2014 H-share placement was also disclosed, with most allocated to wind power and natural gas projects - In 2018, **RMB 590 million** in perpetual green corporate bonds and three tranches totaling **RMB 1.5 billion** in ultra-short-term financing bonds were issued[114](index=114&type=chunk)[115](index=115&type=chunk) - As of the end of 2018, approximately **78.70%** of the **HKD 1.564 billion** raised from the 2014 H-share placement had been used for wind power and natural gas businesses, **13.55%** for supplementing working capital, with approximately **HKD 121 million** remaining unused[116](index=116&type=chunk) [A-share Initial Public Offering](index=47&type=section&id=A-share%20Initial%20Public%20Offering) The company plans to issue no more than **134,750,000 A-shares** in its initial public offering on the Shanghai Stock Exchange, with the A-share issuance plan's validity extended by 12 months in September 2018, and the company receiving the acceptance letter for its A-share issuance application from the China Securities Regulatory Commission on November 2, 2018, with related work progressing orderly - The company's A-share issuance application was accepted by the China Securities Regulatory Commission on November 2, 2018[117](index=117&type=chunk) [Profit Distribution and Dividend Policy](index=47&type=section&id=Profit%20Distribution%20and%20Dividend%20Policy) The Board of Directors recommends a final dividend of **RMB 0.125 per share (tax inclusive)** for 2018, totaling approximately **RMB 464 million**, with detailed policies for withholding enterprise income tax and individual income tax on dividends for H-share non-resident enterprise shareholders and individual shareholders, typically at a **10% rate** or as determined by relevant tax agreements - A final dividend of **RMB 0.125 per share (tax inclusive)** is recommended for the 2018 financial year[119](index=119&type=chunk) [Major Customers and Suppliers](index=49&type=section&id=Major%20Customers%20and%20Suppliers) In 2018, the group's procurement and sales concentration was relatively high, with the top five suppliers accounting for **61.41%** of total procurement, and the largest supplier accounting for **34.42%**, while the top five customers accounted for **42.66%** of total sales, and the largest customer accounted for **22.29%** - Top five suppliers accounted for **61.41%** of procurement, with the largest supplier accounting for **34.42%**[122](index=122&type=chunk) - Top five customers accounted for **42.66%** of sales, with the largest customer accounting for **22.29%**[122](index=122&type=chunk) [Related Party Transactions](index=53&type=section&id=Related%20Party%20Transactions) During the reporting period, the group engaged in multiple related party transactions, including one-off transactions such as the controlling shareholder Hebei Construction & Investment Group's capital injection into subsidiary Yanshan Guyuan and the establishment of joint venture Hebei Gas, as well as continuing related party transactions like the greenhouse gas emission reduction project management agreement with Jiantou Guorong, office lease agreement with Hebei Construction & Investment Group, financial services framework agreement with Huihai Leasing, and financial services framework agreement with the Group Finance Company, all of which followed relevant disclosure and approval procedures - One-off related party transactions: Controlling shareholder Hebei Construction & Investment Group injected **RMB 50 million** into Yanshan Guyuan; established Hebei Gas Company with Hebei Construction & Investment Group with a registered capital of **RMB 100 million**, where the company holds a **55% stake**[133](index=133&type=chunk)[134](index=134&type=chunk) - Continuing related party transactions: Signed a financial services framework agreement (financial leasing and factoring) with Huihai Leasing, and renewed the financial services framework agreement (deposits, loans, etc.) with the Group Finance Company[139](index=139&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk) [Significant Legal Proceedings](index=61&type=section&id=Significant%20Legal%20Proceedings) During the reporting period, the group was involved in several significant lawsuits or arbitration cases, with the arbitration case against Hebei Electric Power Construction No. 1 Company having been executed, the outstanding payment case with Yuanhua Glass being fulfilled according to a settlement agreement, an arbitration between Laiyuan Xintian and Guodian United Power regarding a wind turbine procurement contract involving a substantial amount still awaiting ruling, and Hebei Natural Gas having applied for compulsory enforcement regarding outstanding payments from Daguanming Company - Laiyuan Xintian and Guodian United Power are in arbitration regarding a wind turbine procurement contract, with Guodian United claiming approximately **RMB 180 million** and Laiyuan Xintian counter-claiming approximately **RMB 170 million**, and the case is still awaiting ruling[151](index=151&type=chunk) - Hebei Natural Gas applied to the court for compulsory enforcement regarding outstanding payments totaling **RMB 76.9 million** plus corresponding interest from Daguanming Company and its affiliates, and the case is still in progress[151](index=151&type=chunk)[152](index=152&type=chunk) [Corporate Governance Report](index=63&type=section&id=Corporate%20Governance%20Report) This section outlines the composition and responsibilities of the Board of Directors and its committees, as well as the company's risk management and internal control systems [Board of Directors](index=64&type=section&id=Board%20of%20Directors) During the reporting period, the Board of Directors comprised **11 directors**, including **5 non-executive directors, 2 executive directors, and 4 independent non-executive directors**, complying with listing rules, with clearly defined responsibilities for major company decisions, holding **15 meetings in 2018** with **100% attendance** by all directors, and the positions of Chairman and President held by different individuals to ensure independent responsibilities Board of Directors Composition | Board of Directors Composition | Number | | :--- | :--- | | Non-Executive Directors | 5 | | Executive Directors | 2 | | Independent Non-Executive Directors | 4 | | **Total** | **11** | - In 2018, the Board of Directors held **15 meetings**, with a **100% attendance rate** for all directors[164](index=164&type=chunk) [Board Committees](index=69&type=section&id=Board%20Committees) The Board of Directors has four committees: Audit, Remuneration and Appraisal, Nomination, and Strategy and Investment, with the Audit Committee holding four meetings to review annual audits, internal controls, and accounting policy changes, the Remuneration and Appraisal Committee holding one meeting to approve executive compensation, the Strategy and Investment Committee holding one meeting to review A-share issuance proposals, and the Nomination Committee not holding any meetings during the year - The Audit Committee held **4 meetings** during the year, reviewing important matters such as annual audit results, internal audit and risk management reports, and changes in accounting policies[171](index=171&type=chunk)[172](index=172&type=chunk) - The Remuneration and Appraisal Committee held **1 meeting**, approving the 2017 annual salary realization plan for the company's management team[173](index=173&type=chunk) [Risk Management and Internal Control](index=74&type=section&id=Risk%20Management%20and%20Internal%20Control) In 2018, the group continued to improve its risk management and internal control system, focusing on annual risk assessment, major risk early warning and response, updating its risk event database, refining the major risk early warning mechanism, and monitoring quarterly, while also advancing institutional management system construction, implementing policies at the job level, and providing internal control training to frontline employees, with the Board of Directors reviewing and deeming the risk management and internal control systems effective and sufficient - The Board of Directors confirmed that it has reviewed the risk management and internal control systems as of December 31, 2018, and considers them effective and sufficient[182](index=182&type=chunk) [Report of the Supervisory Committee](index=79&type=section&id=Report%20of%20the%20Supervisory%20Committee) This section details the Supervisory Committee's composition, meeting activities, and oversight of the company's operations, financial status, director and senior management performance, related party transactions, and information disclosure [Report of the Supervisory Committee](index=79&type=section&id=Report%20of%20the%20Supervisory%20Committee) During the reporting period, the Supervisory Committee, composed of **6 supervisors**, held three meetings to review important proposals such as the annual financial report, A-share issuance plan, and interim results, overseeing the company's operations, financial status, performance of directors and senior management, related party transactions, and information disclosure by attending Board and shareholder meetings and reviewing proposals, concluding that the company operated legally and compliantly, directors and senior management diligently performed their duties, financial reports were true and fair, and no actions detrimental to the company or shareholders were found - The Supervisory Committee believes that the company's operations are legal and compliant, directors and senior management are diligent in their duties, and no illegal or shareholder-detrimental actions were found[196](index=196&type=chunk)[197](index=197&type=chunk) - The Supervisory Committee believes that the company's financial statements truly and fairly reflect its financial position and operating results, related party transactions are fair and reasonable, and information disclosure is true, accurate, and complete[198](index=198&type=chunk)[199](index=199&type=chunk)[200](index=200&type=chunk) [Independent Auditor's Report](index=82&type=section&id=Independent%20Auditor's%20Report) This section presents the independent auditor's opinion on the consolidated financial statements and highlights key audit matters [Independent Auditor's Report](index=82&type=section&id=Independent%20Auditor's%20Report) Ernst & Young issued a standard unqualified audit opinion, stating that the consolidated financial statements truly and fairly reflect the group's consolidated financial position as of December 31, 2018, and its financial performance and cash flows for the year, in accordance with International Financial Reporting Standards, with key audit matters including impairment assessment of trade receivables and bills receivable, goodwill impairment, and provision for restoration costs - Audit Opinion: Ernst & Young believes that the financial statements truly and fairly reflect the group's financial position and operating results[202](index=202&type=chunk) - Key Audit Matters include: - **Impairment assessment of trade receivables and bills receivable**: Involves management's judgment on collectability, especially after adopting new accounting standards - **Goodwill impairment**: Impairment assessment procedures are complex, requiring high judgment on revenue growth rates, gross margins, and discount rates - **Provision for restoration costs**: Involves estimates of future cash outflows and discount rates for restoring infrastructure sites at the end of service concession periods[204](index=204&type=chunk)[207](index=207&type=chunk)[208](index=208&type=chunk) [Consolidated Financial Statements](index=86&type=section&id=Consolidated%20Financial%20Statements) This section presents the consolidated statements of profit or loss and other comprehensive income, financial position, and cash flows for the group [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=88&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the year ended 2018, the group achieved operating revenue of **RMB 9.975 billion**, a **41.4% year-on-year increase**, with gross profit of **RMB 2.860 billion**, a **23.9% year-on-year increase**, and net profit reaching **RMB 1.575 billion**, a **42.6% year-on-year increase**, while net profit attributable to owners of the parent company was **RMB 1.269 billion**, a **35.0% year-on-year increase**, and basic earnings per share were **RMB 33.37 cents** Consolidated Statement of Profit or Loss and Other Comprehensive Income (RMB Thousand) | Item (RMB Thousand) | 2018 | 2017 | | :--- | :--- | :--- | | Revenue | 9,975,409 | 7,057,582 | | Gross Profit | 2,859,845 | 2,307,905 | | Operating Profit | 2,238,542 | 1,764,244 | | Profit Before Tax | 1,743,158 | 1,203,874 | | Profit for the Year | 1,575,164 | 1,104,727 | | Attributable to Owners of the Company | 1,268,506 | 939,616 | | Basic Earnings Per Share | 33.37 cents | 25.29 cents | [Consolidated Statement of Financial Position](index=89&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of December 31, 2018, the group's total assets were **RMB 39.161 billion**, a **14.2% increase** from the end of the previous year, with non-current assets at **RMB 32.743 billion**, total liabilities at **RMB 26.764 billion**, a debt-to-asset ratio of **68.3%**, and total equity at **RMB 12.397 billion**, of which equity attributable to owners of the parent company was **RMB 10.036 billion** Consolidated Statement of Financial Position (RMB Thousand) | Item (RMB Thousand) | December 31, 2018 | December 31, 2017 | | :--- | :--- | :--- | | Total Non-Current Assets | 32,742,655 | 28,755,306 | | Total Current Assets | 6,418,173 | 5,532,783 | | **Total Assets** | **39,160,828** | **34,288,089** | | Total Current Liabilities | 8,602,445 | 9,472,985 | | Total Non-Current Liabilities | 18,161,831 | 14,314,014 | | **Total Liabilities** | **26,764,276** | **23,786,999** | | **Total Equity** | **12,396,552** | **10,501,090** | [Consolidated Statement of Cash Flows](index=92&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) In 2018, the group's net cash flow from operating activities was **RMB 3.156 billion**, a **19.5% year-on-year increase**, with net cash outflow from investing activities of **RMB 3.967 billion**, primarily for property, plant, and equipment acquisitions, and net cash inflow from financing activities of **RMB 945 million**, resulting in a year-end cash and cash equivalents balance of **RMB 2.240 billion**, an increase of **RMB 135 million** from the beginning of the year Consolidated Statement of Cash Flows (RMB Thousand) | Item (RMB Thousand) | 2018 | 2017 | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 3,156,076 | 2,641,796 | | Net Cash Flow Used in Investing Activities | (3,966,886) | (3,570,421) | | Net Cash Flow from Financing Activities | 945,465 | 1,562,639 | | Net Increase in Cash and Cash Equivalents | 134,655 | 634,014 | | Cash and Cash Equivalents at Year-End | 2,240,325 | 2,110,035 | [Notes to the Financial Statements](index=94&type=section&id=Notes%20to%20the%20Financial%20Statements) This section provides detailed notes on changes in accounting policies and disclosures, operating segment information, trade receivables and bills receivable, interest-bearing bank and other borrowings, related party transactions, and financial risk management objectives and policies [Changes in Accounting Policies and Disclosures](index=101&type=section&id=Changes%20in%20Accounting%20Policies%20and%20Disclosures) This year, the group first adopted new standards such as IFRS 9 "Financial Instruments" and IFRS 15 "Revenue from Contracts with Customers," with IFRS 9 impacting the classification, measurement, and impairment of financial instruments through the expected credit loss model, and IFRS 15 establishing a new five-step revenue recognition model, which did not significantly affect the timing and amount of revenue recognition for gas and electricity sales but primarily impacted presentation and disclosure, such as reclassifying "customer advances" to "contract liabilities" - First adoption of IFRS 9 "Financial Instruments," introducing the expected credit loss model and adjusting the classification and measurement of financial assets[244](index=244&type=chunk)[248](index=248&type=chunk) - First adoption of IFRS 15 "Revenue from Contracts with Customers," with no significant impact on the timing and amount of revenue recognition, but reclassifying the original **RMB 778 million** of "customer advances" to "contract liabilities"[255](index=255&type=chunk)[260](index=260&type=chunk) [Operating Segment Information](index=138&type=section&id=Operating%20Segment%20Information) The group's business is divided into two operating segments: natural gas, and wind power and solar, with the natural gas segment generating **RMB 6.551 billion** in revenue and **RMB 471 million** in segment profit in 2018, while the wind power and solar segment generated **RMB 3.422 billion** in revenue and **RMB 1.190 billion** in segment profit, and the asset scale of the wind power and solar segment is significantly larger than that of the natural gas segment, with revenue from a single largest customer (wind power and solar segment) accounting for **22.3%** of the group's total revenue during the reporting period Segment Revenue, Profit, and Assets (RMB Thousand) | Segment | Revenue (RMB Thousand) | Segment Profit (RMB Thousand) | Segment Assets (RMB Thousand) | | :--- | :--- | :--- | :--- | | Natural Gas | 6,550,854 | 471,312 | 6,335,983 | | Wind Power and Solar | 3,422,314 | 1,189,727 | 31,986,944 | - As of the end of 2018, revenue from the single largest customer in the wind power and solar segment was **RMB 2.224 billion**, accounting for **22.3%** of the group's total revenue[370](index=370&type=chunk) [Trade Receivables and Bills Receivable](index=174&type=section&id=Trade%20Receivables%20and%20Bills%20Receivable) As of the end of 2018, net trade receivables and bills receivable increased to **RMB 3.296 billion** from **RMB 2.747 billion** in the previous year, with an impairment provision of **RMB 526 million**, and an aging analysis showing that approximately **72%** of receivables were within one year, while **RMB 491 million** of bills receivable were classified as financial assets measured at fair value through other comprehensive income Trade Receivables and Bills Receivable (RMB Thousand) | Item (RMB Thousand) | December 31, 2018 | December 31, 2017 | | :--- | :--- | :--- | | Trade Receivables and Bills Receivable | 3,822,543 | 3,105,576 | | Less: Impairment | (526,476) | (358,992) | | **Net Amount** | **3,296,067** | **2,746,584** | [Interest-Bearing Bank and Other Borrowings](index=184&type=section&id=Interest-Bearing%20Bank%20and%20Other%20Borrowings) As of the end of 2018, the group's total interest-bearing bank and other borrowings amounted to **RMB 21.327 billion**, an increase of **12.7%** from **RMB 18.925 billion** at the end of the previous year, with short-term borrowings (including current portion due within one year) at **RMB 4.644 billion** and long-term borrowings at **RMB 16.683 billion**, primarily used to support business expansion and project construction Interest-Bearing Borrowings by Classification (RMB Thousand) | Borrowing Classification (RMB Thousand) | December 31, 2018 | December 31, 2017 | | :--- | :--- | :--- | | Current Portion | 4,643,777 | 5,707,549 | | Non-Current Portion | 16,683,183 | 13,217,189 | | **Total** | **21,326,960** | **18,924,738** | [Related Party Transactions](index=190&type=section&id=Related%20Party%20Transactions) The group engages in multiple related party transactions with its controlling stockholder Hebei Construction & Investment Group and its subsidiaries (such as fellow subsidiaries, joint ventures, and associates), including significant transactions like deposits and loans with the Group Finance Company, financial leasing with Huihai Leasing, office rent and guarantee fees paid to Hebei Construction & Investment Group, and cooperation on greenhouse gas emission reduction projects with Jiantou Guorong, all conducted in the ordinary course of business - Significant deposit and loan transactions with the Group Finance Company, with deposit balances of approximately **RMB 1.596 billion** and total loan balances of **RMB 854 million** as of the end of 2018[535](index=535&type=chunk)[536](index=536&type=chunk) - Ongoing financial leasing transactions with associate Huihai Leasing, with total finance lease payables of **RMB 1.236 billion** as of the end of 2018[543](index=543&type=chunk)[512](index=512&type=chunk) [Financial Risk Management Objectives and Policies](index=201&type=section&id=Financial%20Risk%20Management%20Objectives%20and%20Policies) The group faces key financial risks including interest rate risk, foreign currency risk, credit risk, and liquidity risk, managing interest rate risk by monitoring fixed versus floating rate borrowing portfolios, with limited foreign currency exposure primarily from HKD cash, credit risk managed through customer credit verification and continuous monitoring, and liquidity risk addressed by maintaining sufficient bank credit lines and a reasonable debt maturity structure, with the net debt-to-equity ratio at **66%** at the end of 2018, maintaining a stable level - The net debt-to-equity ratio (net debt / (capital + net debt)) decreased from **67% in 2017 to 66% in 2018**, indicating a stable capital structure[592](index=592&type=chunk)[593](index=593&type=chunk) - As of the end of 2018, the group had secured bank credit facilities of **RMB 27.238 billion**, of which **RMB 11.556 billion** was utilized, leaving ample unused credit lines to manage liquidity risk[587](index=587&type=chunk) [Definitions](index=210&type=section&id=Definitions) This section defines specific terms and abbreviations used in the report, such as "CNG" (Compressed Natural Gas), "Controlled Installed Capacity," "The Group," and "Hebei Construction & Investment Group," to ensure accurate understanding of the report's content [Definitions](index=210&type=section&id=Definitions) This chapter defines specific terms and abbreviations used throughout the report, such as "CNG" (Compressed Natural Gas), "Controlled Installed Capacity," "The Group," and "Hebei Construction & Investment Group," to ensure readers accurately understand the report's content [Company Information](index=213&type=section&id=Company%20Information) This section provides essential company details, including legal name, registered office, Hong Kong principal place of business, website, stock code, legal representative, board and supervisory committee members, joint company secretaries, authorized representatives, independent auditor, legal counsel, principal bankers, and H-share registrar contact information [Company Information](index=213&type=section&id=Company%20Information) This chapter provides the company's basic information, including its legal name, registered office address, Hong Kong principal place of business, website, stock code (00956), legal representative, list of Board and Supervisory Committee members, joint company secretaries, authorized representatives, independent auditor, legal counsel, principal banks, and detailed contact information for the H-share share registrar