Operational Capacity and Projects - The company operates 67 power plants with a total installed capacity of approximately 58,448 MW, including 43,160 MW from coal-fired generation and 7,340 MW from gas-fired generation[4]. - Renewable energy capacity amounts to approximately 7,948 MW, comprising hydro, wind, and solar power[4]. - The company holds a 100% ownership in several key power plants, including Zouxian Power Plant (2,575 MW) and Shiliquan Power Plant (2,120 MW)[5]. - The company has a 69% stake in Zouxian Company, which has an installed capacity of 2,000 MW[5]. - The company has a 75% stake in Laizhou Company, with an installed capacity of 4,001.1 MW[5]. - The total installed capacity of Huadian International Power Co., Ltd. is 6,944.4 MW, with an ownership stake of 82.56% in Hubei Company[6]. - The company has a total of 12 power plants in Hubei, with a combined capacity of 6,944.4 MW, including 2,570 MW from Xiangyang Company, which has a 60.10% ownership[7]. - The company owns 100% of several renewable energy projects, including 920 MW from Luding Hydropower Company and 1,541.6 MW from Ningxia New Energy Company[8]. - The company has a significant presence in Sichuan, with 1,320 MW from Huadian Xinxing Company and 2,400 MW from Guang'an Company, holding 90% and 80% ownership respectively[6]. - The installed capacity of the company's thermal power plants varies, with the largest being 6,944.4 MW in Hubei, while smaller plants like the 12.55 MW in Shijiazhuang provide additional capacity[6]. Financial Performance - The company achieved a revenue of approximately RMB 89.38 billion in 2020, with a net profit attributable to shareholders of about RMB 4.17 billion, resulting in a basic earnings per share of RMB 0.329[16]. - The total electricity generation was 207.32 million MWh, a decrease of 3.62% year-on-year, while the heat supply increased by 16.98% to 145 million GJ[16]. - The group's revenue for 2020 was approximately RMB 89.38 billion, a decrease of about 2.58% compared to 2019, with electricity sales revenue of RMB 70.19 billion, down approximately 4.12%[19]. - The operating profit for 2020 was approximately RMB 8.79 billion, an increase of about 6.99% year-on-year, primarily due to a decrease in coal prices[19]. - The profit attributable to equity holders of the company for the year was approximately RMB 4.17 billion, with basic earnings per share of approximately RMB 0.329[19]. - The company maintained a debt-to-asset ratio of 60.11% at year-end, a decrease of 5.5 percentage points from the beginning of the year, reflecting strong financial health compared to peers[16]. - The company reported a significant increase in operational efficiency, with over 30 years of experience among its senior management team in power production and management[27]. Strategic Initiatives and Future Plans - The company has plans for future expansion in renewable energy projects to enhance its portfolio[4]. - The company aims to increase its market share in the energy sector through strategic acquisitions and partnerships[4]. - Future expansion plans include increasing the share of renewable energy in the overall energy mix, aligning with national energy policies[8]. - The company is exploring potential mergers and acquisitions to enhance its market position and expand its operational footprint in the energy sector[8]. - The company plans to invest around RMB 17 billion in 2021 for power project infrastructure, environmental protection, and energy-saving technology upgrades[23]. - The company aims to enhance the profitability of its thermal power units by improving energy efficiency and implementing flexible modifications[24]. - The company is actively pursuing new product development initiatives to meet evolving market demands and regulatory requirements[29]. Environmental and Social Responsibility - The company is focused on improving operational efficiency and reducing carbon emissions in line with national energy policies[4]. - The company is committed to ongoing research and development of new technologies to optimize energy production and consumption[4]. - The company has implemented energy-saving measures for coal-fired units, achieving significant results in air pollution control and steady progress in water pollution prevention[17]. - The company is actively involved in the development of new renewable energy projects, including solar and wind power, to enhance its sustainability efforts[8]. - The company has committed to ensuring uninterrupted power and heat supply during the COVID-19 pandemic, demonstrating its social responsibility[16]. - The company emphasizes the importance of carbon emission trading and aims to enhance its environmental protection efforts[25]. Governance and Compliance - The company has established a strict code of conduct for directors and employees regarding the trading of company securities, which aligns with the Hong Kong Listing Rules[103]. - The independent non-executive directors confirmed their independence in accordance with the Hong Kong Listing Rules[65]. - The company has adopted a code of conduct for securities trading by directors and supervisors, ensuring compliance with the required standards[68]. - The board has established several committees, including the Audit Committee, Remuneration and Assessment Committee, Nomination Committee, and Strategic Committee[110]. - The company emphasizes transparency, accountability, and independence in its governance principles[103]. - The board's composition includes a diverse range of expertise, with one independent non-executive director being an accounting professional[104]. Risk Management and Internal Control - The company has established a risk management and internal control system, which is reviewed at least annually to ensure its effectiveness in safeguarding shareholder interests[118]. - The audit committee is tasked with reviewing the completeness of the company's financial statements and monitoring compliance with legal and regulatory requirements[117]. - The company has implemented a code of conduct for directors and supervisors regarding securities trading, ensuring compliance with the Standard Code[115]. - The board is responsible for the ongoing supervision of the company's risk management and internal control systems[118]. - The company has integrated risk management and internal control into daily operations, continuously assessing risks and reporting to relevant management departments[120]. Shareholder Engagement and Dividend Policy - The company plans to distribute at least 50% of the annual distributable profits in cash from 2020 to 2022, with a minimum dividend of RMB 0.20 per share[18]. - The proposed final cash dividend for the fiscal year ending December 31, 2020, is RMB 0.25 per share, totaling approximately RMB 2.466 billion, subject to shareholder approval[46]. - The company emphasizes a cash dividend policy, prioritizing cash returns to investors, with a minimum cash dividend ratio of 40%[132]. - The company has established a hotline and email for shareholders to directly contact the board for inquiries[135]. Financial Reporting and Audit - The company’s financial statements for the year ended December 31, 2020, are prepared in accordance with International Financial Reporting Standards[64]. - The independent auditor's report confirmed that the consolidated financial statements fairly reflect the group's financial position as of December 31, 2020[140]. - The audit committee reviewed the annual performance and financial statements for the fiscal year ending December 31, 2020[98]. - The company conducted a comprehensive internal control evaluation in 2020, confirming no significant internal control deficiencies were found, ensuring compliance with relevant regulations[121].

Company Profile and Key Financial Indicators [Company Information](index=5&type=section&id=%E5%85%AC%E5%8F%B8%E4%BF%A1%E6%81%AF) Huadian Power International Corporation Limited (HDPI) is a comprehensive energy company dual-listed in Shanghai and Hong Kong, with its main office in Beijing - The company is dual-listed on the Shanghai Stock Exchange (**A-share code: 600027**) and the Hong Kong Stock Exchange (**H-share code: 01071**)[12](index=12&type=chunk) [Key Accounting Data and Financial Indicators](index=6&type=section&id=%E4%B8%BB%E8%A6%81%E4%BC%9A%E8%AE%A1%E6%95%B0%E6%8D%AE%E5%92%8C%E8%B4%A2%E5%8A%A1%E6%8C%87%E6%A0%87) In 2020, operating revenue decreased by 3.11% to RMB 90.744 billion, while net profit attributable to shareholders significantly increased by 22.68% to RMB 4.179 billion Key Accounting Data | Major Accounting Data | 2020 (RMB thousand) | 2019 (RMB thousand) | Year-on-year change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 90,744,016 | 93,654,431 | -3.11% | | Net Profit Attributable to Shareholders | 4,179,447 | 3,406,920 | 22.68% | | Net Cash Flow from Operating Activities | 25,248,152 | 21,376,881 | 18.11% | | Total Assets | 234,611,122 | 229,875,595 | 2.06% | Key Financial Indicators | Major Financial Indicators | 2020 | 2019 | Year-on-year change (%) | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (yuan/share) | 0.33 | 0.29 | 13.79% | | Weighted Average Return on Net Assets (%) | 7.03% | 6.46% | Increased by 0.57 percentage points | [Differences in Accounting Data Under Domestic and International Accounting Standards](index=7&type=section&id=%E5%A2%83%E5%86%85%E5%A4%96%E4%BC%9A%E8%AE%A1%E5%87%86%E5%88%99%E4%B8%8B%E4%BC%9A%E8%AE%A1%E6%95%B0%E6%8D%AE%E5%B7%AE%E5%BC%82) In 2020, the company's net profit and net assets differed under Chinese and International Accounting Standards, with IFRS net profit at RMB 4.167 billion and net assets at RMB 73.145 billion after adjustments Accounting Data Differences | Item | Net Profit (RMB thousand) | Net Assets (RMB thousand) | | :--- | :--- | :--- | | **Under Chinese Accounting Standards** | **4,179,447** | **72,088,981** | | Adjustment for business combinations under common control | -249,191 | 2,063,003 | | Adjustment for government grants | 33,592 | -286,801 | | Adjustment for maintenance and safety production funds | 61,603 | 78,320 | | **Under International Accounting Standards** | **4,166,756** | **73,145,361** | [Quarterly Key Financial Data](index=8&type=section&id=%E5%88%86%E5%AD%A3%E5%BA%A6%E4%B8%BB%E8%A6%81%E8%B4%A2%E5%8A%A1%E6%95%B0%E6%8D%AE) Q4 2020 saw the highest operating revenue at RMB 26.928 billion but the lowest net profit attributable to parent company shareholders at RMB 547 million Quarterly Financial Data | Financial Indicators (RMB thousand) | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 22,116,437 | 19,415,049 | 22,284,300 | 26,928,230 | | Net Profit Attributable to Shareholders | 1,189,361 | 1,196,627 | 1,246,097 | 547,362 | [Non-Recurring Gains and Losses Items and Amounts](index=8&type=section&id=%E9%9D%9E%E5%B8%B8%E8%A7%84%E6%80%A7%E6%8D%9F%E7%9B%8A%E9%A1%B9%E7%9B%AE%E5%92%8C%E9%87%91%E9%A2%9D) In 2020, non-recurring gains and losses totaled RMB 508 million, primarily from government grants and other non-operating income/expenses, a significant shift from a 2019 loss Non-Recurring Gains and Losses | Non-Recurring Gains and Losses Items (RMB thousand) | 2020 Amount | 2019 Amount | | :--- | :--- | :--- | | Gains or losses from disposal of non-current assets | 81,716 | -54,072 | | Government grants recognized in current profit or loss | 267,320 | 326,627 | | Other non-operating income and expenses | 237,275 | 15,948 | | **Total** | **508,181** | **-30,989** | Company Business Overview [Principal Business, Business Model, and Industry Conditions](index=10&type=section&id=%E4%B8%BB%E8%A6%81%E4%B8%9A%E5%8A%A1%E3%80%81%E7%BB%8F%E8%90%A5%E6%A8%A1%E5%BC%8F%E5%8F%8A%E8%A1%8C%E4%B8%9A%E6%83%85%E5%86%B5) The company is a large integrated energy company in China, primarily engaged in power plant construction and operation across 14 provinces, with 74% coal-fired and 26% clean energy capacity Controlling Installed Capacity by Power Type | Power Type | Controlling Installed Capacity (MW) | Proportion | | :--- | :--- | :--- | | Coal-fired generating units | 43,160.0 | ~73.8% | | Gas-fired power generation | 7,340.0 | ~12.6% | | Renewable energy (hydro, wind, solar) | 7,948.0 | ~13.6% | | **Total** | **~58,448.0** | **100%** | - The company primarily generates revenue by selling electricity and heat products in the regions where its power assets are located, accounting for approximately **86% of its main business revenue**[23](index=23&type=chunk) [Analysis of Core Competencies](index=10&type=section&id=%E6%A0%B8%E5%BF%83%E7%AB%9E%E4%BA%89%E5%8A%9B%E5%88%86%E6%9E%90) The company's core competencies include its significant scale, advanced energy-saving and environmental protection equipment, extensive management experience, and robust corporate governance - Over **90% of the company's thermal power units are large-capacity, high-efficiency units of 300 MW and above**, with approximately **60% being 600 MW and above**, significantly higher than the national average[25](index=25&type=chunk) - All coal-fired units have achieved **ultra-low emissions**[25](index=25&type=chunk) - As a public company listed in Hong Kong and Shanghai, the company has established an effective internal management and control system, fostering a positive image in the capital market and demonstrating **strong financing capabilities**[26](index=26&type=chunk) Management Discussion and Analysis of Operations [Overall Business Performance Review](index=12&type=section&id=%E7%BB%8F%E8%90%A5%E6%83%85%E5%86%B5%E8%AE%A8%E8%AE%BA%E4%B8%8E%E5%88%86%E6%9E%90) In 2020, total power generation decreased by 3.62% to 207.317 billion kWh, while heat sales increased by 16.98% to 145 million GJ, with all new capacity being clean energy Core Operating Data | Core Operating Data | 2020 | Year-on-year change | | :--- | :--- | :--- | | Power Generation | 207.317 billion kWh | -3.62% | | Heat Sales | 145 million GJ | +16.98% | | New Generating Units | 1,957.56 MW | All clean energy | [Analysis of Key Operating Performance](index=12&type=section&id=%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%86%85%E4%B8%BB%E8%A6%81%E7%BB%8F%E8%90%A5%E6%83%85%E5%86%B5) Total operating revenue decreased by 3.11% to RMB 90.744 billion, while net profit attributable to parent company shareholders surged by 22.68% to RMB 4.179 billion, driven by lower costs [Analysis of Main Business](index=12&type=section&id=%E4%B8%BB%E8%90%A5%E4%B8%9A%E5%8A%A1%E5%88%86%E6%9E%90) In 2020, operating revenue declined due to lower power generation, while operating costs decreased significantly due to a 9.91% reduction in fuel costs, leading to improved gross profit margins Key Financial Items | Item | Current Period (RMB thousand) | Prior Period (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 90,744,016 | 93,654,431 | -3.11 | | Operating Costs | 76,075,537 | 80,482,483 | -5.48 | | Financial Expenses | 4,432,582 | 5,189,379 | -14.58 | | Net Cash Flow from Operating Activities | 25,248,152 | 21,376,881 | 18.11 | Gross Profit Margin by Business Segment | Business Segment | Operating Revenue (RMB thousand) | Operating Costs (RMB thousand) | Gross Profit Margin (%) | Change in Gross Profit Margin from Prior Year | | :--- | :--- | :--- | :--- | :--- | | Power Generation | 70,185,438 | 56,344,739 | 19.72 | Increased by 2.64 percentage points | | Heat Supply | 6,656,108 | 6,921,609 | -3.99 | Increased by 4.45 percentage points | | Coal Sales | 12,540,697 | 12,603,247 | -0.50 | Decreased by 1.17 percentage points | - Sales to the **top five customers accounted for 54.04% of total annual sales**, with State Grid Shandong Electric Power Company being the largest customer at **27.73%**[36](index=36&type=chunk)[37](index=37&type=chunk) [Analysis of Assets and Liabilities](index=15&type=section&id=%E8%B5%84%E4%BA%A7%E3%80%81%E8%B4%9F%E5%80%BA%E6%83%85%E5%86%B5%E5%88%86%E6%9E%90) Total assets reached RMB 234.611 billion, with construction in progress significantly increasing by 34.15% due to higher capital expenditure, and other equity instruments rising by 52.80% Key Balance Sheet Items | Item Name | Current Period End (RMB thousand) | Change from Prior Period End (%) | Main Reason | | :--- | :--- | :--- | :--- | | Construction in Progress | 22,409,048 | 34.15% | Increase in infrastructure projects | | Other Equity Instruments | 24,645,175 | 52.80% | Issuance of perpetual medium-term notes | - As of December 31, 2020, some of the company's subsidiaries pledged electricity and heat collection rights for approximately **RMB 18.44 billion in borrowings**, and generating units, equipment, land, and mining rights for approximately **RMB 3.971 billion in borrowings**[41](index=41&type=chunk) [Analysis of Industry Operating Information](index=16&type=section&id=%E8%A1%8C%E4%B8%9A%E7%BB%8F%E8%90%A5%E6%80%A7%E4%BF%A1%E6%81%AF%E5%88%86%E6%9E%90) Total power generation decreased by 3.62%, with thermal power down 5.10%, while clean energy generation increased; market-based electricity transactions rose to 59.6% Power Generation and Revenue by Type | Type | Power Generation (billion kWh) | Year-on-year | Revenue (RMB thousand) | Year-on-year | | :--- | :--- | :--- | :--- | :--- | | Thermal Power | 189.719 | -5.10% | 64,450,166 | -6.05% | | Wind Power | 6.410 | 7.66% | 3,032,587 | 5.56% | | Hydropower | 10.240 | 22.54% | 1,983,884 | 10.78% | | Photovoltaic Power | 0.948 | 8.35% | 718,801 | 10.22% | | **Total** | **207.317** | **-3.62%** | **70,185,438** | **-5.05%** | - As of the reporting date, the company's controlling installed capacity was **58,448 MW**, comprising **43,160 MW of coal-fired**, **7,340 MW of gas-fired**, and **7,948 MW of renewable energy**[46](index=46&type=chunk) - In 2020, **1,957.56 MW of new installed capacity was added, all from clean energy projects**; **75 MW of coal-fired generating units were shut down**[54](index=54&type=chunk)[55](index=55&type=chunk) - The proportion of **market-based electricity transactions increased from 53.7% to 59.6%** of total on-grid power[59](index=59&type=chunk) [Discussion and Analysis of Future Development](index=27&type=section&id=%E5%85%AC%E5%8F%B8%E5%85%B3%E4%BA%8E%E5%85%AC%E5%8F%B8%E6%9C%AA%E6%9D%A5%E5%8F%91%E5%B1%95%E7%9A%84%E8%AE%A8%E8%AE%BA%E4%B8%8E%E5%88%86%E6%9E%90) The company aims to become a first-class energy listed company by optimizing its structure, planning 200 billion kWh generation and RMB 17 billion in investments for 2021, while addressing macroeconomic, coal market, and financing risks - The company's 2021 operating plan projects approximately **200 billion kWh of power generation** and plans to invest around **RMB 17 billion** in power project infrastructure, environmental protection, and energy-saving technological upgrades[70](index=70&type=chunk) - The main risks faced by the company include **macroeconomic and electricity market uncertainties**, **coal market price fluctuations**, and **rising financing costs in the capital market**[71](index=71&type=chunk) Significant Matters [Profit Distribution Plan](index=30&type=section&id=%E6%99%AE%E9%80%9A%E8%82%A1%E5%88%A9%E6%B6%A6%E5%88%86%E9%85%8D%E6%88%96%E8%B5%84%E6%9C%AC%E5%85%AC%E7%A7%AF%E9%87%91%E8%BD%AC%E5%A2%9E%E9%A2%84%E6%A1%88) The company proposed a 2020 cash dividend of RMB 0.25 per share, totaling RMB 2.466 billion, representing 75.60% of net profit, and plans for annual cash dividends of at least 50% of distributable profit from 2020-2022 Cash Dividend Distribution | Dividend Year | Dividend per 10 shares (RMB, pre-tax) | Cash Dividend Amount (RMB thousand) | Ratio to Net Profit Attributable to Parent (%) | | :--- | :--- | :--- | :--- | | 2020 | 2.50 | 2,465,744 | 75.60% | | 2019 | 1.46 | 1,439,995 | 50.29% | | 2018 | 0.66 | 650,956 | 42.00% | - The company's 2020-2022 shareholder return plan proposes that annual cash dividends will generally be **no less than 50% of the distributable profit** in the consolidated financial statements, with a minimum dividend of **RMB 0.2 per share**[73](index=73&type=chunk) [Material Related Party Transactions](index=33&type=section&id=%E9%87%8D%E5%A4%A7%E5%85%B3%E8%81%94%E4%BA%A4%E6%98%93) The company engaged in various daily operational related party transactions with its controlling shareholder, China Huadian, and its affiliates, all within annual limits, and announced post-period equity sales - In 2020, the company purchased approximately **RMB 5.158 billion in fuel** and approximately **RMB 5.422 billion in engineering equipment and services** from its controlling shareholder, China Huadian, both within annual limits[81](index=81&type=chunk) - As of the end of 2020, the company and its subsidiaries had outstanding borrowings of approximately **RMB 15.422 billion from China Huadian**; the highest daily average deposit balance with Huadian Finance was approximately **RMB 8.901 billion**, both within agreement limits[82](index=82&type=chunk)[83](index=83&type=chunk) - Post-reporting period, on February 26, 2021, the company announced the sale of a **65% equity stake in Ningxia Lingwu** and a **53% equity stake in Ningxia Heating** to China Huadian for a total consideration of approximately **RMB 4.072 billion**[86](index=86&type=chunk) [Social Responsibility](index=40&type=section&id=%E7%A7%AF%E6%9E%81%E5%B1%A5%E8%A1%8C%E7%A4%BE%E4%BC%9A%E8%B4%A3%E4%BB%BB%E7%9A%84%E5%B7%A5%E4%BD%9C%E6%83%85%E5%86%B5) The company actively fulfilled social responsibilities, investing RMB 8.518 million in poverty alleviation and achieving ultra-low emissions for most coal-fired units, despite incurring environmental fines totaling RMB 595,000 - In 2020, the company directly invested **RMB 8.518 million in poverty alleviation efforts**, helping **1,245 individuals escape poverty**[94](index=94&type=chunk)[97](index=97&type=chunk) - Most of the company's coal-fired generating units have achieved **ultra-low emissions**[102](index=102&type=chunk) - During the reporting period, the company was fined a total of **RMB 595,000** for environmental matters, including unorganized emissions[103](index=103&type=chunk) Share Changes and Shareholder Information [Shareholders and Actual Controller Information](index=45&type=section&id=%E8%82%A1%E4%B8%9C%E5%92%8C%E5%AE%9E%E9%99%85%E6%8E%A7%E5%88%B6%E4%BA%BA%E6%83%85%E5%86%B5) As of 2020 year-end, the company had 122,950 ordinary shareholders, with China Huadian Group Co., Ltd. as the controlling shareholder holding 46.84% of shares Top Shareholders | Shareholder Name | Shares Held at Period End (shares) | Proportion (%) | | :--- | :--- | :--- | | China Huadian Group Co., Ltd. | 4,620,061,224 | 46.84 | | HKSCC Nominees Limited | 1,802,636,924 | 17.35 | | Shandong Development Investment Holding Group Co., Ltd. | 757,226,729 | 7.68 | | China Securities Finance Corporation Limited | 397,071,140 | 4.03 | - The company's controlling shareholder is **China Huadian Group Co., Ltd.**, holding **46.84% of the company's shares**[116](index=116&type=chunk)[451](index=451&type=chunk) Directors, Supervisors, Senior Management, and Employees [Changes in Holdings and Remuneration of Directors, Supervisors, and Senior Management](index=50&type=section&id=%E6%8C%81%E8%82%A1%E5%8F%98%E5%8A%A8%E6%83%85%E5%86%B5%E5%8F%8A%E6%8A%A5%E9%85%AC%E6%83%85%E5%86%B5) The company experienced frequent changes in key management positions, with minimal shareholdings among directors, supervisors, and senior management, whose total pre-tax remuneration was RMB 6.2926 million - During the reporting period, Mr. Wang Xuxiang was replaced by **Mr. Ding Huande as Chairman**; **Mr. Luo Xiaoqian was appointed as the company's General Manager**[122](index=122&type=chunk)[133](index=133&type=chunk) - As of the end of the reporting period, the total pre-tax remuneration actually received by all directors, supervisors, and senior management receiving compensation from the company was **RMB 6.2926 million**[123](index=123&type=chunk)[132](index=132&type=chunk) [Employee Information](index=61&type=section&id=%E5%91%98%E5%B7%A5%E6%83%85%E5%86%B5) As of the reporting period end, the company and its main subsidiaries employed 27,116 individuals, with production personnel forming the largest group and approximately 49% of employees holding bachelor's degrees or higher Employee Professional Composition | Professional Composition | Number of Employees | | :--- | :--- | | Management Personnel | 6,469 | | Professional and Technical Personnel | 2,189 | | Production Personnel | 17,512 | | **Total** | **27,116** | Corporate Governance [Overview of Corporate Governance](index=62&type=section&id=%E5%85%AC%E5%8F%B8%E6%B2%BB%E7%90%86%E7%9B%B8%E5%85%B3%E6%83%85%E5%86%B5%E8%AF%B4%E6%98%8E) The company maintains strict adherence to corporate governance regulations, ensuring independent operation from its controlling shareholder through "five separations," and held regular board, supervisory, and general meetings - During the reporting period, the company held **2 general meetings, 11 board meetings, and 6 supervisory board meetings**[141](index=141&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk) - The company maintains **"five separations"** (personnel, assets, finance, institutions, and business) from its controlling shareholder, ensuring independent operation[142](index=142&type=chunk) [Internal Control](index=65&type=section&id=%E5%86%85%E9%83%A8%E6%8E%A7%E5%88%B6%E8%87%AA%E6%88%91%E8%AF%84%E4%BB%B7%E6%8A%A5%E5%91%8A) The board deemed internal controls effective as of December 31, 2020, with no significant deficiencies, and Lixin Certified Public Accountants issued an unqualified audit report on financial reporting internal controls - The company disclosed its internal control self-evaluation report, concluding that internal controls were **effective as of December 31, 2020**, with **no significant deficiencies** found[156](index=156&type=chunk)[157](index=157&type=chunk) - Lixin Certified Public Accountants issued a **standard unqualified audit report** on the company's internal controls[158](index=158&type=chunk) Corporate Bonds Information [Overview of Corporate Bonds](index=67&type=section&id=%E5%85%AC%E5%8F%B8%E5%80%BA%E5%88%B8%E5%9F%BA%E6%9C%AC%E6%83%85%E5%86%B5) As of the reporting period end, the company had multiple outstanding perpetual or ordinary corporate bonds traded on the Shanghai Stock Exchange, all with timely interest payments Corporate Bonds Overview | Bond Abbreviation | Code | Bond Balance (RMB 100 million) | Interest Rate (%) | Maturity Date | | :--- | :--- | :--- | :--- | :--- | | 18 Huadian Y1 | 143992.SH | 15.00 | 5.00 | 2021-07-17 | | 18 Huadian Y2 | 143993.SH | 15.00 | 5.20 | 2023-07-17 | | 18 Huadian Y3 | 143963.SH | 11.50 | 4.87 | 2021-08-15 | | 18 Huadian Y4 | 143965.SH | 8.50 | 5.05 | 2023-08-15 | | 19HDGJ01 | 155747.SH | 20.00 | 3.58 | 2022-10-17 | [Credit Rating and Bank Credit Lines](index=69&type=section&id=%E5%85%AC%E5%8F%B8%E5%80%BA%E5%88%B8%E8%AF%84%E7%BA%A7%E5%8F%8A%E9%93%B6%E8%A1%8C%E6%8E%88%E4%BF%A1%E6%83%85%E5%86%B5) The company holds an AAA credit rating with a stable outlook and has secured total bank credit lines of RMB 249.8 billion, with RMB 143.6 billion remaining unused - The company's corporate credit rating is **AAA**, with a **stable outlook**[165](index=165&type=chunk) - As of the end of the reporting period, the company had obtained total bank credit lines of **RMB 249.8 billion**, of which **RMB 143.6 billion remained unused**[173](index=173&type=chunk) Financial Report [Audit Report](index=72&type=section&id=%E5%AE%A1%E8%AE%A1%E6%8A%A5%E5%91%8A) Lixin Certified Public Accountants issued a standard unqualified audit report for the 2020 financial statements, with "impairment of non-current assets" identified as a key audit matter due to significant management judgment - Lixin Certified Public Accountants issued a **standard unqualified audit report**[176](index=176&type=chunk) - A key audit matter was **"impairment of non-current assets"**, primarily involving impairment tests for fixed assets, construction in progress, intangible assets, and goodwill, which require significant management judgment[177](index=177&type=chunk)[178](index=178&type=chunk) [Consolidated Financial Statements](index=75&type=section&id=%E5%90%88%E5%B9%B6%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) As of 2020 year-end, total assets were RMB 234.611 billion, total liabilities RMB 141.646 billion, and equity attributable to parent company shareholders RMB 72.089 billion, with operating revenue of RMB 90.744 billion and net profit of RMB 4.179 billion Key Consolidated Income Statement Items | Consolidated Income Statement Items (RMB thousand) | 2020 | 2019 | | :--- | :--- | :--- | | Total Operating Revenue | 90,744,016 | 93,654,431 | | Total Operating Costs | 83,401,784 | 88,510,062 | | Total Profit | 7,044,050 | 5,536,575 | | Net Profit | 5,776,735 | 4,438,544 | | Net Profit Attributable to Parent Company Shareholders | 4,179,447 | 3,406,920 | Key Consolidated Cash Flow Statement Items | Consolidated Cash Flow Statement Items (RMB thousand) | 2020 | 2019 | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 25,248,152 | 21,376,881 | | Net Cash Flow from Investing Activities | -18,050,882 | -14,785,966 | | Net Cash Flow from Financing Activities | -7,164,373 | -6,826,773 | [Notes to Financial Statements](index=85&type=section&id=%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8%E9%99%84%E6%B3%A8) The notes detail significant accounting policies and estimates, including revenue recognition, long-term asset impairment, and financial instruments, along with disclosures on segment information and post-balance sheet events - The company's revenue recognition policy states that **electricity revenue is recognized when electricity is supplied to grid companies**; **heat revenue is recognized when heat is supplied to customers**; and **coal sales revenue is recognized when control of the goods is transferred to the buyer**[264](index=264&type=chunk) - Important accounting estimates and judgments include **impairment of long-term assets**, **allowance for expected credit losses on accounts receivable**, **depreciation and amortization of fixed assets and intangible assets**, and **recognition of deferred income tax assets**[283](index=283&type=chunk) - In February 2021, the company signed an agreement with China Huadian to sell equity stakes in Lingwu Power Generation and Ningxia Heating for a total consideration of approximately **RMB 4.073 billion**[475](index=475&type=chunk) - In March 2021, the company proposed to issue shares and convertible bonds to acquire minority equity stakes in Fuyuan Thermal Power and Mengdong Energy, aiming for **full ownership**[475](index=475&type=chunk)

Financial Performance - The group achieved a revenue of approximately RMB 40.943 billion, a decrease of about 5.36% compared to the same period in 2019[4]. - The profit attributable to equity holders of the company for the period was approximately RMB 2.411 billion, with basic earnings per share of RMB 0.200[4]. - The company's revenue for the period was approximately RMB 40.943 billion, a decrease of about 5.36% year-on-year, primarily due to reduced electricity sales revenue[27]. - The group’s revenue for the six months ended June 30, 2020, was RMB 40,942,846 thousand, a decrease of 5.9% compared to RMB 43,263,433 thousand for the same period in 2019[64]. - Operating profit for the same period was RMB 5,182,313 thousand, an increase of 20.6% from RMB 4,297,375 thousand in the previous year[64]. - The group reported a net profit of RMB 3,162,238 thousand for the six months ended June 30, 2020, compared to RMB 2,100,553 thousand for the same period in 2019, representing a growth of 50.6%[64]. - The company's profit attributable to equity holders for the six months ended June 30, 2020, was RMB 1,974,721 thousand, an increase of 39.4% compared to RMB 1,416,521 thousand for the same period in 2019[99]. - Basic earnings per share for the six months ended June 30, 2020, was RMB 0.200, up from RMB 0.144 in the same period of 2019, representing an increase of 38.9%[99]. Installed Capacity and Operations - The company has a total installed capacity of 56,953.3 MW across 62 operating power plants, with coal-fired capacity at 43,235 MW and gas-fired capacity at 6,878.1 MW[5]. - The company has significant renewable energy capacity totaling 6,840.2 MW, including hydro, wind, and solar power[5]. - The company has a total installed capacity of 6,944.4 MW in Hubei province, with an ownership interest of 82.56%[37]. - The company has a total of 1,481.5 MW installed capacity in Ningxia with a 63.92% ownership in Ningxia New Energy Co., Ltd.[18]. - The company has ongoing construction projects with a planned capacity of 1,716.5 MW for wind power generation[24]. - The company has a diverse portfolio of power plants, including major facilities like Zouxian Power Plant (2,575 MW) and Shiliquan Power Plant (2,120 MW)[6]. Strategic Focus and Development - The group is committed to expanding its renewable energy projects as part of its long-term strategy[5]. - The company continues to evaluate potential mergers and acquisitions to enhance its market position and operational efficiency[5]. - The company is focused on expanding its renewable energy capacity, with several projects in hydropower and wind energy development underway[17]. - The company plans to continue expanding its market presence and investing in new technologies to enhance operational efficiency and service delivery[77]. - The company is focused on strategic mergers and acquisitions to bolster its market position and drive future growth[77]. - The company has allocated resources towards research and development of new products and technologies to meet evolving market demands[77]. Financial Position and Cash Flow - As of June 30, 2020, the total borrowings of the group amounted to approximately RMB 93.114 billion, with a debt-to-asset ratio of approximately 61.14%, a decrease of 4 percentage points from the end of 2019[36]. - The group had cash and cash equivalents of approximately RMB 6.044 billion as of June 30, 2020[36]. - The net cash generated from operating activities for the six months ended June 30, 2020, was RMB 8,770,496 thousand, up from RMB 6,276,958 thousand in the prior year, indicating a growth of about 39.8%[76]. - The company incurred a net cash outflow from investing activities of RMB (6,191,443) thousand for the six months ended June 30, 2020, compared to RMB (4,138,890) thousand in the same period of 2019, reflecting an increase in investment activities[76]. - The net cash generated from financing activities was RMB (3,000,565) thousand for the six months ended June 30, 2020, compared to RMB 426,865 thousand in the same period of 2019[134]. Environmental and Regulatory Compliance - The revised Solid Waste Pollution Prevention and Control Law will take effect in September 2020, increasing the company's environmental protection responsibilities and potential expenditures[41]. - The company will strengthen its environmental protection measures and ensure compliance with national pollution prevention policies[41]. - The company has complied with the environmental, social, and governance requirements set by the Hong Kong Listing Rules during the first half of 2020[60]. Shareholder and Governance Matters - The board of directors proposed not to distribute an interim dividend for the period[5]. - The company did not purchase, sell, or redeem any of its issued securities during the reporting period[55]. - The board of directors and supervisory board underwent a restructuring, with new appointments made effective June 30, 2020[43]. - The company has adopted a code of conduct for securities transactions by its directors, ensuring compliance with required standards[54]. Related Party Transactions - The company has significant related party transactions with its parent company and subsidiaries, including China Huadian Group[137]. - Sales of electricity to subsidiaries amounted to RMB 12,217,000 for the six months ended June 30, 2020, down 35.4% from RMB 18,973,000 in the same period of 2019[145]. - Purchases of electricity from a subsidiary totaled RMB 1,650,000, a decrease of 56.5% compared to RMB 3,796,000 in the prior year[145].

[Definitions](index=4&type=section&id=Section%201%20Definitions) This section defines key technical terms used in the report, providing a foundation for understanding its content - This section defines key technical terms used in the report, including **power supply coal consumption**, **utilization hours**, **power generation**, **controlling installed capacity**, and **plant power consumption rate**, providing a basis for understanding the report's content[7](index=7&type=chunk)[404](index=404&type=chunk) [Company Profile and Key Financial Indicators](index=5&type=section&id=Section%202%20Company%20Profile%20and%20Key%20Financial%20Indicators) This section presents the company's basic information, key financial performance, accounting standard differences, and non-recurring profit and loss items [Company Information](index=5&type=section&id=I.%20Company%20Information) This section provides the company's basic details, including names, legal representative, contact information, and stock listing information Company Basic Information | Item | Information | | :--- | :--- | | Chinese Name | 华电国际电力股份有限公司 | | Chinese Short Name | 华电国际 | | English Name | HUADIAN POWER INTERNATIONAL CORPORATION LIMITED | | Legal Representative | Mr. Wang Xuxiang | | A-Share Listing Exchange | Shanghai Stock Exchange | | A-Share Stock Ticker/Code | 华电国际 / 600027 | | H-Share Listing Exchange | Hong Kong Stock Exchange | | H-Share Stock Ticker/Code | 华电国际电力股份 / 01071 | [Key Accounting Data and Financial Indicators](index=6&type=section&id=VII.%20Key%20Accounting%20Data%20and%20Financial%20Indicators) In H1 2020, net profit attributable to shareholders grew significantly despite a decline in operating revenue Key Accounting Data for H1 2020 (Unit: RMB thousand) | Key Accounting Data | Current Period | Prior Year Period (Adjusted) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 41,531,486 | 44,140,958 | -5.91 | | Net Profit Attributable to Shareholders | 2,385,988 | 1,662,874 | 43.49 | | Net Profit Attributable to Shareholders (Excluding Non-recurring Items) | 2,126,905 | 1,600,528 | 32.89 | | Net Cash Flow from Operating Activities | 11,548,801 | 9,368,247 | 23.28 | Key Financial Indicators for H1 2020 | Key Financial Indicators | Current Period (Jan-Jun) | Prior Year Period (Adjusted) | Change | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (RMB/share) | 0.198 | 0.146 | Increased by 35.62% | | Basic EPS Excluding Non-recurring Items (RMB/share) | 0.171 | 0.140 | Increased by 22.14% | | Weighted Average Return on Equity (%) | 4.19 | 3.26 | Increased by 0.93 percentage points | | Weighted Average ROE Excluding Non-recurring Items (%) | 3.64 | 3.16 | Increased by 0.48 percentage points | [Accounting Data Differences under Domestic and International Standards](index=6&type=section&id=VIII.%20Accounting%20Data%20Differences%20under%20Domestic%20and%20International%20Standards) This section outlines the differences in net profit and net assets under PRC and International accounting standards H1 2020 Net Profit and Period-end Net Assets Standards Reconciliation (Unit: RMB thousand) | Item | Net Profit (Current Period) | Net Assets (Period-end) | | :--- | :--- | :--- | | **As per PRC Accounting Standards** | **2,385,988** | **67,106,078** | | Business combinations under common control | -121,142 | 2,191,052 | | Government grants | 16,796 | -303,597 | | Maintenance fees, safety production fees | 54,819 | 39,301 | | Separation of "three supplies, one property" | -618 | - | | Tax impact of adjustments | 30,314 | -447,206 | | Attributable to minority interests | 45,278 | -416,163 | | **As per International Accounting Standards** | **2,411,435** | **68,169,465** | - Key differences between domestic and international accounting standards explained: - **Business Combination**: International standards require measurement at fair value, while PRC standards use book value for combinations under common control[20](index=20&type=chunk)[21](index=21&type=chunk) - **Government Grants**: Under IFRS, some grants are recognized as deferred income, while under PRC GAAP, some are credited to capital reserve[20](index=20&type=chunk)[21](index=21&type=chunk) - **Maintenance/Safety Fees**: Under IFRS, these are treated as profit distribution upon provision, while under PRC GAAP, they are expensed in the current period[20](index=20&type=chunk)[21](index=21&type=chunk) - **"Three Supplies, One Property" Separation**: Under IFRS, transferred assets are recognized in current profit/loss, while under PRC GAAP, related losses are offset against equity[20](index=20&type=chunk)[21](index=21&type=chunk) [Non-recurring Profit and Loss Items](index=8&type=section&id=IX.%20Non-recurring%20Profit%20and%20Loss%20Items) The company's non-recurring profit and loss totaled RMB 259 million, mainly from government grants and asset disposals Non-recurring Profit and Loss Items for H1 2020 (Unit: RMB thousand) | Non-recurring P&L Item | Amount | | :--- | :--- | | Gain/Loss on disposal of non-current assets | 25,405 | | Government grants recognized in current profit or loss | 98,681 | | Reversal of impairment provision for individually tested receivables and contract assets | 7,108 | | Gains from entrusted loans | 7,597 | | Other non-operating income and expenses | 161,789 | | Minority interest impact | -16,163 | | Income tax impact | -25,334 | | **Total** | **259,083** | [Company Business Overview](index=9&type=section&id=Section%203%20Company%20Business%20Overview) This section details the company's primary business operations, operating model, industry context, and core competitive strengths [Main Business, Operating Model, and Industry Overview](index=9&type=section&id=I.%20Report%20Period%20Main%20Business%2C%20Operating%20Model%2C%20and%20Industry%20Overview) The company is a large integrated energy firm in China, primarily engaged in constructing and operating power plants - The company's main business is selling electricity and heat products in the regions where its power assets are located, accounting for approximately **87% of its main business revenue**[24](index=24&type=chunk) Controlling Installed Capacity Structure (as of the reporting date) | Energy Type | Controlling Installed Capacity (million kW) | Percentage | | :--- | :--- | :--- | | Coal-fired Power | 43.235 | 76% | | Gas-fired Power | 6.8781 | 12% | | Renewable Energy (Hydro, Wind, Solar) | 6.8402 | 12% | | **Total** | **56.9533** | **100%** | [Core Competency Analysis](index=9&type=section&id=III.%20Core%20Competency%20Analysis%20during%20the%20Reporting%20Period) The company's core competitiveness lies in its scale, advanced equipment, management experience, and strong governance - The company's core competencies include: - **Scale Advantage**: One of the largest listed power generation companies in China by installed capacity, with assets across 14 provinces and a relatively complete industrial chain[25](index=25&type=chunk) - **Advanced Equipment**: Over **90% of its thermal power units are large-capacity, high-efficiency, and environmentally friendly units of 300 MW or above**, with units of 600 MW and above accounting for about 60%, far exceeding the national average[26](index=26&type=chunk) - **Management Experience**: Possesses an experienced management and technical team with extensive experience in power plant construction and operation[27](index=27&type=chunk) - **Corporate Governance**: As a dually-listed company, it has established a standardized internal management and control system, enjoying a good market reputation and strong financing capabilities[27](index=27&type=chunk) [Discussion and Analysis of Operations](index=11&type=section&id=Section%204%20Discussion%20and%20Analysis%20of%20Operations) This section reviews operational performance, business segments, asset and liability status, investments, and key risks [Overall Analysis of Operations](index=11&type=section&id=I.%20Discussion%20and%20Analysis%20of%20Operations) In H1 2020, net profit grew 43.49% to RMB 2.386 billion despite lower power generation and revenue, driven by reduced fuel costs H1 2020 Operating Performance Overview | Indicator | H1 2020 | YoY Change | | :--- | :--- | :--- | | Cumulative Power Generation | 92.976 billion kWh | -8.66% | | On-grid Power Generation | 87.062 billion kWh | -8.53% | | Total Operating Revenue | RMB 41.531 billion | -5.91% | | Operating Costs | RMB 34.570 billion | -9.45% | | Net Profit Attributable to Parent | RMB 2.386 billion | +43.49% | | Basic EPS | RMB 0.198 | +35.62% | - The decrease in power generation was mainly due to the impact of the COVID-19 pandemic and increased external power purchases in the Shandong region[28](index=28&type=chunk) - The company's **power supply coal consumption was 288.52 g/kWh**, significantly lower than the national average, reflecting high operational efficiency[28](index=28&type=chunk) [Company's Controlling Installed Capacity](index=12&type=section&id=I.%20Company's%20Controlling%20Installed%20Capacity) The company's installed capacity is diversified, with a clear trend towards clean energy in its new and under-construction projects Newly Added Installed Capacity in H1 2020 (MW) | Project | Unit Type | Capacity (MW) | | :--- | :--- | :--- | | Shijiazhuang Heating Group | Gas-fired Power | 4 | | Shuoluohe Company | Hydropower | 124 | | Longkou Dongyi Wind Power Co. | Wind Power | 50 | | Shandong New Energy Co. | Wind Power | 40 | | Ningxia New Energy Co. | Wind Power | 100 | | Ningxia New Energy Co. | Solar Power | 70 | | **Total** | **-** | **388** | Major Units Under Construction (MW) | Unit Type | Planned Installed Capacity (MW) | | :--- | :--- | | Coal-fired Power Units | 510 | | Gas-fired Power Units | 1,629 | | Hydropower Units | 168 | | Wind Power Units | 1,716.5 | | Photovoltaic Power Units | 11.3 | | **Total** | **4,034.8** | [Analysis of Main Business](index=17&type=section&id=(I)%20Analysis%20of%20Main%20Business) In H1 2020, operating revenue fell due to lower power generation, but operating profit grew 42.21% as cost reductions outpaced the revenue decline Analysis of Financial Statement Item Changes in H1 2020 (Unit: RMB thousand) | Account | Current Period | Prior Year Period (Restated) | Change (%) | Main Reason | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 41,531,486 | 44,140,958 | -5.91 | Decrease in power generation | | Operating Costs | 34,570,239 | 38,179,877 | -9.45 | Decrease in power generation and coal prices | | Finance Costs | 2,379,309 | 2,623,631 | -9.31 | Reduced interest-bearing debt and financing costs | | Net Cash Flow from Operating Activities | 11,548,801 | 9,368,247 | 23.28 | Increased company profitability | [Analysis of Assets and Liabilities](index=19&type=section&id=(III)%20Analysis%20of%20Assets%20and%20Liabilities) As of June 30, 2020, the company's balance sheet saw significant changes in working capital accounts and debt structure Major Changes in Balance Sheet Items (Unit: RMB thousand) | Item Name | End of Current Period | End of Prior Year Period | Change (%) | Main Reason | | :--- | :--- | :--- | :--- | :--- | | Notes Receivable | 3,201,669 | 1,645,555 | 94.56 | Increased scale of electricity bill settlement via notes | | Contract Liabilities | 493,243 | 1,757,069 | -71.93 | End of heating season, reduced prepaid heating fees | | Employee Benefits Payable | 580,481 | 236,568 | 145.38 | Impact of employee compensation payment schedule | | Non-current Liabilities Due within One Year | 8,621,349 | 13,286,633 | -35.11 | Repayment of medium-term notes and long-term loans | | Other Current Liabilities | 316,107 | 3,573,409 | -91.15 | Repayment of super short-term financing bills | - As of June 30, 2020, certain subsidiaries pledged electricity and heating fee collection rights of approximately **RMB 17.589 billion** and mortgaged power generation units, equipment, land use rights, and mining rights of approximately **RMB 4.162 billion** to secure loans[44](index=44&type=chunk) [Analysis of Investment Status](index=20&type=section&id=(IV)%20Analysis%20of%20Investment%20Status) As of June 30, 2020, the company's long-term equity investment was RMB 11.831 billion, a slight increase from the beginning of the year Significant Changes in Equity Investments (Unit: RMB thousand) | Company Name | Business Scope | Shareholding (%) | Change in Amount | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Huadian Coal Industry Group Co., Ltd. | Coal industry development and supply | 12.98 | 108,276 | 6.64 | | Otog Front Banner Great Wall Coal Mine Co., Ltd. | Sales of coal mining machinery and accessories | 35 | 47,652 | 6.27 | | Guodian Inner Mongolia Dongsheng Thermal Power Co., Ltd. | Power generation, sales, and heating | 20 | 22,031 | 14.12 | | China Huadian Finance Co., Ltd. | Financial services | 16.46 | -54,267 | -4.02 | | Xibaipo Second Power Generation Co., Ltd. | Power generation and sales | 35 | -44,073 | -8.45 | [Analysis of Major Subsidiaries and Investees](index=21&type=section&id=(VI)%20Analysis%20of%20Major%20Subsidiaries%20and%20Investees) Huadian Hubei Power Generation Co., Ltd. was the main subsidiary contributing over 10% to the company's net profit Key Financial Data of Huadian Hubei Power Generation Co., Ltd. (Unit: RMB thousand) | Indicator | Amount | | :--- | :--- | | Total Assets (2020-06-30) | 18,614,493 | | Net Assets (2020-06-30) | 8,370,329 | | Operating Revenue (H1 2020) | 4,577,485 | | Net Profit (H1 2020) | 537,764 | [Potential Risks](index=21&type=section&id=(II)%20Potential%20Risks) The company faces three main risks: electricity market risk, coal market risk, and environmental risk - Key risks and mitigation strategies: - **Electricity Market Risk**: Uncertain power demand due to COVID-19 and trade protectionism, along with pressure from external power purchases and market competition, may impact generation volume and tariffs; the company will enhance marketing and adopt differentiated strategies[51](index=51&type=chunk) - **Coal Market Risk**: Capacity adjustments in major production areas and cross-regional transportation create uncertainty in coal supply and prices; the company will strengthen market analysis and optimize procurement and inventory control[51](index=51&type=chunk) - **Environmental Risk**: Stricter environmental regulations may increase compliance expenditures; the company will rigorously implement environmental policies and enhance facility maintenance to ensure compliance[51](index=51&type=chunk) [Important Matters](index=23&type=section&id=Section%205%20Important%20Matters) This section covers profit distribution, commitment fulfillment, related-party transactions, contracts, and social responsibility initiatives [Profit Distribution Plan](index=23&type=section&id=II.%20Profit%20Distribution%20or%20Capital%20Reserve%20Capitalization%20Plan) The company has no profit distribution or capitalization of capital reserve plan for the first half of 2020 - The Board of Directors has resolved that there will be no profit distribution plan or capitalization of capital reserve for the first half of 2020[4](index=4&type=chunk)[55](index=55&type=chunk) [Fulfillment of Commitments](index=23&type=section&id=III.%20Fulfillment%20of%20Commitments) The company and its controlling shareholder, China Huadian Corporation, have strictly fulfilled all commitments during the reporting period - The controlling shareholder, China Huadian, has committed to injecting its non-listed conventional energy generation assets into the company within three years after they meet the injection criteria to resolve inter-industry competition, and this commitment is in progress[57](index=57&type=chunk) - China Huadian committed not to sell the 1.15 billion A-shares subscribed in the non-public offering on July 18, 2014, for 72 months (until July 18, 2020), and this commitment was strictly fulfilled during the reporting period[57](index=57&type=chunk)[96](index=96&type=chunk) [Significant Related-Party Transactions](index=26&type=section&id=X.%20Significant%20Related-Party%20Transactions) The company engaged in significant related-party transactions, primarily involving fuel and equipment procurement, engineering, and financial services - The company has ongoing daily related-party transactions with its controlling shareholder, China Huadian, and its affiliates in areas such as fuel procurement, engineering services, and financial services, with all transaction amounts within the annual caps[62](index=62&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk) Related-Party Borrowings (Unit: RMB thousand) | Related Party | Relationship | Opening Balance | Current Period Amount | Closing Balance | | :--- | :--- | :--- | :--- | :--- | | China Huadian | Controlling Shareholder | 2,570,000 | 3,830,000 | 6,400,000 | | Huadian Finance | Subsidiary of Parent Company | 8,513,060 | -478,033 | 8,035,027 | | **Total** | | **11,083,060** | **3,351,967** | **14,435,027** | [Major Contracts and Guarantees](index=28&type=section&id=XI.%20Major%20Contracts%20and%20Their%20Performance) The company had no major custody, contracting, or leasing matters, while its guarantee exposure remains low and controllable Total Guarantees (Unit: RMB thousand) | Item | Amount | | :--- | :--- | | Total year-end guarantee balance for subsidiaries (B) | 81,625 | | Total year-end external guarantee balance (A) | 43,575 | | **Total Guarantees (A+B)** | **125,200** | | Total Guarantees as a percentage of Net Assets (%) | 0.14 | [Poverty Alleviation Work](index=30&type=section&id=XII.%20Listed%20Company's%20Poverty%20Alleviation%20Work) In H1 2020, the company actively fulfilled its social responsibilities by investing in targeted poverty alleviation efforts Targeted Poverty Alleviation Achievements in H1 2020 | Indicator | Amount and Progress | | :--- | :--- | | Funds Invested | RMB 4.9738 million | | Value of Materials Donated | RMB 64,500 | | Number of Registered Poor People Lifted out of Poverty | 1,443 people | | Number of Industrial Poverty Alleviation Projects | 8 | | Investment in Industrial Poverty Alleviation Projects | RMB 2.8993 million | [Environmental Information](index=32&type=section&id=XIV.%20Environmental%20Information) The company prioritizes environmental protection, with most coal-fired units achieving ultra-low emissions through continuous investment - The company continues to increase investment in environmental protection facilities for its coal-fired power plants, with the vast majority of units achieving ultra-low emissions and ensuring the normal operation of these facilities[82](index=82&type=chunk)[84](index=84&type=chunk) - As of the reporting date, the company was fined a total of **RMB 595,000** for environmental issues (fugitive emissions and others)[82](index=82&type=chunk)[83](index=83&type=chunk) [Share Capital Changes and Shareholder Information](index=34&type=section&id=Section%206%20Ordinary%20Share%20Capital%20Changes%20and%20Shareholder%20Information) This section provides details on the company's shareholder structure as of the end of the reporting period [Shareholder Information](index=34&type=section&id=II.%20Shareholder%20Information) As of the period-end, the company had 114,783 ordinary shareholders, with China Huadian Corporation as the largest shareholder Top Ten Shareholders at the End of the Reporting Period | Shareholder Name | Number of Shares Held | Percentage (%) | | :--- | :--- | :--- | | China Huadian Corporation Limited | 4,620,061,224 | 46.84 | | HKSCC Nominees Limited | 1,794,747,811 | 18.20 | | Shandong Development & Investment Holding Group Co., Ltd. | 800,766,729 | 8.12 | | China Securities Finance Corporation Limited | 397,071,140 | 4.03 | | Shenergy Company Limited | 142,800,000 | 1.45 | | China National Arts & Crafts Group Corporation Ltd. | 91,000,000 | 0.92 | | Central Huijin Asset Management Ltd. | 77,978,400 | 0.79 | | Shanghai Electric Group Company Limited | 75,000,005 | 0.76 | | National Social Security Fund Portfolio 103 | 65,990,592 | 0.67 | | Caitong Fund - Bank of Ningbo - Cinda Guocui Equity Investment Fund | 43,780,292 | 0.44 | [Information on Preferred Shares](index=37&type=section&id=Section%207%20Information%20on%20Preferred%20Shares) The company had no preferred shares during the reporting period - During the reporting period, the company had no preferred shares[98](index=98&type=chunk) [Directors, Supervisors, and Senior Management](index=38&type=section&id=Section%208%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) This section details the changes in the company's board of directors, supervisory committee, and senior management during the period [Changes in Directors, Supervisors, and Senior Management](index=38&type=section&id=II.%20Changes%20in%20Company%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) The company's board, supervisory committee, and senior management underwent significant personnel changes during the reporting period Key Changes in Directors, Supervisors, and Senior Management | Name | Position | Change | | :--- | :--- | :--- | | Luo Xiaoqian | Director, General Manager | Elected, Appointed | | Peng Xingyu | Director | Elected | | Hao Bin | Director | Elected | | Feng Rong | Director | Elected | | Tian Hongbao | Former Vice Chairman, Director, General Manager | Resigned | | Chen Haibin | Former Director | Resigned | | Tao Yunpeng | Former Director | Resigned | [Information on Corporate Bonds](index=39&type=section&id=Section%209%20Information%20on%20Corporate%20Bonds) This section provides an overview of the company's outstanding corporate bonds, use of proceeds, credit ratings, and debt service capabilities [Basic Information on Corporate Bonds](index=39&type=section&id=I.%20Basic%20Information%20on%20Corporate%20Bonds) As of the period-end, the company had several series of corporate bonds outstanding with a total balance of RMB 7 billion Overview of Outstanding Corporate Bonds | Bond Ticker | Code | Maturity Date | Bond Balance (RMB billion) | Interest Rate (%) | | :--- | :--- | :--- | :--- | :--- | | 18 Huadian Y1 | 143992.SH | 2021-07-17 | 1.50 | 5.00 | | 18 Huadian Y2 | 143993.SH | 2023-07-17 | 1.50 | 5.20 | | 18 Huadian Y3 | 143963.SH | 2021-08-15 | 1.15 | 4.87 | | 18 Huadian Y4 | 143965.SH | 2023-08-15 | 0.85 | 5.05 | | 19HDGJ01 | 155747.SH | 2022-10-17 | 2.00 | 3.58 | [Use of Proceeds from Bond Issuance](index=41&type=section&id=III.%20Use%20of%20Proceeds%20from%20Corporate%20Bond%20Issuance) The proceeds from all issued corporate bonds have been fully used as disclosed in the respective offering circulars - The proceeds from each bond issuance have been fully utilized for their disclosed purposes (repayment of company debt and supplementing working capital) after deducting issuance costs[107](index=107&type=chunk) [Corporate Bond Credit Ratings](index=41&type=section&id=IV.%20Corporate%20Bond%20Credit%20Ratings) The company maintains a AAA corporate credit rating with a stable outlook, and all its issued bonds also carry a AAA rating - The company's corporate credit rating is **AAA** with a stable outlook; all outstanding corporate bonds are also rated **AAA**[108](index=108&type=chunk)[109](index=109&type=chunk) [Financial Indicators Related to Debt Service Ability](index=42&type=section&id=VIII.%20The%20following%20accounting%20data%20and%20financial%20indicators%20as%20of%20the%20end%20of%20the%20reporting%20period%20and%20the%20end%20of%20the%20previous%20year%20(or%20the%20current%20reporting%20period%20and%20the%20same%20period%20of%20the%20previous%20year)) The company's debt service indicators remained robust, with improved liquidity ratios and a stronger interest coverage multiple Key Debt Service Financial Indicators | Key Indicator | End of Current Period / Current Period | End of Prior Year / Prior Year Period | Change | | :--- | :--- | :--- | :--- | | Current Ratio | 0.44 | 0.40 | Increased by 10.00% | | Quick Ratio | 0.39 | 0.35 | Increased by 11.43% | | Asset-Liability Ratio (%) | 61.42 | 65.61 | Decreased by 4.19 percentage points | | EBITDA Interest Coverage Ratio | 4.71 | 3.74 | Increased by 25.94% | [Bank Credit Facilities](index=43&type=section&id=XI.%20Company's%20Bank%20Credit%20Facilities%20during%20the%20Reporting%20Period) The company maintains excellent credit standing and has access to substantial unused credit facilities from major domestic banks - As of the end of the reporting period, the company had total bank credit facilities of **RMB 244.2 billion**, with an unused amount of **RMB 139.4 billion**[116](index=116&type=chunk) [Financial Report](index=44&type=section&id=Section%2010%20Financial%20Report) This section contains the unaudited consolidated financial statements and accompanying notes for the first half of 2020 [Consolidated Financial Statements](index=45&type=section&id=Consolidated%20Financial%20Statements) This section presents the unaudited H1 2020 consolidated financial statements, showing enhanced profitability and an optimized balance sheet Consolidated Income Statement Core Data (Jan-Jun 2020, Unit: RMB thousand) | Item | Current Period Amount | Prior Period Amount (Restated) | | :--- | :--- | :--- | | Total Operating Revenue | 41,531,486 | 44,140,958 | | Total Operating Costs | 38,191,515 | 41,972,440 | | Operating Profit | 3,835,300 | 2,696,929 | | Total Profit | 4,018,352 | 2,720,180 | | Net Profit | 3,182,069 | 2,174,165 | | Net Profit Attributable to Parent Company Shareholders | 2,385,988 | 1,662,874 | Consolidated Balance Sheet Core Data (as of 2020-06-30, Unit: RMB thousand) | Item | Period-end Balance | Beginning-of-Period Balance | | :--- | :--- | :--- | | Total Assets | 227,832,489 | 229,875,595 | | Total Liabilities | 139,940,743 | 150,820,587 | | Total Equity Attributable to Parent Company Shareholders | 67,106,078 | 61,510,437 | | Total Shareholders' Equity | 87,891,746 | 79,055,008 | Consolidated Cash Flow Statement Core Data (Jan-Jun 2020, Unit: RMB thousand) | Item | Current Period Amount | Prior Period Amount (Restated) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 11,548,801 | 9,368,247 | | Net Cash Flow from Investing Activities | -6,191,443 | -4,138,754 | | Net Cash Flow from Financing Activities | -5,778,870 | -2,646,388 | | Net Increase in Cash and Cash Equivalents | -421,512 | 2,583,105 | [Notes to the Financial Statements](index=55&type=section&id=Notes%20to%20the%20Financial%20Statements) The notes provide detailed explanations of accounting policies and key items in the consolidated financial statements - The company adopted several new accounting standards and interpretations issued by the Ministry of Finance starting January 1, 2020, which did not have a material impact on its financial position or operating results[230](index=230&type=chunk)[232](index=232&type=chunk)[233](index=233&type=chunk) - Certain subsidiaries of the company enjoy preferential tax policies, including a **15% preferential tax rate for Western Development** and "three-year exemption, three-year half" income tax benefits for engaging in state-supported public infrastructure projects[236](index=236&type=chunk)[237](index=237&type=chunk)[238](index=238&type=chunk) - The company has extensive related-party transactions with its controlling shareholder, China Huadian, and its subsidiaries, including procurement/sales, provision/receipt of services, related-party leases, guarantees, and fund borrowing, all conducted within pre-agreed framework agreements[356](index=356&type=chunk)[360](index=360&type=chunk)[361](index=361&type=chunk) [Directory of Documents for Inspection](index=139&type=section&id=Section%2011%20Directory%20of%20Documents%20for%20Inspection) This section lists the reference documents available for inspection, including signed financial statements and public filings - This section lists the available reference documents, including financial statements signed and sealed by the responsible persons, originals of all company documents and announcements publicly disclosed during the reporting period, and the interim report announced on the Hong Kong Stock Exchange[397](index=397&type=chunk)