CHINA GAS HOLD(00384)2024-06-24 09:17Revenue and Profit Performance - Revenue for the fiscal year ending March 31, 2024, decreased by 11.5% to HKD 81,410,133 thousand compared to HKD 91,988,445 thousand in the previous year[2] - Gross profit declined by 6.1% to HKD 11,304,123 thousand from HKD 12,034,675 thousand year-over-year[2] - Adjusted net profit attributable to the company's owners decreased by 4.3% to HKD 3,965,514 thousand from HKD 4,144,052 thousand[2] - Annual profit attributable to the company's owners dropped to HKD 3,184,939 thousand from HKD 4,293,484 thousand[5] - Revenue decreased by 11.5% year-on-year to HKD 81,410,133,000[41] - Net profit attributable to shareholders declined by 25.8% to HKD 3,184,939,000[41] - Adjusted net profit (excluding non-operating or one-time factors) decreased by 4.3% to HKD 3,965,514,000[41] - Revenue for the year ended March 31, 2024, was HK91.99 billion in 2023[46] - Net profit attributable to the company's owners was HK4.29 billion in 2023[46] - Adjusted net profit attributable to the company's owners was HK4.14 billion in 2023[46] - Revenue for the fiscal year ending March 31, 2024, was HKD 81,410,133,000, a decrease of 11.5% compared to the previous year's HKD 91,988,445,000[59] - Gross profit for the fiscal year ending March 31, 2024, was HKD 11,304,123,000, a decrease of 6.1% compared to the previous year's HKD 12,034,675,000[59] - Net profit attributable to the company's owners for the fiscal year ending March 31, 2024, was HKD 3,184,939,000, a decrease of 25.8% compared to the previous year's HKD 4,293,484,000[59] - Earnings per share for the fiscal year ending March 31, 2024, was HKD 0.59, a decrease of 25.8% compared to the previous year's HKD 0.80[59] Cash Flow and Financial Position - Operating cash flow increased by 13.1% to HKD 11,340,195 thousand compared to HKD 10,027,284 thousand in the previous year[2] - Free cash flow surged by 70.2% to HKD 4,288,773 thousand from HKD 2,519,991 thousand[2] - Free cash flow reached HKD 4.29 billion during the period[41] - Free cash flow for the fiscal year ending March 31, 2024, was HKD 4,288,773,000, an increase from the previous year's HKD 2,519,991,000[66] - Total assets decreased to HKD 103,450,545 thousand from HKD 105,070,770 thousand year-over-year[6] - Current liabilities increased to HKD 50,382,257 thousand from HKD 51,780,203 thousand[7] - Equity attributable to the company's owners decreased to HKD 53,927,655 thousand from HKD 57,900,584 thousand[7] - Non-current liabilities decreased to HKD 37,568,114 thousand from HKD 40,720,627 thousand[7] - The company's net current liabilities as of March 31, 2024, amounted to HKD 5,135,078,000, with available but unused bank financing of HKD 91,255,455,000[9] - Total assets as of March 31, 2024, were HKD 148,697,724,000, a decrease from the previous year's HKD 157,291,209,000[67] - The group has secured over RMB 70 billion in medium to long-term credit facilities from major banks, with the longest term extending up to 15 years[68] - As of March 31, 2024, the group's total bank and other loans amounted to HKD 59,065,355,000, with short-term trade financing at HKD 2,531,826,000[68] - The group has issued RMB 7.7 billion in corporate bonds and medium-term notes as of March 31, 2024[68] - Contract assets decreased to HKD 10,260,982,000 as of March 31, 2024, from HKD 12,706,697,000 in the previous year[70] - Trade receivables decreased to HKD 5,623,799,000 as of March 31, 2024, from HKD 6,282,627,000 in the previous year[70] - The group's mortgaged property, plant, and equipment, along with investment properties, increased to HKD 8,562,336,000 as of March 31, 2024, from HKD 5,907,983,000 in the previous year[72] - Capital commitments for property, plant, and equipment, construction materials, and properties under development totaled HKD 388,631,000 as of March 31, 2024[73] Segment Performance - Total segment revenue for the year ended March 31, 2024, was HKD 85,090,165,000, with external customer revenue of HKD 81,410,133,000[13] - Segment profit for the year ended March 31, 2024, was HKD 6,711,223,000, with a pre-tax profit of HKD 4,612,445,000[13] - The company's revenue is derived from natural gas sales, gas connections, engineering design and construction, LPG sales, value-added services, and other businesses[11] - The company's operating segments include natural gas sales, gas connections, engineering design and construction, LPG sales, value-added services, other businesses, and Zhongyu Energy[12] - Total segment revenue for the year reached 97,481,630 thousand HKD, with external customer revenue at 91,988,445 thousand HKD[18] - Segment profit amounted to 6,640,987 thousand HKD, with significant contributions from natural gas and gas connection sales[18] - The company recorded a pre-tax profit of 6,038,002 thousand HKD[18] - Total natural gas sales volume reached 41,698.4 million cubic meters, an increase of 6.2% compared to 39,249.1 million cubic meters in 2023[46] - The company added 1,656,570 new residential gas connections, a decrease of 28.0% compared to 2,299,452 in 2023[46] - Cumulative residential gas connections reached 47.05 million, an increase of 3.6% from 45.39 million in 2023[46] - The company's gas pipeline network reached 554,755 kilometers as of March 31, 2024[49] - The company operates 662 pipeline gas projects, 516 CNG/LNG refueling stations, and 119 LPG distribution projects as of March 31, 2024[48] - Residential gas penetration rate in urban gas projects increased to 70.9%, up 2.3 percentage points from 68.6% in 2023[46] - Natural gas sales volume reached 41.7 billion cubic meters, a year-on-year increase of 6.2%[52] - City and township pipeline natural gas sales volume was 23.51 billion cubic meters, up 2.2% year-on-year[52] - Trade and direct supply pipeline natural gas sales volume was 18.19 billion cubic meters, up 12.0% year-on-year[52] - LPG sales volume was 3.996 million tons, a year-on-year decrease of 3.3%[54] - LPG wholesale sales volume was 3.222 million tons, down 5.1% year-on-year[54] - LPG terminal retail sales volume was 774,000 tons, up 5.3% year-on-year[54] - LPG sales revenue totaled HKD 17,980,918,000, a year-on-year decrease of 20.1%[54] - Value-added service revenue reached HKD 3,654,898,000, a year-on-year increase of 5.8%[55] - Value-added service operating profit was HKD 1,582,032,000, up 5.7% year-on-year[55] - Total installed capacity of comprehensive energy services reached 221.6 MWH, with 112.7 MWH completed for commercial and industrial user-side energy storage[57] Dividend and Share Repurchase - The company proposed a final dividend of 0.35 HKD per share for the year ending March 31, 2024, totaling 1,902,451 thousand HKD[27] - Proposed annual dividend per share is 50 HK cents, with a payout ratio of 84.7%[41] - The company declared a final dividend of HKD 0.35 per share, bringing the total dividend for the year to HKD 0.50 per share, consistent with the previous year[35] - The group repurchased 4,762,600 shares at a total cost of HKD 43,911,086 during the fiscal year ending March 31, 2024[79] - The company repurchased a total of 4,762,600 shares in May 2023 at a total cost of HKD 43,723,460, with the highest and lowest prices being HKD 9.31 and HKD 9.01 respectively[80] - All repurchased shares have been canceled to increase net asset value and earnings per share[80] - No shares were purchased, sold, or redeemed by the company or its subsidiaries during the fiscal year ending March 31, 2024, except as disclosed[80] Taxation and Financial Expenses - Corporate income tax for the year was 759,558 thousand HKD, with a deferred tax credit of 432,989 thousand HKD[20] - The company's subsidiaries in China benefited from a preferential tax rate of 15% due to their location in western China and high-tech status[21] - Financial expenses for the year ended March 31, 2024, were HKD 1,139,162,000[13] - Financial expenses for the fiscal year ending March 31, 2024, increased by 14.4% to HKD 2,121,753,000 compared to the previous year's HKD 1,855,358,000[62] - Share of profit from associates for the fiscal year ending March 31, 2024, was HKD 297,253,000, a decrease from the previous year's HKD 344,838,000[63] - Share of profit from joint ventures for the fiscal year ending March 31, 2024, was HKD 398,389,000, compared to a loss of HKD 100,983,000 in the previous year[64] - Income tax expense for the fiscal year ending March 31, 2024, decreased by 17.8% to HKD 759,558,000 compared to the previous year's HKD 923,578,000[65] Impairment and Fair Value Adjustments - The company's investment properties experienced a fair value decrease of HKD 94,639,000 for the year ended March 31, 2024[13] - The company recognized a net impairment loss on trade receivables and contract assets of HKD 685,598,000 for the year ended March 31, 2024[13] - The company's trade receivables and contract assets impairment loss was not allocated to segments for performance evaluation and resource allocation purposes[19] - Trade receivables (net) decreased to HKD 5,623,799K in 2024 from HKD 6,282,627K in 2023, reflecting a reduction in customer contract-related receivables[28] - Credit loss provision for trade receivables increased to HKD 1,060,618K in 2024 from HKD 989,259K in 2023, indicating a higher risk assessment[28] - Trade receivables aged over 365 days increased to HKD 2,647,000K in 2024 from HKD 2,344,254K in 2023, showing a rise in long-outstanding receivables[29] - Receivables from joint ventures decreased significantly to HKD 2,008,153K in 2024 from HKD 3,912,023K in 2023, reflecting reduced trade balances[31] - Receivables from associates decreased to HKD 44,971K in 2024 from HKD 84,671K in 2023, reflecting reduced trade balances with related parties[30] Trade Payables and Credit Terms - Trade payables and bills payable decreased to HKD 12,969,934K in 2024 from HKD 14,647,872K in 2023, indicating improved payment terms or reduced liabilities[33] - The company's credit policy for trade receivables generally ranges from 30 to 180 days, with some major clients granted extended credit terms[28] - Trade payables aged 0 to 90 days decreased to HKD 6,901,648K in 2024 from HKD 9,430,268K in 2023, showing a reduction in short-term liabilities[33] - The company's average credit period for trade purchases and ongoing costs ranges from 90 to 180 days[34] Digital Transformation and Innovation - The company is accelerating data asset construction and utilization, promoting "digital-intelligent" upgrades in its management system[41] - The company will accelerate the implementation of digital transformation to improve operational efficiency and optimize decision-making processes, leveraging big data and cloud computing to enhance data analysis capabilities and resource allocation[43] - The company has established a smart gas supervision platform, enabling a shift from passive response to active protection and from static isolated supervision to dynamic continuous prevention in gas safety management[44] - The company has implemented digital twin technology in the Hangzhou Asian Games Village, achieving visual operation and maintenance of underground pipe corridors and promoting government-enterprise collaborative operations[45] - The company has improved its gas industry safety digital management platform, enabling multi-dimensional and integrated safety production management through data linkage across various levels[44] Strategic Development and Business Model Innovation - The company is focusing on high-quality and sustainable development, with strict control over capital expenditures and cash flow management[41] - The company will focus on upgrading key infrastructure, such as old pipeline networks, to enhance service capabilities and operational efficiency, aligning with national policy support for gas safety standards[42] - The company plans to innovate business models in the LPG sector to achieve synergistic development across the industrial chain[42] - The company will expand its kitchen renovation business and optimize community store operations to drive growth in value-added services[42] - The company aims to implement refined management in the natural gas business to improve operational efficiency and customer service quality[42] - The company will promote the linkage mechanism between upstream and downstream natural gas prices and cost supervision policies to achieve residential gas price adjustments[42] - The company is committed to enhancing safety management and ensuring accident-free production by strengthening safety controls and increasing the renovation and maintenance of old gas pipelines[44] - The company is transitioning some refueling stations to multi-energy stations with a focus on oil and electricity, supplemented by gas and hydrogen[51] Employee Costs and Depreciation - Employee costs for the year were 4,320,091 thousand HKD, slightly lower than the previous year's 4,333,831 thousand HKD[22] - Depreciation of property, plant, and equipment was 2,430,372 thousand HKD, an increase from 2,283,191 thousand HKD in the previous year[22] Regulatory and Compliance - The company applied new and revised Hong Kong Financial Reporting Standards (HKFRS) effective from April 1, 2023, including HKFRS 17 for insurance contracts[10] - The annual report for the fiscal year ending March 31, 2024, will be published on the Hong Kong Exchanges and Clearing Limited (HKEX) website and the company's website[81] - The company's board of directors includes executive directors Liu Minghui, Huang Yong, Zhu Weiwei, Li Jing, Liu Chang, and Zhao Kun, as well as non-executive directors Xiong Bin, Liu Mingxing, Jiang Xinhao, and Ayush Gupta, and independent non-executive directors Zhao Yuhua, Mao Erwan, Chen Yanyan, Zhang Ling, and Ma Weihua[81] Market and Industry Trends - Industrial gas demand weakened due to sluggish industrial output growth, impacting overall city gas volume[40] - Residential and commercial gas consumption grew rapidly, offsetting the decline in industrial gas demand[40]