Xinjiang Xintai Natural Gas (SH:603393)2020-04-15 16:00Financial Performance - In 2019, the company's operating revenue reached ¥2,296,274,568, representing a year-on-year increase of 40.72% compared to ¥1,631,812,003.87 in 2018[23]. - The net profit attributable to shareholders was ¥422,425,749.43, up 26.26% from ¥334,568,720.37 in the previous year[23]. - The net cash flow from operating activities increased by 75.40% to ¥1,200,219,691.17 from ¥684,258,507.29 in 2018[23]. - The total assets at the end of 2019 were ¥8,538,595,968.17, reflecting a 7.46% increase from ¥7,945,911,568.14 at the end of 2018[23]. - Basic earnings per share rose to ¥1.89, a 26.85% increase from ¥1.49 in 2018[23]. - The weighted average return on equity increased to 17.73%, up 1.13 percentage points from 16.60% in 2018[23]. - The company reported a total revenue of 2,296,274,568 RMB, a year-on-year increase of 40.72%[50]. - Net profit attributable to shareholders was 422,425,700 RMB, up 26.26% compared to the previous year[50]. - The company’s total assets increased, with net assets attributable to shareholders reaching 2,530,052,800 RMB[50]. Dividend Policy - The company plans to distribute a cash dividend of 8 RMB per 10 shares to all shareholders, totaling 179.2 million RMB, based on a total share capital of 224 million shares as of December 31, 2019[6]. - The cash dividend for 2019 was set at 8 RMB per 10 shares, with an additional capital reserve conversion of 4 shares for every 10 shares held[91]. - The company plans to distribute at least 30% of the average distributable profit over the last three years in cumulative dividends every three years[88]. - The company aims for a minimum cash dividend ratio of 80% for mature stages without major capital expenditures, and 40% if there are significant expenditures[88]. - The board must consider industry characteristics, development stages, and profitability when proposing differentiated cash dividend policies[88]. - The company has not adjusted its cash dividend policy during the reporting period[92]. - The board is required to complete the distribution of dividends within two months after shareholder approval[91]. - The company will communicate with minority shareholders to gather their opinions on dividend policies[91]. Operational Overview - The company primarily engages in urban natural gas distribution, sales, household installation, and coalbed methane extraction in Xinjiang, covering 8 cities including Urumqi and Fukang[37]. - The company has established a procurement model where most natural gas is sourced from PetroChina and Sinopec, with contracts typically signed annually to determine pricing and supply[37]. - The company utilizes a pipeline transportation model for natural gas, with a portion also delivered via vehicle, ensuring efficient distribution to various user types[37]. - The natural gas sales price for downstream users is regulated by local government price authorities, with efforts to establish a price linkage mechanism to enhance pricing flexibility[40]. - The company achieved a natural gas sales volume of 578 million cubic meters, with user installations completed for 24,701 households[49]. - Coalbed methane extraction volume reached 931 million cubic meters, representing a 16.07% increase from 802 million cubic meters in 2018[49]. - The company’s operating pipeline length reached 1,036 kilometers, with 22 distribution stations and 20 refueling stations[46]. Market Environment - The natural gas market in China has seen a high growth rate, with increasing supply and diverse sourcing channels, contributing to a favorable market environment[39]. - The global natural gas market is experiencing growth in both supply and consumption, with major contributions from countries like the US, China, and Russia[39]. - The company anticipates that unconventional natural gas will account for 18% of production by 2025, and 41.5% by 2035, enhancing domestic supply capabilities[76]. - The Fuling shale gas field is noted as the largest shale gas field in China, with proven reserves reaching 600.8 billion cubic meters and an annual production capacity of 10 billion cubic meters[75]. Corporate Governance - The company has established measures to ensure that any business opportunities that may compete with its main business will be directed to the company[99]. - The company has a commitment to disclose any related party transactions in a timely manner, adhering to regulatory requirements[99]. - The company guarantees the establishment of an independent governance structure and a complete organizational framework, ensuring no misuse of funds or resources from other controlled enterprises[102]. - The company has established an independent financial accounting department and management system, ensuring independent financial decision-making and tax compliance[102]. - The company has a commitment to maintain a complete operational asset structure independent of its controlling shareholders[99]. Audit and Compliance - The company has a standard unqualified audit report issued by Zhongshun Zhonghuan Accounting Firm[5]. - The audit report confirms that the financial statements of Xinjiang Xintai Natural Gas Co., Ltd. fairly reflect its financial position as of December 31, 2019, in accordance with accounting standards[199]. - The audit opinion indicates that the financial statements provide a true and fair view of the company's operating results and cash flows for the year 2019[199]. - The company has disclosed its internal control self-evaluation report, which is applicable and available on the Shanghai Stock Exchange website[198]. - There were no significant deficiencies in internal control reported during the audit period[198]. Social Responsibility - The company established a "Love Education Poverty Alleviation Scholarship" to support impoverished students in the regions where it operates, with a 100% visit rate to families of reported students[135]. - A total of 43 impoverished students received financial assistance amounting to 430,000 RMB, demonstrating the company's commitment to education poverty alleviation[137]. - The company plans to continue supporting local government poverty alleviation efforts and assist more impoverished students in the future[138]. - The company strictly adheres to environmental protection policies and integrates environmental responsibility into its sustainable development strategy[142]. Employee and Management Structure - The total number of employees in the company and its main subsidiaries is 853, with 55 in the parent company and 798 in major subsidiaries[183]. - The company has established a multi-level salary management and performance evaluation system to adjust the total annual salary based on economic performance, employee count, industry, and regional salary levels[185]. - The company’s board of directors includes 5 internal directors, 1 shareholder representative director, and 3 independent directors, with their remuneration determined by the board's compensation and assessment committee[176]. - The total pre-tax remuneration for the chairman during the reporting period was 2.27 million yuan, while the total for all executives combined was 8.54 million yuan[165]. - The company has appointed a new independent director and a new board secretary during the reporting period[180]. Risks and Challenges - The company’s future plans and development strategies are contingent on the absence of significant changes in objective conditions, highlighting potential investment risks[7]. - The company is subject to various risks, including industry policy changes, competition in the CNG market, and price regulation risks[81]. - The company anticipates potential changes in government subsidy policies for coalbed methane extraction, which could impact profitability[84].