中国电力(02380) - 2019 - 年度财报

2019 Financial Summary The company achieved significant growth in revenue, profit, and power generation in 2019, driven by strong performance across its power generation segments 2019 Key Financial Indicators | Indicator | 2019 | 2018 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue (RMB '000) | 27,763,287 | 23,175,626 | 19.80% | | Profit attributable to equity holders of the Company (RMB '000) | 1,284,381 | 1,098,355 | 16.94% | | Basic earnings per share (RMB) | 0.13 | 0.11 | 18.18% | | Total assets (RMB '000) | 140,289,698 | 124,956,727 | 12.27% | | Total debt (RMB '000) | 78,568,268 | 64,917,976 | 21.03% | 2019 Power Generation and Sales Volume | Item | 2019 (MWh) | 2018 (MWh) | Change (%) | | :--- | :--- | :--- | :--- | | Total power generation | 87,134,871 | 74,101,429 | 17.59% | | Total power sales | 83,558,993 | 70,964,796 | 17.75% | Net Profit by Power Generation Segment (RMB '000) | Segment | 2019 | 2018 | | :--- | :--- | :--- | | Hydropower | 699,707 | 849,881 | | Wind power | 514,570 | 215,612 | | Photovoltaic power | 617,314 | 406,843 | | Thermal power | 553,620 | 517,335 | | Net loss from unallocated portion | (184,061) | (352,486) | Company Information This section provides essential corporate details including board members, committee structures, registration information, and listing particulars - The report provides basic company information, including members of the Board of Directors, chairpersons and members of various committees, registered office, company website, listing information (stock code: 2380), share registrar, company secretary, and auditor[17] Group Structure The report presents the group's organizational chart, reflecting the company's structure as of the annual report publication date - The report displays the group's organizational chart, reflecting the company's structure as of the annual report publication date[20] Company Profile This section provides an overview of the company's business, its existing power generation assets, and ongoing or newly developed projects Company Overview China Power is the core subsidiary for conventional energy business of SPIC, listed on the Hong Kong Stock Exchange in 2004, with its business expanding from single coal-fired power generation to hydropower, wind power, photovoltaic, and integrated energy sectors, reaching a total equity installed capacity of 21,113.2 MW by the end of 2019, with clean energy accounting for 35.57% 2019 Year-End Installed Capacity Overview | Item | Capacity (MW) | Proportion | | :--- | :--- | :--- | | Total equity installed capacity | 21,113.2 | 100% | | Clean energy equity installed capacity | 7,510.1 | 35.57% | - The company's business has diversified from initial coal-fired power generation to various areas including hydropower, wind power, photovoltaic, power distribution and sales, and integrated energy[26] Existing Power Plants As of the end of 2019, the Group owned and operated various types of power plants, with equity installed capacity of 13,603.1 MW for coal-fired power, 3,134.1 MW for hydropower, 1,535.5 MW for wind power, 2,472.9 MW for photovoltaic power, and 367.6 MW for natural gas power Equity Installed Capacity by Power Type (MW) | Power Type | Equity Installed Capacity (MW) | | :--- | :--- | | Coal-fired power | 13,603.1 | | Hydropower | 3,134.1 | | Wind power | 1,535.5 | | Photovoltaic power | 2,472.9 | | Natural gas power | 367.6 | Projects Under Construction and New Developments As of the end of 2019, the Group had projects under construction with an equity installed capacity of 5,409.8 MW, of which clean energy accounted for over 50%, and was actively advancing preliminary work for new projects totaling approximately 2,300 MW, primarily wind, photovoltaic, and natural gas clean energy projects Equity Installed Capacity of Projects Under Construction (MW) | Power Plant Type | Equity Installed Capacity (MW) | Proportion | | :--- | :--- | :--- | | Thermal | 2,673.2 | 49.41% | | Clean energy | 2,736.6 | 50.59% | | Total | 5,409.8 | 100% | - The company is undertaking preliminary work for new projects with a total installed capacity of approximately 2,300 MW, of which renewable energy (wind and photovoltaic) accounts for 2,100 MW, demonstrating a clear strategy towards clean energy transition[34] 2019 Milestones Key events in 2019 included strategic acquisitions, significant project approvals, and notable changes in corporate governance - To accelerate clean energy transition, the company acquired three photovoltaic projects from GCL New Energy and sold partial equity in Pingwei Power Plant Unit 1 and Unit 2 to deepen coal power cooperation[39] - The National Development and Reform Commission approved the "Liaoning Chaoyang 500 MW Photovoltaic Grid Parity Project" as one of the first and largest single photovoltaic grid parity demonstration projects nationwide, with construction commencing in the same year[40] - In corporate governance, Mr Tian Jun was appointed Chairman of the Board in November, and the company also received the "Excellence in Responsibility Information Disclosure" award[42] Letter to Shareholders This section provides a comprehensive review of the company's business performance in 2019 and outlines the strategic outlook for 2020 2019 Business Review In 2019, the Group's operating performance steadily improved, with total power sales increasing by 17.75% year-on-year, total revenue growing by 19.80%, and profit attributable to shareholders rising by 16.94%, while the company high-quality advanced its clean energy transition, with clean energy equity installed capacity reaching 35.57%, and actively expanded integrated smart energy and hydrogen energy applications, simultaneously optimizing its financing structure, reducing comprehensive financing costs by 0.22 percentage points from the beginning of the year 2019 Performance Growth | Indicator | Year-on-Year Growth Rate | | :--- | :--- | | Total power sales | 17.75% | | Total revenue | 19.80% | | Profit attributable to shareholders | 16.94% | - The company adheres to its clean energy transition strategy, vigorously developing grid parity and competitive renewable energy projects, and strictly controlling capital expenditure on coal power[44] - During the year, the company successfully developed a 500 MW grid parity photovoltaic project and sold partial coal power equity, optimizing its installed capacity structure[45] - Significant achievements were made in capital management by broadening financing channels and optimizing debt structure through the issuance of medium-term notes and ultra-short-term financing bonds, resulting in a 0.22 percentage point reduction in comprehensive financing costs[45] 2020 Outlook Looking ahead to 2020, facing opportunities and challenges from deepening power system reform and state-owned enterprise reform, the Group will seek progress while maintaining stability, focusing on improving operational efficiency, strengthening transformational development, deepening reform and innovation, and achieving sustainable development, confident in meeting its operational targets and delivering good returns to shareholders despite the initial impact of the COVID-19 pandemic - 2020 marks the final year of China's "13th Five-Year Plan," and the Group will seize opportunities from supply-side structural reform and power system reform to enhance market competitiveness[47] - Despite the initial COVID-19 pandemic, the Group maintained stable unit operations under strict prevention and control measures, minimizing the impact of the pandemic and demonstrating strong response capabilities[47] Directors and Senior Management Information This section provides detailed personal resumes, professional backgrounds, and current positions for the company's board members and senior management - This section details the personal resumes, professional backgrounds, and positions within the Group for the company's Board members (including executive, non-executive, and independent non-executive directors) and senior management[48][49][50][51][52][53][54][55][56][57][58] Management Discussion and Analysis This section provides an in-depth analysis of the company's operational performance, financial results, capital structure, and risk management strategies Business Review and Operating Results In 2019, the Group's operating performance continued to grow, with profit attributable to shareholders increasing by 16.94% to RMB 1.28 billion, and total power sales increasing by 17.75% year-on-year, primarily due to strong growth in hydropower, wind power, and photovoltaic power, while the company actively promoted clean energy transition, successfully developed grid parity photovoltaic projects, and optimized asset structure, with comprehensive financing costs decreasing by 0.22 percentage points, demonstrating significant financial management effectiveness 2019 Sales Volume by Segment (MWh) | Segment | 2019 | 2018 | Change (%) | | :--- | :--- | :--- | :--- | | Thermal power | 56,019,661 | 51,112,016 | 9.60% | | Hydropower | 20,946,792 | 16,254,508 | 28.87% | | Wind power | 3,289,280 | 1,953,422 | 68.39% | | Photovoltaic power | 3,303,260 | 1,644,850 | 100.82% | | Total | 83,558,993 | 70,964,796 | 17.75% | - The company successfully seized the opportunity of grid parity policy, developing the nation's first and largest single "Liaoning Chaoyang 500 MW Photovoltaic Grid Parity Project," and continuously optimized its asset structure by acquiring high-quality clean energy projects and selling partial coal power equity[59][62] - The Group actively participated in direct power supply transactions, with direct power sales accounting for approximately 46.09% of total power sales in 2019, demonstrating strong market competitiveness[80] Financial Performance Analysis In 2019, the Group's net profit increased by 34.45% year-on-year to RMB 2.2 billion, primarily driven by strong growth in the clean energy sector, with total revenue increasing by 19.80% to RMB 27.76 billion and operating profit growing by 24.17%, however, financial expenses increased by 22.79% year-on-year due to expanded debt scale 2019 Financial Performance Summary (RMB '000) | Indicator | 2019 | 2018 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 27,763,287 | 23,175,626 | 19.80% | | Operating costs | 22,567,558 | 19,421,256 | 16.20% | | Operating profit | 5,481,339 | 4,414,341 | 24.17% | | Finance costs | 3,165,881 | 2,578,254 | 22.79% | | Net profit | 2,201,150 | 1,637,185 | 34.45% | - The main drivers of net profit growth included significant increases in hydropower, wind power, and photovoltaic power revenue, as well as an increase in thermal power revenue, though part of this growth was offset by increased fuel costs, depreciation, staff costs, finance costs, and a one-off asset impairment loss[94] Assets and Capital Structure As of the end of 2019, the Group's equity installed capacity increased by 1,381.6 MW year-on-year to 21,113.2 MW, with the proportion of clean energy rising to 35.57%, and capital expenditure increased year-on-year, primarily invested in clean energy projects, while the Group's total debt increased to RMB 78.57 billion, and the gearing ratio slightly rose to 63%, but the debt structure was optimized through the issuance of medium-term notes and other means 2019 Year-End Equity Installed Capacity Structure | Power Type | Equity Installed Capacity (MW) | Proportion | | :--- | :--- | :--- | | Thermal power | 13,603.1 | 64.43% | | Hydropower | 3,134.1 | 14.85% | | Wind power | 1,535.5 | 7.27% | | Photovoltaic power | 2,472.9 | 11.71% | | Natural gas power | 367.6 | 1.74% | | Total | 21,113.2 | 100% | - Capital expenditure in 2019 was RMB 15.87 billion, a year-on-year increase of 37.3%, with the clean energy sector accounting for 75.2% of this expenditure, reaching RMB 11.94 billion, reflecting the company's strategic investment in clean energy transition[123] Changes in Debt Structure (RMB '000) | Item | 2019 | 2018 | | :--- | :--- | :--- | | Total debt | 78,568,268 | 64,917,976 | | Net debt | 77,330,000 (estimated) | 63,064,932 (estimated) | | Gearing ratio | Approx. 63% | Approx. 60% | Risk Management and Outlook The Group faces key risks including exchange rate risk, funding risk, and policy change risk, which it manages through optimizing funding sources and strengthening policy research, and looking ahead to 2020, the Group will continue to advance clean energy transition, enhance operational efficiency, and address opportunities and challenges from power marketization and state-owned enterprise reforms - Key risks include the impact of RMB exchange rate fluctuations on foreign currency borrowings, funding demand pressure from project development, and changes in on-grid tariffs for coal-fired power and renewable energy subsidy policies[126][127][129] - The Group actively fulfills its environmental responsibilities, with over 90% of its operational thermal power units meeting ultra-low emission standards, and continues to promote energy-saving and emission reduction technological upgrades[130] - In 2020, the Group will focus on improving business operational efficiency, high-quality advancing company transformation, deepening institutional and mechanism reforms, and continuing to emphasize social responsibility, aiming to build a world-class clean energy enterprise[142][143] Corporate Governance Report This report details the company's corporate governance framework, board structure, committee functions, and commitment to accountability and shareholder communication Governance Structure and Board of Directors The company is committed to high standards of corporate governance and has complied with most provisions of the Corporate Governance Code, with its Board of Directors comprising six members possessing diverse professional backgrounds, and during the reporting period, Mr Tian Jun served concurrently as Chairman and President, which the Board believes provides strong leadership, and the Board has established four committees: Audit, Risk Management, Remuneration and Nomination, and Executive, to ensure effective oversight - The company has established a standardized governance structure and effective internal control system, with the Board of Directors and management adhering to good corporate governance principles[145] - The Board of Directors comprises 1 executive director, 2 non-executive directors, and 3 independent non-executive directors, possessing expertise in power technology, strategic planning, financial law, and risk management[148] Board Committees The company has an Audit Committee, a Risk Management Committee, a Remuneration and Nomination Committee, and an Executive Committee, with the Audit, Risk Management, and Remuneration and Nomination Committees primarily led by independent non-executive directors, responsible for overseeing financial reporting, internal controls, risk management, director nominations, and remuneration policies, while the Executive Committee manages the Group's daily operations - The Audit Committee, composed of three independent non-executive directors, is responsible for overseeing financial reporting, internal and external audits, and internal control systems[158] - The Risk Management Committee is responsible for reviewing the Group's risk management strategy, framework, and policies, and reporting significant risk matters to the Board of Directors[161] - The Remuneration and Nomination Committee is responsible for formulating remuneration policies for directors and senior management, reviewing the Board's structure and composition, and nominating suitable director candidates[164] Accountability, Audit and Shareholder Communication The company has established a comprehensive risk management and internal control system, supervised by an internal audit department, which the Board has reviewed and deemed effective, and maintains communication with shareholders through various channels including quarterly disclosures, earnings releases, and its website, having revised its dividend policy in January 2019 to increase the minimum payout ratio from 25% to 50% of profit attributable to shareholders - The Board of Directors, through the Audit Committee and Risk Management Committee, reviewed the effectiveness of the Group's internal control systems for finance, operations, compliance, and risk management, and deemed them effective[180] - The company adopted a new "Dividend Policy," committing to an annual cash dividend amount of no less than 50% of the profit attributable to equity holders of the Company for any financial year, aiming to provide stable dividend returns to shareholders[188] Risk Management Report This report outlines the group's comprehensive risk management framework, including its structure, procedures, and responses to key identified risks Risk Management Structure and Procedures The Group has established a "three lines of defense" comprehensive risk management framework, where business units, risk management functional departments, and the internal audit department respectively undertake responsibilities for risk management, supervision, and independent assurance, with risk management procedures covering the entire process of policy formulation, risk identification, assessment, treatment, and reporting and monitoring, and specific management procedures are in place for important investment projects and key risk areas - The Group has established a "business, supervision and support, assurance" three lines of defense risk management framework, extending risk management responsibilities to the Board of Directors, management, and all employees[196][200] - The risk management mechanism comprises comprehensive risk management, risk management for important investment projects, and specialized risk management for key risk areas, ensuring comprehensive risk identification, assessment, and closed-loop tracking[201][202][203][204] Key Risks and Countermeasures In 2019, the Group identified key significant risks including compliance management risk, policy risk, market risk, exchange rate risk, project engineering management risk, and cash flow risk, and developed detailed countermeasures for each risk, such as strengthening policy analysis, market expansion, optimizing debt structure, and enhancing project supervision, to ensure risks are controllable Key Risks and Response Strategies | Risk Category | Risk Description | Key Countermeasures | | :--- | :--- | :--- | | Compliance Management Risk | Newly acquired subsidiaries' insufficient understanding of listed company regulatory rules may affect the timeliness and accuracy of information disclosure | Strengthen training, clarify responsibilities, innovate audit methods | | Policy Risk | Changes in renewable energy tariffs and subsidy policies may affect revenue and profit | Strengthen policy analysis, adjust development strategy, actively pursue grid parity projects | | Market Risk | Decreased electricity demand due to economic structural adjustments | Expand direct power supply market, develop integrated energy services, explore new heating markets | | Exchange Rate Risk | USD exchange rate fluctuations create uncertainty for foreign currency debt | Optimize currency structure of assets and liabilities, consider using financial derivatives for hedging when appropriate | | Project Engineering Management Risk | Project construction faces risks related to safety, progress, compliance, and land ownership | Strengthen contractor screening, construction personnel training, on-site inspections, and land ownership verification | Environmental Protection and Social Responsibility Report Summary This summary outlines the group's commitment to environmental protection, climate change initiatives, and various social responsibility practices Environmental Protection and Climate Change The Group adheres to the philosophy of "committed to clean development, dedicated to green energy" and actively responds to climate change, strategically focusing on developing clean energy, promoting the clean transformation of existing coal-fired power, and exploring emerging energies like hydrogen, while operationally strictly controlling atmospheric pollutant emissions, with over 90% of coal-fired units meeting ultra-low emission standards, and in 2019, clean energy generation was equivalent to a reduction of 22.127 million tons of carbon dioxide emissions - The company's climate change strategies include: focusing on developing clean energy, achieving comprehensive clean transformation of existing coal-fired power, reducing coal power investments, promoting technological innovation, and exploring hydrogen and other energy sources[267][268] - As of the end of 2019, over 90% of operational coal-fired units met ultra-low emission standards, and clean energy generation during the year was 27,902,917 MWh, equivalent to a reduction of 22,127,013 tons of carbon dioxide emissions[269] Social Responsibility Practices The Group prioritizes people, safeguarding employee rights, and providing a positive work environment and development platform, while in its operations, the company ensures safe and reliable power supply, establishes fair and just cooperative relationships with suppliers, integrating social responsibility into supply chain management, and actively participates in community building, fulfilling its social responsibilities - In supply chain management, the Group established a strict supplier review system and incorporated environmental requirements into procurement contracts, reviewing a total of 4,386 suppliers in 2019[274][275] - The company adheres to the "safety first" principle, with no major safety incidents involving employees, equipment, or environmental aspects occurring in 2019[276] Investor Relations and Frequently Asked Questions This section details the company's investor relations activities and provides answers to frequently asked questions regarding its strategy and dividend policy - The company highly values investor relations, maintaining communication with investors through various forms such as earnings release conferences, shareholder meetings, roadshows, and investor forums[279][1000][1002] - In 2019, the company conducted roadshows in mainland China, Hong Kong, Singapore, and the United States, meeting with numerous analysts and fund managers[1002] - The FAQs clarify the company's development strategy to become a world-class clean energy enterprise, explain its views on coal-fired power price reform and renewable energy subsidy policies, and reiterate the dividend policy of a payout ratio no less than 50% of profit attributable to shareholders[285][290][292][293] Directors' Report This report covers the Board's recommendations for dividend distribution, details on financing activities, and disclosures regarding related party transactions - The Board of Directors recommends a final dividend of RMB 0.13 per share for the year 2019[296] - During the reporting period, the company issued ultra-short-term financing bonds totaling RMB 500 million and medium-term notes totaling RMB 2 billion to optimize its financing structure[300] - The report details related party transactions during the year, including property transaction contracts for the sale of partial equity in Pingwei Power Plant Unit 1 and Unit 2, multiple engineering general contracting agreements, power generation quota trading agreements, and ongoing related party transactions, confirming compliance with relevant listing rules[314][315][316][317][318][319][320] Independent Auditor's Report This report presents the independent auditor's opinion on the financial statements and highlights key audit matters addressed during the audit process - Deloitte Touche Tohmatsu issued an unmodified opinion on the company's 2019 consolidated financial statements, affirming that the statements present a true and fair view of the Group's financial position and performance[360] - Key audit matters included assessing the recoverable amounts of certain cash-generating units in the thermal power, hydropower, and photovoltaic power segments, and valuing the provision for inundation compensation arising from the construction of hydropower plants[362][363][365] Consolidated Financial Statements This section presents the company's consolidated financial statements, including the income statement, balance sheet, cash flow statement, and detailed notes Main Financial Statements In 2019, the Group achieved revenue of RMB 27.76 billion, a year-on-year increase of 19.8%, and a profit for the year of RMB 2.20 billion, a year-on-year increase of 34.5%, with total assets increasing to RMB 140.29 billion and total equity to RMB 45.13 billion, while net cash inflow from operating activities was RMB 5.16 billion, net cash outflow from investing activities was RMB 15.82 billion, and net cash inflow from financing activities was RMB 10.05 billion Consolidated Statement of Comprehensive Income Summary (RMB '000) | Indicator | 2019 | 2018 | | :--- | :--- | :--- | | Revenue | 27,763,287 | 23,175,626 | | Operating profit | 5,481,339 | 4,414,341 | | Profit before tax | 2,714,163 | 2,069,948 | | Profit for the year | 2,201,150 | 1,637,185 | | Profit attributable to equity holders of the Company | 1,284,381 | 1,098,355 | Consolidated Statement of Financial Position Summary (RMB '000) | Indicator | 2019 | 2018 (Restated) | | :--- | :--- | :--- | | Total assets | 140,289,698 | 124,956,727 | | Total liabilities | 95,156,489 | 82,107,695 | | Total equity | 45,133,209 | 42,849,032 | Consolidated Statement of Cash Flows Summary (RMB '000) | Indicator | 2019 | 2018 | | :--- | :--- | :--- | | Net cash from operating activities | 5,158,172 | 2,784,456 | | Net cash used in investing activities | (15,816,887) | (12,184,593) | | Net cash from financing activities | 10,047,782 | 6,676,615 | | Net decrease in cash and cash equivalents | (610,933) | (2,723,522) | Notes to the Consolidated Financial Statements The financial statement notes detail the company's significant accounting policies, including the impact of the first-time application of HKFRS 16 "Leases," and disclose segment information, related party transactions, financial instrument risks, and subsidiary acquisitions, with key accounting estimates involving impairment of non-financial assets, provision for inundation compensation, and income tax expenses - The company first applied HKFRS 16 "Leases" in 2019, retrospectively adjusting its financial statements to recognize right-of-use assets and lease liabilities, and restating comparative data[391][392][393] - Segment information shows that all power generation segments (thermal, hydro, wind, photovoltaic) achieved growth in revenue and profit in 2019, with particularly significant revenue growth in wind and photovoltaic power[473] - During the year, the company completed the acquisition of several companies, including Jiangling GCL, Xinan GCL, Ruzhou GCL, and Daqing Meiyangda, expanding its clean energy asset portfolio and recognizing related goodwill or bargain purchase gains[629][639] Five-Year Financial and Operational Summary This section provides a five-year overview of the company's key financial and operational performance indicators 2015-2019 Key Financial and Operational Data (RMB millions) | Indicator | 2019 | 2018 | 2017 | 2016 | 2015 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 27,763.3 | 23,175.6 | 19,966.8 | 18,866.2 | 20,196.7 | | Profit for the year | 2,201.2 | 1,637.2 | 1,280.7 | 3,255.5 | 5,329.6 | | Profit attributable to equity holders of the Company | 1,284.4 | 1,098.4 | 795.3 | 2,365.9 | 4,149.0 | | Total assets | 140,289.7 | 124,956.7 | 98,026.6 | 91,187.1 | 86,243.2 | | Net assets | 45,133.2 | 42,849.0 | 37,194.5 | 34,594.8 | 34,225.8 | | Equity installed capacity (MW) | 21,113.2 | 19,731.6 | 17,051.6 | 16,728.6 | 16,254.6 | | Total power sales (MWh) | 83,558,993 | 70,964,796 | 64,053,714 | 60,760,318 | 60,868,493 | Glossary of Technical Terms This section provides detailed definitions and explanations for key technical terms and company entity abbreviations used throughout the report - This section provides detailed definitions and explanations for key technical terms (such as "equity installed capacity," "average utilization hours," "coal consumption rate for power supply") and company entity abbreviations (such as "SPIC," "Wuling Power") used in the report[707][708][709] Information for Investors This section provides important dates for investors, including the annual general meeting and dividend payment schedule, along with investor contact information - This section provides an investor calendar, including key dates such as the Annual General Meeting date, ex-dividend date, share transfer registration suspension period, and proposed final dividend payment date[712] - Investor inquiry contact information is provided, including the address, telephone, fax, and email for the share registrar and the company's Capital Operations and Investor Relations Department[713]