中国电力(02380) - 2020 - 中期财报

Financial Summary This section provides a concise overview of the company's total electricity sales, net profit contributions by generation segment, and key financial position indicators Total Electricity Sales (MWh) | Indicator | H1 2020 | H1 2019 | Change | | :--- | :--- | :--- | :--- | | Total Electricity Sales (MWh) | 39,979,532 | 42,261,760 | -5.40% | | Of which: Hydropower | 11,780,203 | 13,204,537 | -10.79% | | Of which: Wind Power | 2,078,356 | 1,627,093 | 27.73% | | Of which: Photovoltaic Power | 2,132,468 | 1,533,232 | 39.08% | | Of which: Thermal Power | 23,988,505 | 25,896,898 | -7.37% | Net Profit by Segment (RMB Thousand) | Net Profit by Segment (RMB Thousand) | H1 2020 | H1 2019 | | :--- | :--- | :--- | | Hydropower | 1,058,780 | 1,297,861 | | Wind Power | 442,400 | 263,154 | | Photovoltaic Power | 339,395 | 290,844 | | Thermal Power | 357,121 | 88,024 | | Unallocated Portion | (281,990) | (128,504) | Key Financial Indicators | Key Financial Indicators | As of June 30, 2020 | As of December 31, 2019 | Change | | :--- | :--- | :--- | :--- | | Revenue (RMB Thousand) | 13,055,829 | 13,843,958 | -5.69% | | Basic Earnings Per Share (RMB Yuan) | 0.12 | 0.10 | 20.00% | | Equity Attributable to Company Shareholders (RMB Thousand) | 30,000,293 | 30,320,075 | -1.05% | | Total Assets (RMB Thousand) | 146,120,512 | 140,289,698 | 4.16% | | Total Debt (RMB Thousand) | 83,458,613 | 78,568,268 | 6.22% | Management Discussion and Analysis This section provides a comprehensive analysis of the company's operational performance, financial results, strategic developments, and risk management during the reporting period Business Review Despite COVID-19 impacts, the company's H1 2020 profit attributable to shareholders grew 20.09% to RMB 1.173 billion, driven by enhanced new energy contributions and improved thermal power plant profitability, reflecting its ongoing transition to a clean energy focus - In H1 2020, the company's profit attributable to shareholders increased by 20.09% to RMB 1,172,986,000, with basic earnings per share of RMB 0.12[14] Equity Installed Capacity (As of June 30, 2020) | Equity Installed Capacity (As of June 30, 2020) | MW | Proportion | | :--- | :--- | :--- | | Hydropower | 3,134.1 | 14.10% | | Wind Power | 1,602.2 | 7.21% | | Photovoltaic Power | 2,981.6 | 13.41% | | Natural Gas Power | 367.6 | 1.65% | | Total Clean Energy | 8,085.5 | 36.37% | | Thermal Power | 14,147.9 | 63.63% | | Total | 22,233.4 | 100% | - From July 1, 2019, to June 30, 2020, the Group added 1,280.6 MW of equity installed capacity from newly commissioned generating units, with clean energy (hydro, wind, solar) accounting for 73.7%[17][18] Project Development and Projects Under Construction The company actively pursues a clean, integrated, and smart energy transformation strategy, focusing on large-scale PV and smart energy projects while expanding into overseas markets, with nearly half of its projects under construction dedicated to clean energy - The company made progress in clean energy projects, including 407 MW of the Liaoning 500 MW photovoltaic project being commissioned, and completing three integrated smart energy projects in Beijing[19] - The company is actively expanding into overseas markets by signing entrusted management agreements for clean energy and overseas power plants with its parent company and establishing a joint venture focused on the ASEAN region[20] - As of June 30, 2020, equity installed capacity for projects under construction was 4,621.3 MW, with clean energy accounting for 49.27%[21] Operating Performance H1 2020 saw a 5.40% decrease in total electricity sales due to hydropower and thermal power declines, offset by significant growth in wind and solar generation, while heat sales decreased and direct power supply proportion fell - Total electricity sales decreased by 5.40% year-on-year, with: - Hydropower: Decreased by 10.79% due to insufficient rainfall - Wind and Photovoltaic: Increased by 27.73% and 39.08% respectively, due to new unit commissioning and policy support - Thermal Power: Decreased by 7.37% due to pandemic impact and demand decline[27] - Total heat sales were 10,540,134 GJ, a year-on-year decrease of 5.75%, primarily due to a joint venture ceasing heat production[29] - Direct power supply transactions accounted for approximately 36.86% of total electricity sales, down from 41.96% in the prior year, mainly due to industrial users' production halts[30] - Average on-grid tariff changes: - Hydropower: Decreased due to tariff reductions - Wind Power: Increased due to commissioning of new units with higher tariffs - Photovoltaic: Decreased due to subsidy phase-out and commissioning of grid-parity projects - Thermal Power: Slightly increased due to VAT reduction and a decrease in market transaction proportion[31] Financial Performance Analysis H1 2020 revenue declined 5.69% to RMB 13.06 billion due to lower hydropower and thermal power sales, but a significant RMB 747 million reduction in fuel costs boosted operating profit by 1.94% to RMB 3.79 billion and net profit by 5.76% to RMB 1.92 billion Revenue by Segment (RMB Thousand) | Revenue by Segment (RMB Thousand) | H1 2020 | H1 2019 | Change | | :--- | :--- | :--- | :--- | | Hydropower | 2,995,129 | 3,675,395 | -18.51% | | Wind Power | 1,008,735 | 763,026 | 32.20% | | Photovoltaic Power | 1,192,065 | 923,711 | 29.05% | | Thermal Power | 7,859,900 | 8,481,826 | -7.33% | | Total | 13,055,829 | 13,843,958 | -5.69% | - Operating costs decreased by 6.82% year-on-year to RMB 9.69 billion, primarily due to lower coal prices and reduced thermal power sales volume, leading to a RMB 747 million decrease in total fuel costs[39][40] - Finance costs increased by 9.09% year-on-year to RMB 1.68 billion, mainly due to higher interest expenses resulting from increased debt[43] - Share of profits from associates and joint ventures both increased, primarily benefiting from lower coal prices which boosted the net profits of related companies[44][45] Liquidity and Capital Management As of June 30, 2020, the Group's cash and cash equivalents increased to RMB 2.05 billion, while total debt rose to RMB 83.46 billion, and H1 capital expenditure significantly increased to RMB 8.22 billion, with over 70% allocated to clean energy - Cash Flow Overview (For the six months ended June 30, 2020): - Net cash from operating activities: RMB 3.59 billion (year-on-year increase) - Net cash used in investing activities: RMB 6.46 billion (year-on-year increase) - Net cash from financing activities: RMB 3.69 billion (year-on-year increase)[49] - As of June 30, 2020, the Group's total debt was RMB 83.46 billion, with a gearing ratio (net debt/total capital) of approximately 65%, a slight increase from 63% at the end of 2019[50] - Capital expenditure in H1 was RMB 8.22 billion, a significant year-on-year increase, with clean energy segments (hydro, wind, solar) accounting for RMB 5.99 billion, or 73% of total expenditure[51] Risk Management The Group faces significant risks including foreign exchange, funding, and policy changes, alongside operational uncertainties from the COVID-19 pandemic, for which it has established comprehensive risk management mechanisms - Key Risk Exposures: - Foreign Exchange Risk: Holds JPY and USD denominated borrowings, facing RMB exchange rate fluctuation risk - Funding Risk: New project development requires substantial capital, and financing market volatility may affect funding costs and efficiency - Policy Change Risk: Uncertainty from the cancellation of coal-electricity price linkage mechanism, promotion of grid-parity projects, and market-oriented electricity price reforms[232][233][234] - The pandemic exerted pressure on electricity consumption, fuel supply chains, and project construction, but the Group mitigated fuel costs by seizing procurement opportunities, and cash flow risk is controllable as electricity is sold to reputable grid companies[236] Social and Environmental Governance and Outlook The company prioritizes social and environmental responsibility, with no major safety incidents and over 90% of thermal units meeting ultra-low emission standards, while focusing on operational improvements, clean energy transition, and innovation for the second half of the year - In terms of operational safety, the Group effectively responded to the pandemic and Yangtze River basin floods, with no major employee, equipment, or environmental accidents during the period[237] - Regarding energy conservation and emission reduction, over 90% of commissioned thermal power units meet ultra-low emission standards, and the coal consumption rate for power supply remains at a low level[239][240] - Key tasks for the second half of the year: - Operational Management: Expand electricity consumption channels and enhance cross-border operational capabilities - Industrial Transformation: Steadfastly pursue clean, integrated, and smart energy development, accelerating photovoltaic base construction - Technological Innovation: Integrate energy technology with information internet technology to build an integrated smart energy platform - System Reform: Deepen performance appraisal and incentive mechanisms[242] Corporate Governance This section details the company's commitment to high corporate governance standards, including compliance with codes and internal control measures Corporate Governance Practices The company maintains high corporate governance standards, largely complying with the Corporate Governance Code, and has established effective risk management and internal control systems, including successful remote audits during the pandemic - During the reporting period, the company complied with most provisions of the Corporate Governance Code under the Listing Rules, with the temporary dual role of Chairman and President being rectified after July 28, 2020, ensuring segregation of duties[66][67] - The company implemented various measures in risk management and internal control, including initiating remote internal audits during the pandemic, conducting monthly major risk prevention and mitigation efforts, and strengthening post-evaluation of new energy project investments[68] Major Shareholders | Major Shareholder | Identity | Number of Shares Held | Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | State Power Investment Corporation Limited | Interests in controlled corporations | 5,887,793,513 | 60.04% | | China Power International Development Limited | Interests in controlled corporations/Beneficial owner | 5,495,518,060 | 56.03% | | China Power Development Ltd | Beneficial owner | 2,662,000,000 | 27.14% | Independent Review Report This section presents the independent review report on the interim financial information, confirming its preparation in accordance with accounting standards Independent Review Report Ernst & Young conducted an independent review of the Group's interim financial information for the six months ended June 30, 2020, concluding that it was prepared in all material respects according to Hong Kong Accounting Standard 34 - Ernst & Young reviewed the interim financial information, noting that a review has a scope significantly narrower than an audit, thus no audit opinion is expressed[76] - Based on the review, Ernst & Young found nothing to suggest that the interim financial information was not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34[77] Consolidated Financial Statements This section presents the interim condensed consolidated financial statements, including the statement of profit or loss, comprehensive income, financial position, changes in equity, and cash flows Interim Condensed Consolidated Statement of Profit or Loss For the six months ended June 30, 2020, Group revenue decreased to RMB 13.06 billion, but reduced operating expenses led to a slight increase in operating profit to RMB 3.79 billion, with profit attributable to shareholders growing 20.1% to RMB 1.17 billion Interim Condensed Consolidated Statement of Profit or Loss (RMB Thousand) | Item (RMB Thousand) | H1 2020 | H1 2019 | | :--- | :--- | :--- | | Revenue | 13,055,829 | 13,843,958 | | Operating Profit | 3,786,804 | 3,714,586 | | Profit Before Tax | 2,380,414 | 2,363,186 | | Profit for the Period | 1,915,706 | 1,811,379 | | Profit Attributable to Company Shareholders | 1,172,986 | 976,735 | | Basic Earnings Per Share (RMB Yuan) | 0.12 | 0.10 | Interim Condensed Consolidated Statement of Comprehensive Income Building on the RMB 1.92 billion profit for the period, a net other comprehensive expense of RMB 223 million resulted in total comprehensive income of RMB 1.69 billion, with RMB 955 million attributable to company shareholders Interim Condensed Consolidated Statement of Comprehensive Income (RMB Thousand) | Item (RMB Thousand) | H1 2020 | H1 2019 | | :--- | :--- | :--- | | Profit for the Period | 1,915,706 | 1,811,379 | | Other Comprehensive (Expense) / Income, Net of Tax | (223,322) | 148,738 | | Total Comprehensive Income for the Period | 1,692,384 | 1,960,117 | | Attributable to Company Shareholders | 955,113 | 1,129,440 | | Attributable to Non-controlling Interests | 737,271 | 830,677 | Interim Condensed Consolidated Statement of Financial Position As of June 30, 2020, total assets increased to RMB 146.12 billion, driven by property, plant, and equipment, while total liabilities rose to RMB 101.48 billion, and total equity slightly decreased to RMB 44.64 billion Interim Condensed Consolidated Statement of Financial Position (RMB Thousand) | Item (RMB Thousand) | As of June 30, 2020 | As of December 31, 2019 | | :--- | :--- | :--- | | Total Assets | 146,120,512 | 140,289,698 | | Non-current Assets | 132,309,684 | 127,310,657 | | Current Assets | 9,378,571 | 8,352,076 | | Total Liabilities | 101,481,499 | 95,156,489 | | Non-current Liabilities | 61,988,734 | 59,621,301 | | Current Liabilities | 36,543,845 | 32,436,962 | | Total Equity | 44,639,013 | 45,133,209 | | Equity Attributable to Company Shareholders | 30,000,293 | 30,320,075 | Interim Condensed Consolidated Statement of Changes in Equity For the six months ended June 30, 2020, equity attributable to company shareholders decreased from RMB 30.32 billion to RMB 30.00 billion, primarily due to the RMB 1.27 billion final dividend payment exceeding the RMB 955 million total comprehensive income - Equity attributable to shareholders at the beginning of the period was RMB 30.32 billion, with total comprehensive income of RMB 955 million recorded during the period, and a final dividend of RMB 1.27 billion for 2019 paid, resulting in equity attributable to shareholders decreasing to RMB 30.00 billion at period-end[82] Interim Condensed Consolidated Statement of Cash Flows In H1 2020, net cash from operating activities increased to RMB 3.59 billion, while net cash outflow from investing activities expanded to RMB 6.46 billion, and net cash inflow from financing activities significantly rose to RMB 3.69 billion Interim Condensed Consolidated Statement of Cash Flows (RMB Thousand) | Item (RMB Thousand) | H1 2020 | H1 2019 | | :--- | :--- | :--- | | Net Cash from Operating Activities | 3,589,510 | 3,173,432 | | Net Cash Used in Investing Activities | (6,456,662) | (3,757,532) | | Net Cash from Financing Activities | 3,686,080 | 1,048,910 | | Net Increase in Cash and Cash Equivalents | 818,928 | 464,810 | | Cash and Cash Equivalents at End of Period | 2,055,610 | 2,302,854 | Notes to the Interim Condensed Consolidated Financial Statements This section provides key explanatory notes to the interim condensed consolidated financial statements, detailing revenue segmentation, receivables, borrowings, and related party transactions Note 3: Revenue and Segment Information The Group's revenue primarily derives from electricity sales across four segments: thermal, hydro, wind, and photovoltaic power, with thermal being the largest revenue source despite a decline, while hydropower contributed the highest profit Segment Performance (RMB Thousand) | Segment Performance (RMB Thousand) | Revenue | Profit / (Loss) Before Tax | Profit / (Loss) for the Period | | :--- | :--- | :--- | :--- | | Thermal Power | 7,859,900 | 535,768 | 357,121 | | Hydropower | 2,995,129 | 1,284,272 | 1,058,780 | | Wind Power | 1,008,735 | 463,936 | 442,400 | | Photovoltaic Power | 1,192,065 | 358,397 | 339,395 | | Unallocated | - | (261,959) | (281,990) | | Total | 13,055,829 | 2,380,414 | 1,915,706 | Note 15: Trade and Other Receivables As of June 30, 2020, total trade and other receivables amounted to RMB 8.56 billion, with RMB 5.45 billion classified as non-current, primarily representing discounted clean energy tariff subsidies expected after 12 months - Trade and other receivables from regional and provincial grid companies include RMB 5.45 billion in unbilled clean energy tariff subsidies, which are classified as non-current assets and discounted due to an expected recovery period exceeding one year, indicating a significant financing component[117] Note 20 & 21: Bank and Related Party Borrowings As of June 30, 2020, the Group's total bank borrowings were RMB 37.35 billion and related party borrowings were RMB 37.59 billion, primarily denominated in RMB and used for project construction and operations, with some secured by assets Borrowing Types (RMB Thousand) | Borrowing Type (RMB Thousand) | As of June 30, 2020 | | :--- | :--- | | Bank Borrowings | 37,349,452 | | Related Party Borrowings | 37,588,113 | | Other Borrowings | 4,535,000 | | Total Borrowings | 79,472,565 | Note 30: Related Party Transactions The Group conducts extensive ordinary course business transactions with its ultimate holding company and subsidiaries, including significant coal purchases, construction and service fees, and interest payments, all conducted under normal commercial terms - The Group engaged in extensive ordinary course business transactions with related parties, including its ultimate holding company, State Power Investment Corporation, covering fuel procurement, engineering construction, and financial services[163][164] - Significant related party expenditures during the period included RMB 2.87 billion for coal purchases from non-controlling shareholders and approximately RMB 850 million in total interest expenses paid to related parties[167]