Wind Power Business - The company holds an indirect controlling interest of 86.55% in Hong Song New Energy, which has an installed capacity of 398.4 MW and a maximum capacity of 596.4 MW[8] - The first phase of the wind farm project in Baotou, Inner Mongolia, is expected to reach an installed capacity of 49.8 MW and is still under construction[9] - The company plans to accelerate its wind power business and seeks to establish a solid market position in the renewable energy sector[15] - The total installed capacity of the Hong Song wind farm is 398.4 MW, contributing to the group's total revenue from wind farm operations in 2020[18] - The Chinese government is expected to continue supporting the wind power industry, which will provide significant opportunities for the company's wind farm business[22] - The company plans to focus resources on the development and operation of wind farms, aiming to become a pillar company in the renewable energy sector in northern China[28] - The company is committed to developing wind farm projects to provide clean renewable energy, reducing reliance on traditional fossil fuels[140] Financial Performance - Revenue from wind farm operations for the year ended December 31, 2020, was approximately RMB 346,401,000, a decrease of about 4% compared to RMB 361,683,000 in 2019[17] - Profit from wind farm operations for the same period was approximately RMB 68,944,000, down about 10% from RMB 76,350,000 in 2019[17] - For the year ended December 31, 2020, the company's revenue was approximately RMB 346,401,000, a decrease of RMB 15,282,000 or 4% compared to RMB 361,683,000 for the year ended December 31, 2019[33] - The gross profit for the year ended December 31, 2020, was approximately RMB 112,613,000, resulting in a gross margin of about 33%, compared to 32% in 2019[39] - The operating profit decreased by 29% to RMB 60,857,000 for the year ended December 31, 2020, down from RMB 85,140,000 in 2019[33] - The company reported a loss before tax of RMB 173,877,000 for the year ended December 31, 2020, compared to a loss of RMB 61,607,000 in 2019, representing an increase in loss of 182%[33] - The net loss for the year ended December 31, 2020, was RMB 203,973,000, a significant increase of 153% from RMB 80,778,000 in 2019[33] - The company's cash and cash equivalents decreased to RMB 1,362,795,000 as of December 31, 2020, compared to RMB 1,480,490,000 in 2019[33] - The net asset value as of December 31, 2020, was RMB 633,223,000, down from RMB 790,353,000 in 2019[33] - The current ratio improved to 158% as of December 31, 2020, compared to 123% in 2019[33] - The total loss for the year ended December 31, 2020, was approximately RMB 203,973,000, a substantial increase from the loss of RMB 80,778,000 in 2019[48] Market and Economic Context - In 2020, China's GDP grew by 2.3% despite the impact of COVID-19, highlighting a gradual recovery in economic activities[12] - The Chinese government aims for non-fossil fuels to account for 15% of the energy structure by 2020, 20% by 2030, and 50% by 2050, emphasizing the importance of renewable energy like wind power[13] - In 2020, China added 71.67 GW of new wind power capacity, an increase of approximately 178% compared to 2019, with a cumulative installed capacity of 280 GW, accounting for about 13% of total installed power generation capacity[20] Corporate Governance and Structure - The board of directors includes four executive directors and three independent non-executive directors, with all retiring directors eligible for re-election at the upcoming annual general meeting[106] - The company has not appointed a chairman, with the CEO, Mr. Zhang, responsible for daily management, and the board believes this will not adversely affect decision-making[181] - The board consists of seven directors, including four executive directors and three independent non-executive directors, with a total of 12 board meetings held in the year ended December 31, 2020[172] - The independent non-executive directors account for at least one-third of the board, ensuring compliance with listing rules[171] - The company is committed to maintaining high standards of corporate governance and has adopted a set of governance principles[161] - The company has complied with the corporate governance code as per the listing rules, with some deviations noted regarding attendance at the annual general meeting[162] Legal and Compliance Issues - The company is seeking legal advice regarding court proceedings involving debtors and assessing the recoverability of investments in joint ventures[148] - The company has recognized a full provision for expected credit losses on interests in joint ventures and receivables from joint ventures due to high default risk[147] - The company is seeking legal advice and preparing evidence to pursue further legal action to recover approximately RMB 36,323,000 for remaining equipment costs and RMB 42,100,000 for deposits[153] - The board believes that if the court makes a final ruling on the legal actions against the supplier, there will be no uncertainty regarding the recoverability of other receivables[154] Share Capital and Financing - The company issued convertible bonds totaling HKD 313,795,000, with a conversion price of HKD 0.485 per share, which could potentially result in the issuance of 647,000,000 new shares, representing approximately 35.96% of the company's issued share capital at the time of the agreement[62] - The company completed a placement of 180,000,000 shares at a price of HKD 0.25 per share, raising a net amount of approximately HKD 44,097,000, which was used to repay other loans and interest[67] - The company extended the maturity of the convertible bonds by one year, now set to mature on March 25, 2022[66] - The interest rate on the convertible bonds was revised from 8% to 10% as part of a supplemental agreement, which was subject to shareholder approval[64] - The company has not issued additional non-listed corporate bonds during the reporting period, with a total principal amount of HKD 1,000,000 maturing and redeemed[54] Risk Management - The company emphasizes the importance of effective risk management and internal control measures to ensure operational compliance, asset security, and accurate financial reporting[187] - The risk management strategy includes setting objectives, information collection, risk identification, analysis, response, monitoring, and reporting[188] - The management regularly maintains and evaluates the risk management system to ensure its effectiveness[189] - The board conducts an annual review of major risks faced by the group and monitors the response measures[200] Employee and Operational Information - The employee costs for the year ended December 31, 2020, amounted to approximately RMB 39,152,000, down from RMB 42,764,000 in 2019, with a workforce of about 125 full-time employees[78] - The company has implemented a training program for new directors to ensure they understand their responsibilities and the company's operations[177] Other Financial Information - The auditor's fees for the year ended December 31, 2020, amounted to HKD 1,300,000 for audit services and HKD 180,000 for non-audit services[182] - The company did not recommend any dividend for the year ended December 31, 2020, consistent with the previous year where no dividend was declared[98] - The company has not made any charitable or other donations during the year, maintaining the same stance as in 2019[102]
瑞风新能源(00527) - 2020 - 年度财报