新天绿色能源(00956) - 2018 - 年度财报

Chairman's Statement The Chairman's statement highlights the group's strong performance in 2018, driven by supportive national policies for clean energy, with growth across wind power and natural gas businesses, and outlines strategic priorities for 2019 Chairman's Statement Chairman Cao Xin's statement notes that in 2018, the group's wind power and natural gas businesses achieved good development and improved operating indicators, benefiting from national clean energy policies, with increases in total assets, revenue, and profit, and outlines continued focus on new energy projects and natural gas supply, production, storage, and sales system construction in 2019 to reward shareholders Key Operating and Financial Indicators for 2018 | Indicator | 2018 Data | | :--- | :--- | | Electricity Sales (Wind and PV) | 7.397 billion kWh | | Natural Gas Sales | 2.631 billion cubic meters | | Consolidated Total Assets | RMB 39.161 billion | | Operating Revenue | RMB 9.975 billion | | Total Profit | RMB 1.743 billion | | Net Profit | RMB 1.575 billion | | Net Profit Attributable to Parent Company | RMB 1.269 billion | - In 2019, the group will continue to focus on renewable and clean energy, actively acquire new energy resources, advance the construction of natural gas production, supply, storage, and sales systems, and strengthen project control, talent development, financing channels, and financial management[7] Company Profile This section provides an overview of the company's establishment, core businesses in wind power and natural gas, and its organizational structure and project portfolio Company Overview Xintian Green Energy was established in 2010 and listed on the Hong Kong Stock Exchange in the same year, with core businesses in wind power across multiple provinces and natural gas primarily operating transmission and distribution facilities in Hebei Province - The company primarily engages in the development and utilization of new energy (wind power) and clean energy (natural gas)[8] 2018 Year-End Operating Data by Business Segment | Business Segment | 2018 Year-End Operating Data | | :--- | :--- | | Wind Power Business | Controlled installed capacity of 3,858.15 MW, equity installed capacity of 3,482.75 MW, annual power generation of 7.676 billion kWh, and 2,482 utilization hours | | Natural Gas Business | Owns 6 long-distance pipelines, 14 high-pressure branch pipelines, 30 city gas projects, and other facilities, with annual natural gas sales of 2.631 billion cubic meters | Company Structure The report presents the group's organizational chart as of December 31, 2018, including only first-tier subsidiaries and marking joint ventures, associates, and long-term investment companies Project Overview This chapter details the group's controlled wind power, photovoltaic power projects, and major natural gas projects, with wind power projects widely distributed across several provinces totaling 3,858.15 MW of installed capacity, and natural gas projects primarily concentrated in Hebei Province, covering long-distance pipelines, city gas, and CNG mother stations Total Installed Capacity by Project Type | Project Type | Total | | :--- | :--- | | Controlled Wind Power Project Installed Capacity | 3,858.15 MW | | Controlled Photovoltaic Project Installed Capacity | 101 MW | - The group's natural gas project network is comprehensive, including 6 long-distance pipelines, multiple city gas projects, and 7 CNG mother stations, primarily serving Hebei Province[19][21][22] Financial Highlights and Key Operating Data This section summarizes the company's strong financial performance in 2018, including significant growth in revenue, net profit, and total assets Financial Highlights and Key Operating Data During the reporting period, the company demonstrated strong financial performance, with 2018 operating revenue reaching RMB 9.975 billion, a 41.4% year-on-year increase, and net profit at RMB 1.575 billion, a 42.6% year-on-year increase, while total assets steadily grew to RMB 39.161 billion, and earnings per share increased from 25.29 cents in 2017 to 33.37 cents Key Financial Indicators (RMB Thousand) | Indicator (RMB Thousand) | 2018 | 2017 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 9,975,409 | 7,057,582 | +41.4% | | Profit Before Tax | 1,743,158 | 1,203,874 | +44.8% | | Profit for the Year | 1,575,164 | 1,104,727 | +42.6% | | Profit Attributable to Parent Company | 1,268,506 | 939,616 | +35.0% | Key Financial Position Indicators (RMB Thousand) | Indicator (RMB Thousand) | 2018 Year-End | 2017 Year-End | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Total Assets | 39,160,828 | 34,288,089 | +14.2% | | Total Liabilities | 26,764,276 | 23,786,999 | +12.5% | | Total Equity | 12,396,552 | 10,501,090 | +18.0% | Management Discussion and Analysis This section provides an in-depth review of the operating environment, business performance, financial condition, and future outlook, along with an analysis of risk factors and management strategies Operating Environment In 2018, China's macro economy maintained stable growth, with continued optimization of energy consumption structure and an increased share of clean energy, while the wind power sector benefited from policies addressing curtailment and promoting grid parity, and the natural gas sector saw rapid demand growth driven by "coal-to-gas" policies and favorable pricing reforms - In 2018, China's new grid-connected wind power capacity reached 20.59 GW, with cumulative capacity of 184 GW, and the annual average wind curtailment rate decreased to 7%, a 5 percentage point year-on-year reduction[35][36] - The National Development and Reform Commission and the National Energy Administration issued the "Clean Energy Consumption Action Plan (2018-2020)" and "Notice on Actively Promoting Grid Parity for Wind and Photovoltaic Power Generation Without Subsidies," providing policy support for industry development[36][37] - In 2018, apparent natural gas consumption reached 280.3 billion cubic meters, an 18.1% year-on-year increase, with the state introducing policies to rationalize residential gas gate prices and issuing opinions to promote coordinated and stable development of natural gas[38][39][40] Business Review In 2018, both of the company's core businesses achieved significant growth, with wind power seeing increased installed capacity, utilization hours, and reduced curtailment, leading to higher revenue and operating profit, while natural gas sales surged by 40% year-on-year due to environmental policies, with continued pipeline construction and market expansion driving operating profit up by over 100% Wind Power Business In 2018, the wind power business added 509.8 MW of controlled installed capacity, reaching a cumulative total of 3,858.15 MW, with average utilization hours increasing to 2,482 hours, exceeding the Hebei provincial average, and curtailment rate decreasing to 5.43%, resulting in revenue of RMB 3.422 billion, a 10.35% year-on-year increase, and operating profit of RMB 1.913 billion, a 15.73% year-on-year increase, with gross margin improving to 61.32% Wind Power Business Operating Indicators | Wind Power Business Operating Indicator | 2018 Data | Year-on-Year Change | | :--- | :--- | :--- | | New Controlled Installed Capacity | 509.8 MW | - | | Cumulative Controlled Installed Capacity | 3,858.15 MW | - | | Average Utilization Hours | 2,482 hours | Increased by 90 hours | | Curtailment Rate | 5.43% | Decreased by 2.39 percentage points | Wind Power Business Financial Indicators (RMB) | Wind Power Business Financial Indicator (RMB) | 2018 Data | Year-on-Year Growth | | :--- | :--- | :--- | | Sales Revenue | 3.422 billion | 10.35% | | Operating Profit | 1.913 billion | 15.73% | | Gross Margin | 61.32% | Increased by 1.7 percentage points | Natural Gas Business In 2018, natural gas sales reached 2.631 billion cubic meters, a significant 40.0% year-on-year increase, with wholesale gas volume growing by 48.3%, and 1,054.50 km of new pipelines added during the year, bringing cumulative operational pipelines to 4,142.17 km, resulting in revenue of RMB 6.551 billion, a 65.55% year-on-year increase, and operating profit of RMB 399 million, a 108.9% year-on-year increase Natural Gas Sales Volume by Category | Natural Gas Sales Category | 2018 Sales Volume (billion cubic meters) | Year-on-Year Growth | | :--- | :--- | :--- | | Total Sales Volume | 2.631 | 40.0% | | Wholesale Gas Volume | 1.62 | 48.3% | | Retail Gas Volume | 0.92 | 31.5% | | CNG/LNG Gas Volume | 0.092 | 4.8% | Natural Gas Business Financial Indicators (RMB) | Natural Gas Business Financial Indicator (RMB) | 2018 Data | Year-on-Year Growth | | :--- | :--- | :--- | | Sales Revenue | 6.551 billion | 65.55% | | Operating Profit | 399 million | 108.9% | | Gross Margin | 11.61% | Increased by 0.01 percentage points | Analysis of Financial Condition and Operating Results In 2018, the group's overall performance achieved substantial growth, with net profit increasing by 42.58% to RMB 1.575 billion and net profit attributable to the parent company growing by 35.00% to RMB 1.269 billion, driven by a 41.33% increase in total revenue from both natural gas and wind power businesses, while operating expenses rose with business expansion, but profitability significantly improved, and the company's financial position remained stable, with the net debt-to-equity ratio slightly decreasing from 67% to 66% - In 2018, the group's total revenue was RMB 9.975 billion, a 41.33% year-on-year increase, with natural gas business revenue growing by 65.55% and wind power business revenue by 10.35%[59] - Total operating expenses were RMB 7.837 billion, a 45.83% year-on-year increase, primarily due to a significant rise in natural gas procurement costs with increased sales volume[61] - Trade receivables and bills receivable increased by RMB 549 million to RMB 3.296 billion, mainly due to an increase in uncollected renewable energy tariff surcharge subsidies for the wind power business[68] Capital Expenditures (RMB Thousand) | Capital Expenditure (RMB Thousand) | 2018 | 2017 | Change Rate | | :--- | :--- | :--- | :--- | | Natural Gas | 638,546 | 443,506 | +43.98% | | Wind Power and Solar | 4,484,152 | 3,477,966 | +28.93% | | Total | 5,124,805 | 3,921,751 | +30.68% | 2019 Work Outlook Looking ahead to 2019, the group will seize opportunities from ecological civilization construction and energy revolution, with the wind power business focusing on resource development, especially projects supporting external transmission channels, and strengthening engineering control and information technology, while the natural gas business will expand market share, integrate the downstream industrial chain, and accelerate key long-distance pipeline projects, and the company will also continue to broaden financing channels and innovate financing methods to meet future capital needs - Wind power business outlook: Actively seize resources, tightly control comprehensive engineering management, solidify safety production foundations, and strengthen information technology construction[76][77] - Natural gas business outlook: Expand market share, integrate the downstream industrial chain, and accelerate progress on key long-distance pipeline projects such as Hebei Central Ten Counties Phase III and Beijing-Handan Re-line[78] - Financing outlook: Broaden financing channels, innovate financing methods, consider asset securitization, financial leasing, insurance funds, and other measures to ensure the group's stable development[79] Risk Factors and Risk Management The company faces key risks including wind resource uncertainty, declining electricity prices, curtailment issues, and construction management difficulties in its wind power business; winter supply guarantee responsibilities and accounts receivable recovery risks in its natural gas business; and the impact of interest rate fluctuations on funding costs, for which the company has implemented corresponding risk management measures such as prioritizing projects with good grid conditions, establishing a multi-source gas supply system, accelerating accounts receivable collection, and broadening financing channels - Wind power business risks: Wind resource fluctuations, declining electricity prices (wind-coal parity), wind curtailment, and difficulties in engineering construction management[80][81][82][84] - Natural gas business risks: Significant responsibility for winter supply guarantee, requiring stable supply; accounts receivable recovery, while controllable, still requires time[85][86] - Interest rate risk: The company has substantial capital expenditures and high demand for borrowed funds, so interest rate changes will affect funding costs; the company will address this by expanding financing channels and securing optimal interest rates[87] Human Resources This section details the company's employee structure, talent management strategies, and training initiatives Human Resources As of the end of 2018, the group had 2,221 employees with an average age of 31.64 years, and 58% holding a bachelor's degree or higher, with the company continuously improving its recruitment, training, and compensation performance management systems around its core industries, adhering to performance-oriented compensation, adopting a combination of internal and external recruitment, and focusing on multi-level talent development and cultivation to support the group's strategic growth Employee Composition | Employee Composition | Number/Percentage | | :--- | :--- | | Total Employees | 2,221 people | | Wind Power, Solar Business | 960 people | | Natural Gas Business | 1,191 people | | Bachelor's Degree and Above | 1,291 people (58%) | - The company's human resources strategy aims to establish an organizational structure adaptable to rapid development, providing support for strategic implementation[90] - The company is committed to talent development, enhancing employee skills through a combination of internal training, external training, and online courses, and has formulated a three-year development plan for management personnel[93] Biographies of Directors, Supervisors, and Senior Management This section provides detailed biographies of the company's non-executive directors, executive directors, independent non-executive directors, supervisors, senior management, and joint company secretaries, including their age, educational background, professional qualifications, and experience in the company and other organizations Biographies of Directors, Supervisors, and Senior Management This chapter provides detailed personal biographies of the company's non-executive directors, executive directors, independent non-executive directors, supervisors, senior management, and joint company secretaries, including their age, educational background, professional qualifications, and employment history within the company and other organizations Report of the Board of Directors This section reviews the company's business performance in 2018, discusses share capital, A-share IPO, dividend policy, key customers and suppliers, related party transactions, and significant legal proceedings Business Review The Board of Directors reviewed the 2018 business, noting rapid growth in wind power and natural gas, compliance with relevant laws and regulations without environmental pollution incidents, outlining key risks, expressing optimism for 2019 business development, and emphasizing the company's good relationships with employees, customers, and suppliers, as well as its commitment to environmental protection 2018 Key Performance Indicators | 2018 Key Performance Indicator | Data | Year-on-Year Growth | | :--- | :--- | :--- | | Electricity Sales | 7.397 billion kWh | 10.5% | | Natural Gas Sales | 2.631 billion cubic meters | 40% | | Operating Revenue | 9.975 billion RMB | 41.3% | | Total Profit | 1.743 billion RMB | 44.8% | | Net Profit | 1.575 billion RMB | 42.5% | | Net Profit Attributable to Parent Company | 1.269 billion RMB | 35.0% | Share Capital and Securities Issuance As of the end of 2018, the company's total share capital was 3.715 billion shares, with RMB 590 million in perpetual green corporate bonds and RMB 1.5 billion in three tranches of ultra-short-term financing bonds issued during the reporting period, primarily for green industry projects, debt repayment, and working capital, while the use of HKD 1.564 billion raised from the 2014 H-share placement was also disclosed, with most allocated to wind power and natural gas projects - In 2018, RMB 590 million in perpetual green corporate bonds and three tranches totaling RMB 1.5 billion in ultra-short-term financing bonds were issued[114][115] - As of the end of 2018, approximately 78.70% of the HKD 1.564 billion raised from the 2014 H-share placement had been used for wind power and natural gas businesses, 13.55% for supplementing working capital, with approximately HKD 121 million remaining unused[116] A-share Initial Public Offering The company plans to issue no more than 134,750,000 A-shares in its initial public offering on the Shanghai Stock Exchange, with the A-share issuance plan's validity extended by 12 months in September 2018, and the company receiving the acceptance letter for its A-share issuance application from the China Securities Regulatory Commission on November 2, 2018, with related work progressing orderly - The company's A-share issuance application was accepted by the China Securities Regulatory Commission on November 2, 2018[117] Profit Distribution and Dividend Policy The Board of Directors recommends a final dividend of RMB 0.125 per share (tax inclusive) for 2018, totaling approximately RMB 464 million, with detailed policies for withholding enterprise income tax and individual income tax on dividends for H-share non-resident enterprise shareholders and individual shareholders, typically at a 10% rate or as determined by relevant tax agreements - A final dividend of RMB 0.125 per share (tax inclusive) is recommended for the 2018 financial year[119] Major Customers and Suppliers In 2018, the group's procurement and sales concentration was relatively high, with the top five suppliers accounting for 61.41% of total procurement, and the largest supplier accounting for 34.42%, while the top five customers accounted for 42.66% of total sales, and the largest customer accounted for 22.29% - Top five suppliers accounted for 61.41% of procurement, with the largest supplier accounting for 34.42%[122] - Top five customers accounted for 42.66% of sales, with the largest customer accounting for 22.29%[122] Related Party Transactions During the reporting period, the group engaged in multiple related party transactions, including one-off transactions such as the controlling shareholder Hebei Construction & Investment Group's capital injection into subsidiary Yanshan Guyuan and the establishment of joint venture Hebei Gas, as well as continuing related party transactions like the greenhouse gas emission reduction project management agreement with Jiantou Guorong, office lease agreement with Hebei Construction & Investment Group, financial services framework agreement with Huihai Leasing, and financial services framework agreement with the Group Finance Company, all of which followed relevant disclosure and approval procedures - One-off related party transactions: Controlling shareholder Hebei Construction & Investment Group injected RMB 50 million into Yanshan Guyuan; established Hebei Gas Company with Hebei Construction & Investment Group with a registered capital of RMB 100 million, where the company holds a 55% stake[133][134] - Continuing related party transactions: Signed a financial services framework agreement (financial leasing and factoring) with Huihai Leasing, and renewed the financial services framework agreement (deposits, loans, etc.) with the Group Finance Company[139][140][141] Significant Legal Proceedings During the reporting period, the group was involved in several significant lawsuits or arbitration cases, with the arbitration case against Hebei Electric Power Construction No. 1 Company having been executed, the outstanding payment case with Yuanhua Glass being fulfilled according to a settlement agreement, an arbitration between Laiyuan Xintian and Guodian United Power regarding a wind turbine procurement contract involving a substantial amount still awaiting ruling, and Hebei Natural Gas having applied for compulsory enforcement regarding outstanding payments from Daguanming Company - Laiyuan Xintian and Guodian United Power are in arbitration regarding a wind turbine procurement contract, with Guodian United claiming approximately RMB 180 million and Laiyuan Xintian counter-claiming approximately RMB 170 million, and the case is still awaiting ruling[151] - Hebei Natural Gas applied to the court for compulsory enforcement regarding outstanding payments totaling RMB 76.9 million plus corresponding interest from Daguanming Company and its affiliates, and the case is still in progress[151][152] Corporate Governance Report This section outlines the composition and responsibilities of the Board of Directors and its committees, as well as the company's risk management and internal control systems Board of Directors During the reporting period, the Board of Directors comprised 11 directors, including 5 non-executive directors, 2 executive directors, and 4 independent non-executive directors, complying with listing rules, with clearly defined responsibilities for major company decisions, holding 15 meetings in 2018 with 100% attendance by all directors, and the positions of Chairman and President held by different individuals to ensure independent responsibilities Board of Directors Composition | Board of Directors Composition | Number | | :--- | :--- | | Non-Executive Directors | 5 | | Executive Directors | 2 | | Independent Non-Executive Directors | 4 | | Total | 11 | - In 2018, the Board of Directors held 15 meetings, with a 100% attendance rate for all directors[164] Board Committees The Board of Directors has four committees: Audit, Remuneration and Appraisal, Nomination, and Strategy and Investment, with the Audit Committee holding four meetings to review annual audits, internal controls, and accounting policy changes, the Remuneration and Appraisal Committee holding one meeting to approve executive compensation, the Strategy and Investment Committee holding one meeting to review A-share issuance proposals, and the Nomination Committee not holding any meetings during the year - The Audit Committee held 4 meetings during the year, reviewing important matters such as annual audit results, internal audit and risk management reports, and changes in accounting policies[171][172] - The Remuneration and Appraisal Committee held 1 meeting, approving the 2017 annual salary realization plan for the company's management team[173] Risk Management and Internal Control In 2018, the group continued to improve its risk management and internal control system, focusing on annual risk assessment, major risk early warning and response, updating its risk event database, refining the major risk early warning mechanism, and monitoring quarterly, while also advancing institutional management system construction, implementing policies at the job level, and providing internal control training to frontline employees, with the Board of Directors reviewing and deeming the risk management and internal control systems effective and sufficient - The Board of Directors confirmed that it has reviewed the risk management and internal control systems as of December 31, 2018, and considers them effective and sufficient[182] Report of the Supervisory Committee This section details the Supervisory Committee's composition, meeting activities, and oversight of the company's operations, financial status, director and senior management performance, related party transactions, and information disclosure Report of the Supervisory Committee During the reporting period, the Supervisory Committee, composed of 6 supervisors, held three meetings to review important proposals such as the annual financial report, A-share issuance plan, and interim results, overseeing the company's operations, financial status, performance of directors and senior management, related party transactions, and information disclosure by attending Board and shareholder meetings and reviewing proposals, concluding that the company operated legally and compliantly, directors and senior management diligently performed their duties, financial reports were true and fair, and no actions detrimental to the company or shareholders were found - The Supervisory Committee believes that the company's operations are legal and compliant, directors and senior management are diligent in their duties, and no illegal or shareholder-detrimental actions were found[196][197] - The Supervisory Committee believes that the company's financial statements truly and fairly reflect its financial position and operating results, related party transactions are fair and reasonable, and information disclosure is true, accurate, and complete[198][199][200] Independent Auditor's Report This section presents the independent auditor's opinion on the consolidated financial statements and highlights key audit matters Independent Auditor's Report Ernst & Young issued a standard unqualified audit opinion, stating that the consolidated financial statements truly and fairly reflect the group's consolidated financial position as of December 31, 2018, and its financial performance and cash flows for the year, in accordance with International Financial Reporting Standards, with key audit matters including impairment assessment of trade receivables and bills receivable, goodwill impairment, and provision for restoration costs - Audit Opinion: Ernst & Young believes that the financial statements truly and fairly reflect the group's financial position and operating results[202] - Key Audit Matters include: - Impairment assessment of trade receivables and bills receivable: Involves management's judgment on collectability, especially after adopting new accounting standards - Goodwill impairment: Impairment assessment procedures are complex, requiring high judgment on revenue growth rates, gross margins, and discount rates - Provision for restoration costs: Involves estimates of future cash outflows and discount rates for restoring infrastructure sites at the end of service concession periods[204][207][208] Consolidated Financial Statements This section presents the consolidated statements of profit or loss and other comprehensive income, financial position, and cash flows for the group Consolidated Statement of Profit or Loss and Other Comprehensive Income For the year ended 2018, the group achieved operating revenue of RMB 9.975 billion, a 41.4% year-on-year increase, with gross profit of RMB 2.860 billion, a 23.9% year-on-year increase, and net profit reaching RMB 1.575 billion, a 42.6% year-on-year increase, while net profit attributable to owners of the parent company was RMB 1.269 billion, a 35.0% year-on-year increase, and basic earnings per share were RMB 33.37 cents Consolidated Statement of Profit or Loss and Other Comprehensive Income (RMB Thousand) | Item (RMB Thousand) | 2018 | 2017 | | :--- | :--- | :--- | | Revenue | 9,975,409 | 7,057,582 | | Gross Profit | 2,859,845 | 2,307,905 | | Operating Profit | 2,238,542 | 1,764,244 | | Profit Before Tax | 1,743,158 | 1,203,874 | | Profit for the Year | 1,575,164 | 1,104,727 | | Attributable to Owners of the Company | 1,268,506 | 939,616 | | Basic Earnings Per Share | 33.37 cents | 25.29 cents | Consolidated Statement of Financial Position As of December 31, 2018, the group's total assets were RMB 39.161 billion, a 14.2% increase from the end of the previous year, with non-current assets at RMB 32.743 billion, total liabilities at RMB 26.764 billion, a debt-to-asset ratio of 68.3%, and total equity at RMB 12.397 billion, of which equity attributable to owners of the parent company was RMB 10.036 billion Consolidated Statement of Financial Position (RMB Thousand) | Item (RMB Thousand) | December 31, 2018 | December 31, 2017 | | :--- | :--- | :--- | | Total Non-Current Assets | 32,742,655 | 28,755,306 | | Total Current Assets | 6,418,173 | 5,532,783 | | Total Assets | 39,160,828 | 34,288,089 | | Total Current Liabilities | 8,602,445 | 9,472,985 | | Total Non-Current Liabilities | 18,161,831 | 14,314,014 | | Total Liabilities | 26,764,276 | 23,786,999 | | Total Equity | 12,396,552 | 10,501,090 | Consolidated Statement of Cash Flows In 2018, the group's net cash flow from operating activities was RMB 3.156 billion, a 19.5% year-on-year increase, with net cash outflow from investing activities of RMB 3.967 billion, primarily for property, plant, and equipment acquisitions, and net cash inflow from financing activities of RMB 945 million, resulting in a year-end cash and cash equivalents balance of RMB 2.240 billion, an increase of RMB 135 million from the beginning of the year Consolidated Statement of Cash Flows (RMB Thousand) | Item (RMB Thousand) | 2018 | 2017 | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 3,156,076 | 2,641,796 | | Net Cash Flow Used in Investing Activities | (3,966,886) | (3,570,421) | | Net Cash Flow from Financing Activities | 945,465 | 1,562,639 | | Net Increase in Cash and Cash Equivalents | 134,655 | 634,014 | | Cash and Cash Equivalents at Year-End | 2,240,325 | 2,110,035 | Notes to the Financial Statements This section provides detailed notes on changes in accounting policies and disclosures, operating segment information, trade receivables and bills receivable, interest-bearing bank and other borrowings, related party transactions, and financial risk management objectives and policies Changes in Accounting Policies and Disclosures This year, the group first adopted new standards such as IFRS 9 "Financial Instruments" and IFRS 15 "Revenue from Contracts with Customers," with IFRS 9 impacting the classification, measurement, and impairment of financial instruments through the expected credit loss model, and IFRS 15 establishing a new five-step revenue recognition model, which did not significantly affect the timing and amount of revenue recognition for gas and electricity sales but primarily impacted presentation and disclosure, such as reclassifying "customer advances" to "contract liabilities" - First adoption of IFRS 9 "Financial Instruments," introducing the expected credit loss model and adjusting the classification and measurement of financial assets[244][248] - First adoption of IFRS 15 "Revenue from Contracts with Customers," with no significant impact on the timing and amount of revenue recognition, but reclassifying the original RMB 778 million of "customer advances" to "contract liabilities"[255][260] Operating Segment Information The group's business is divided into two operating segments: natural gas, and wind power and solar, with the natural gas segment generating RMB 6.551 billion in revenue and RMB 471 million in segment profit in 2018, while the wind power and solar segment generated RMB 3.422 billion in revenue and RMB 1.190 billion in segment profit, and the asset scale of the wind power and solar segment is significantly larger than that of the natural gas segment, with revenue from a single largest customer (wind power and solar segment) accounting for 22.3% of the group's total revenue during the reporting period Segment Revenue, Profit, and Assets (RMB Thousand) | Segment | Revenue (RMB Thousand) | Segment Profit (RMB Thousand) | Segment Assets (RMB Thousand) | | :--- | :--- | :--- | :--- | | Natural Gas | 6,550,854 | 471,312 | 6,335,983 | | Wind Power and Solar | 3,422,314 | 1,189,727 | 31,986,944 | - As of the end of 2018, revenue from the single largest customer in the wind power and solar segment was RMB 2.224 billion, accounting for 22.3% of the group's total revenue[370] Trade Receivables and Bills Receivable As of the end of 2018, net trade receivables and bills receivable increased to RMB 3.296 billion from RMB 2.747 billion in the previous year, with an impairment provision of RMB 526 million, and an aging analysis showing that approximately 72% of receivables were within one year, while RMB 491 million of bills receivable were classified as financial assets measured at fair value through other comprehensive income Trade Receivables and Bills Receivable (RMB Thousand) | Item (RMB Thousand) | December 31, 2018 | December 31, 2017 | | :--- | :--- | :--- | | Trade Receivables and Bills Receivable | 3,822,543 | 3,105,576 | | Less: Impairment | (526,476) | (358,992) | | Net Amount | 3,296,067 | 2,746,584 | Interest-Bearing Bank and Other Borrowings As of the end of 2018, the group's total interest-bearing bank and other borrowings amounted to RMB 21.327 billion, an increase of 12.7% from RMB 18.925 billion at the end of the previous year, with short-term borrowings (including current portion due within one year) at RMB 4.644 billion and long-term borrowings at RMB 16.683 billion, primarily used to support business expansion and project construction Interest-Bearing Borrowings by Classification (RMB Thousand) | Borrowing Classification (RMB Thousand) | December 31, 2018 | December 31, 2017 | | :--- | :--- | :--- | | Current Portion | 4,643,777 | 5,707,549 | | Non-Current Portion | 16,683,183 | 13,217,189 | | Total | 21,326,960 | 18,924,738 | Related Party Transactions The group engages in multiple related party transactions with its controlling stockholder Hebei Construction & Investment Group and its subsidiaries (such as fellow subsidiaries, joint ventures, and associates), including significant transactions like deposits and loans with the Group Finance Company, financial leasing with Huihai Leasing, office rent and guarantee fees paid to Hebei Construction & Investment Group, and cooperation on greenhouse gas emission reduction projects with Jiantou Guorong, all conducted in the ordinary course of business - Significant deposit and loan transactions with the Group Finance Company, with deposit balances of approximately RMB 1.596 billion and total loan balances of RMB 854 million as of the end of 2018[535][536] - Ongoing financial leasing transactions with associate Huihai Leasing, with total finance lease payables of RMB 1.236 billion as of the end of 2018[543][512] Financial Risk Management Objectives and Policies The group faces key financial risks including interest rate risk, foreign currency risk, credit risk, and liquidity risk, managing interest rate risk by monitoring fixed versus floating rate borrowing portfolios, with limited foreign currency exposure primarily from HKD cash, credit risk managed through customer credit verification and continuous monitoring, and liquidity risk addressed by maintaining sufficient bank credit lines and a reasonable debt maturity structure, with the net debt-to-equity ratio at 66% at the end of 2018, maintaining a stable level - The net debt-to-equity ratio (net debt / (capital + net debt)) decreased from 67% in 2017 to 66% in 2018, indicating a stable capital structure[592][593] - As of the end of 2018, the group had secured bank credit facilities of RMB 27.238 billion, of which RMB 11.556 billion was utilized, leaving ample unused credit lines to manage liquidity risk[587] Definitions This section defines specific terms and abbreviations used in the report, such as "CNG" (Compressed Natural Gas), "Controlled Installed Capacity," "The Group," and "Hebei Construction & Investment Group," to ensure accurate understanding of the report's content Definitions This chapter defines specific terms and abbreviations used throughout the report, such as "CNG" (Compressed Natural Gas), "Controlled Installed Capacity," "The Group," and "Hebei Construction & Investment Group," to ensure readers accurately understand the report's content Company Information This section provides essential company details, including legal name, registered office, Hong Kong principal place of business, website, stock code, legal representative, board and supervisory committee members, joint company secretaries, authorized representatives, independent auditor, legal counsel, principal bankers, and H-share registrar contact information Company Information This chapter provides the company's basic information, including its legal name, registered office address, Hong Kong principal place of business, website, stock code (00956), legal representative, list of Board and Supervisory Committee members, joint company secretaries, authorized representatives, independent auditor, legal counsel, principal banks, and detailed contact information for the H-share share registrar