山高新能源(01250) - 2020 - 中期财报

Chairman's Statement Financial Performance In H1 2020, revenue fell 33% to HKD 2.29 billion, and profit decreased 41% to HKD 407 million due to lower construction income and higher finance costs | Metric | H1 2020 (HKD million) | H1 2019 (HKD million) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | 2,285.0 | 3,401.7 | -33% | | Gross Profit | 1,251.1 | 1,622.6 | -23% | | Profit for the Period | 406.7 | 694.6 | -41% | | Profit Attributable to Equity Holders | 334.5 | 590.2 | -43% | - The decrease in profit was mainly due to: (i) a reduction in revenue from construction services; and (ii) an increase in finance costs resulting from a higher average total of corporate bonds, bank and other borrowings[15] Business Review The Group advanced its solar, wind, and clean heating businesses, secured strategic investments, and improved cash flow through asset sales | Business Segment | Operating Scale (as of June 30, 2020) | H1 2020 Power Generation/Sales | Y-o-Y Growth | | :--- | :--- | :--- | :--- | | Centralized Solar | 2,143 MW cumulative installed capacity | 1.671 billion kWh (consolidated) | 5% | | Distributed Solar | Over 600 MW total installed capacity | | | | Wind Power | 225 MW grid-connected (over 1,400 MW total scale) | 298 million kWh | 43% | | Clean Heating | Approx. 27.4 million sq.m. operational area | - | - | - The Group's weighted average utilization of solar power stations was 674 hours, higher than the national average of 595 hours; the weighted average utilization of wind farms was 1,541 hours, exceeding the national average of 1,123 hours, indicating high operational efficiency[16] - The Group recovered over RMB 500 million in cash flow by selling two solar projects in Jiangsu Province to reduce debt and strengthen operating cash flow, while also securing RMB 400 million in subsequent strategic investments from Ping An and CICC[18] Future Outlook The Group will adhere to its clean energy mission by strengthening risk management and focusing on cost reduction and efficiency improvements - The Group will continue to advance the energy production and consumption revolution, building a clean, low-carbon, safe, and efficient energy system to seek new opportunities amid crises and changing situations[20] Management Discussion and Analysis Business Review In H1 2020, the Group focused on high-margin businesses, resulting in stable power sales revenue but a 95% drop in construction services income Power Sales and Consignment Operation Total revenue from power sales and consignment operations remained stable at HKD 1.71 billion, with total electricity sales volume up 9% | Business Segment | H1 2020 Revenue (HKD million) | H1 2019 Revenue (HKD million) | Change | | :--- | :--- | :--- | :--- | | Centralized Solar Power Sales | 1,234.2 | 1,277.7 | -3.4% | | Distributed Solar Power Sales | 217.5 | 200.4 | +8.5% | | Wind Power Sales | 149.7 | 111.5 | +34.3% | | Consignment Operation Services | 110.5 | 133.8 | -17.4% | - As of June 30, 2020, the total grid-connected capacity of centralized solar power stations was 2,143 MW, distributed solar was over 600 MW, and wind power was 225 MW[27][34][38] - The weighted average utilization of the Group's solar power stations was 674 hours, higher than the national average of 595 hours; wind farms' utilization was 1,541 hours, exceeding the national average of 1,123 hours[33][42] Engineering, Procurement & Construction (EPC) and Technical Consulting Services Due to a strategic shift, revenue from external EPC services plummeted 95% to HKD 60.9 million, now comprising only 3% of total revenue | Service Type | H1 2020 Revenue (HKD million) | H1 2019 Revenue (HKD million) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Engineering, Procurement & Construction Services | 60.9 | 1,106.4 | -95% | | Technical Consulting Services | 28.7 | 72.6 | -60% | Provision of Clean Heating Services The clean heating business remained stable with revenue of HKD 464 million and an operational heating area of 27.4 million square meters - As of June 30, 2020, the Group held and/or managed 17 operational clean heating projects in provinces including Henan, Hebei, and Shanxi, with a total heating area of approximately 27.4 million square meters[47] Other Clean Energy Businesses The Group is actively exploring new clean energy opportunities, including hydropower as a new strategic business and energy storage - Hydropower is positioned as a new strategic business to optimize the Group's clean energy asset portfolio and contribute stable income[49] - The Group views energy storage as a key technology for advancing renewable energy substitution and building the energy internet, and will continue its technological development[50] Financial Performance H1 2020 revenue fell 33% to HKD 2.29 billion, but the gross margin rose to 54.8% due to a higher mix of power sales, while the net gearing ratio was 69% Revenue and Gross Profit Margin Revenue decreased 33% to HKD 2.29 billion, while the gross margin increased from 47.7% to 54.8% due to a shift in business mix | Business Segment | H1 2020 Gross Margin | H1 2019 Gross Margin | | :--- | :--- | :--- | | Solar Power Business | 66.3% | 68.3% | | Wind Power Business | 71.0% | 61.6% | | Construction Services | 17.2% | 20.3% | | Provision of Clean Heating Services | 12.3% | 30.0% | | Total | 54.8% | 47.7% | Finance Costs Finance costs increased by HKD 93.6 million to HKD 678 million, primarily due to a higher average balance of borrowings and bonds - Finance costs for H1 2020 were approximately HKD 678 million, an increase from HKD 584 million in the same period last year[56] Contract Assets Contract assets stood at HKD 5.85 billion, mainly comprising HKD 4.73 billion in renewable energy subsidy receivables - Contract assets consist primarily of two components: (i) RMB 4.73 billion in receivables for renewable energy subsidies; and (ii) RMB 1.15 billion in receivables for EPC services[64] Capital Expenditure Total capital expenditure for the period was HKD 1.75 billion, a slight decrease from HKD 1.89 billion in the prior year period | Capital Expenditure Item | H1 2020 (HKD million) | H1 2019 (HKD million) | | :--- | :--- | :--- | | Development of clean energy projects and other property, plant and equipment | 1,599.6 | 1,452.2 | | Investment in and acquisition of interests in subsidiaries, joint ventures and associates | 151.3 | 412.5 | | Total | 1,753.5 | 1,891.3 | Liquidity and Financial Resources The Group maintained a net gearing ratio of 69% and enhanced its capital structure by issuing RMB 900 million in bonds and securing RMB 400 million in investments - The net gearing ratio (net debt / (net debt + total equity)) was 69%, a slight increase from 68% at the end of 2019[79] - On April 29, 2020, the Company issued the second tranche of corporate bonds with a principal amount of RMB 900 million and an annual interest rate of 5.50%[77] - The Group's subsidiary, Tianjin Beiqing, received a total of RMB 400 million in new capital injection from the second batch of investors introduced by Ping An[78] Condensed Consolidated Financial Statements Condensed Consolidated Statement of Profit or Loss For the six months ended June 30, 2020, revenue was HKD 2.285 billion, gross profit was HKD 1.251 billion, and profit for the period was HKD 407 million | Metric (HKD million) | H1 2020 | H1 2019 | | :--- | :--- | :--- | | Revenue | 2,285.0 | 3,401.7 | | Gross Profit | 1,251.1 | 1,622.6 | | Profit Before Tax | 470.2 | 842.7 | | Profit for the Period | 406.7 | 694.6 | | Profit Attributable to Equity Holders of the Company | 334.5 | 590.2 | Condensed Consolidated Statement of Financial Position As of June 30, 2020, the Group had total assets of HKD 51.58 billion, total liabilities of HKD 40.66 billion, and total equity of HKD 10.92 billion | Metric (HKD million) | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Total Non-current Assets | 34,017.5 | 33,771.4 | | Total Current Assets | 17,562.6 | 18,420.9 | | Total Assets | 51,580.1 | 52,192.3 | | Total Current Liabilities | 17,141.4 | 16,814.4 | | Total Non-current Liabilities | 23,518.4 | 24,372.1 | | Total Liabilities | 40,659.8 | 41,186.5 | | Total Equity | 10,920.3 | 11,005.8 | Condensed Consolidated Statement of Cash Flows In H1 2020, net cash from operations was HKD 1.11 billion, while net cash used in investing and financing was HKD 1.76 billion and HKD 187 million, respectively | Cash Flow (HKD million) | H1 2020 | H1 2019 | | :--- | :--- | :--- | | Net cash from operating activities | 1,113.7 | 1,196.3 | | Net cash used in investing activities | (1,762.9) | (3,057.1) | | Net cash (used in)/from financing activities | (187.2) | 3,419.9 | | Net decrease/increase in cash and cash equivalents | (836.3) | 1,559.0 | Notes to the Condensed Consolidated Financial Statements Note 2: Operating Segment Information The Group's business is divided into construction-related and clean energy operations, with the latter contributing the vast majority of revenue and profit | H1 2020 (HKD million) | Construction-related Business | Operation of Clean Energy Projects | Total | | :--- | :--- | :--- | :--- | | External Revenue | 109.5 | 2,175.5 | 2,285.0 | | Segment Results | 35.1 | 812.9 | 848.0 | Note 11: Trade and Bills Receivables Total trade and bills receivables were HKD 3.92 billion, including HKD 730 million in listed subsidy receivables - Total trade and bills receivables amounted to HKD 3.92 billion, which included HKD 730 million in receivables for feed-in tariff subsidies[128] Note 15 & 16: Interest-bearing Borrowings and Corporate Bonds As of June 30, 2020, interest-bearing borrowings totaled HKD 12.89 billion, supplemented by HKD 1.54 billion in outstanding corporate bonds - Total bank and other borrowings amounted to HKD 12.89 billion, of which HKD 9.85 billion were unsecured[137] - On April 29, 2020, the Company issued unsecured corporate bonds with a principal amount of RMB 900 million and an interest rate of 5.50%, maturing in 2023[139] Note 24: Events After the Reporting Period Post-reporting period, the Group's subsidiary secured RMB 400 million in new investment and provided a RMB 483 million finance lease guarantee - On July 30, 2020, the Group's subsidiary Tianjin Beiqing entered into a capital increase agreement with a second batch of investors, introducing RMB 400 million in capital, which was completed on September 11[153] - On August 17, 2020, Tianjin Beiqing provided a finance lease guarantee of up to RMB 483 million for Yingshang Ju'an Solar Power Co, Ltd[153] Disclosure of Interests Interests of Substantial Shareholders As of June 30, 2020, substantial shareholders included BEWG (31.88%), CITIC Private Equity related entities (23.91%), and Tus-Holdings (6.37%) | Substantial Shareholder | Shareholding Percentage | Note | | :--- | :--- | :--- | | Beijing Enterprises Holdings Limited (and its associates) | 31.88% | Held indirectly through Beijing Enterprises Water Group | | CITIC Securities Company Limited (and its associates) | 23.91% | Held through entities like CITIC Private Equity Funds | | Tsinghua University (and its associates) | 6.37% | Held indirectly through Tus-Holdings | Share Option Scheme As of June 30, 2020, 1.03 billion outstanding share options were held, representing approximately 1.62% of issued shares - As at June 30, 2020, there were 1,030,000,000 valid and outstanding share options[173] - All outstanding share options were granted on September 18, 2017, with an exercise price of HKD 0.199 and vest in five tranches[182] Specific Performance of the Controlling Shareholder Several financing agreements contain specific performance clauses tied to the shareholding and control of the controlling shareholders - Multiple financing agreements require Beijing Enterprises Water Group to maintain a beneficial interest of not less than 25% or 27% in the Company and to remain the single largest shareholder[189] - The agreements also have corresponding requirements on the shareholding and control of Beijing Enterprises Holdings in BEWG, and of BE Group in Beijing Enterprises Holdings[189] Corporate Governance Corporate Governance Compliance The Board confirmed that the Company complied with all applicable code provisions of the Corporate Governance Code during the reporting period - The Company confirmed its compliance with all applicable code provisions of the Corporate Governance Code during the reporting period[192] - The Audit Committee, comprising three independent non-executive Directors, has reviewed this interim result and considers its preparation appropriate and disclosure adequate[194]