中国能源建设(03996) - 2021 - 中期财报

Company Information This section provides fundamental company details, including corporate identity, contact information, stock listing, and governance structure - This chapter provides fundamental company information, including its corporate identity, contact details, stock listing (China Energy Engineering, stock code 3996), and governance structure with details on directors and supervisors[3] Financial Highlights This section outlines the company's key financial performance in H1 2021, including significant growth in operating revenue, gross profit, net profit, and earnings per share, alongside changes in asset and liability structure - In H1 2021, total operating revenue grew 34.04% to RMB 141.546 billion, gross profit increased 36.98%, and net profit attributable to equity holders surged 166.69% to RMB 2.451 billion, with basic earnings per share up 162.50%[5] Condensed Consolidated Income Statement Highlights (For the Six Months Ended June 30) | Indicator | 2021 (RMB Million) | 2020 (RMB Million) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Total Operating Revenue | 141,545.7 | 105,597.2 | 34.04% | | Gross Profit | 17,047.0 | 12,445.0 | 36.98% | | Profit Before Tax | 6,164.0 | 3,502.7 | 75.98% | | Profit for the Period | 4,520.3 | 2,238.4 | 101.95% | | Profit Attributable to Equity Holders of the Company | 2,450.9 | 919.0 | 166.69% | | Basic Earnings Per Share (RMB Cents) | 7.56 | 2.88 | 162.50% | Condensed Consolidated Statement of Financial Position Highlights | Indicator | June 30, 2021 (RMB Million) | December 31, 2020 (RMB Million) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 499,228.9 | 476,051.9 | 4.87% | | Total Liabilities | 351,476.8 | 338,123.0 | 3.95% | | Total Equity | 147,752.1 | 137,928.9 | 7.12% | Business Development Overview This section comprehensively reviews the company's business development in H1 2021, including the macroeconomic backdrop, operating performance of each business segment, and growth in new and uncompleted contracts Industry Development Overview In H1 2021, China's economy showed recovery, with key sectors like infrastructure, construction, and power consumption experiencing significant year-on-year growth, providing a favorable operating environment - China's macroeconomic performance in H1 2021 demonstrated restorative growth and accelerated recovery, with a rebound in growth rates for industries related to the company's main business[9] - Key industry data year-on-year changes: * Infrastructure investment (excluding power) increased by 7.8%[7] * Total construction industry output value grew 18.8%[7] * Total societal electricity consumption rose 16.21%[7] * New overseas contracted project value decreased 5.2%, while turnover along the 'Belt and Road' increased 1.8%[7] Business Review In H1 2021, the company achieved strong overall performance with new contracts up 58.2% and revenue up 34.04%, primarily driven by robust growth in the engineering construction segment Overall Operating Performance in H1 2021 | Indicator | Amount (RMB Billion) | Year-on-Year Growth | | :--- | :--- | :--- | | New Contracts Signed | 483.289 | 58.2% | | Operating Revenue | 141.546 | 34.04% | | Total Profit | 6.164 | 75.98% | Survey, Design and Consulting Business This segment's H1 2021 revenue grew 18.80% to RMB 5.701 billion due to design progress recovery, despite a slight 2.81% decrease in new contracts signed Key Operating Indicators for Survey, Design and Consulting Business (RMB Billion) | Indicator | H1 2021 | H1 2020 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 5.701 | 4.799 | 18.80% | | Gross Profit | 1.726 | 1.585 | 8.88% | | New Contracts Signed | 6.042 | 6.217 | -2.81% | - The company maintains a leading position in energy and power survey and design technology, with international advantages in ultra-supercritical units, third-generation nuclear power, and UHV transmission and transformation[11] Engineering Construction Business The core engineering construction segment saw new contracts surge 60.62% to RMB 470.385 billion and revenue grow 41.96% to RMB 115.021 billion in H1 2021, driven by post-pandemic project resumption Key Operating Indicators for Engineering Construction Business (RMB Billion) | Indicator | H1 2021 | H1 2020 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 115.021 | 81.022 | 41.96% | | Gross Profit | 8.648 | 5.943 | 45.52% | | New Contracts Signed | 470.385 | 292.851 | 60.62% | - The company demonstrates strong core competitiveness in power and large-scale infrastructure investment and construction, offering integrated engineering construction services with full value chain and lifecycle management[20] Industrial Manufacturing Business The industrial manufacturing segment, encompassing cement, civil explosives, and equipment, achieved 22.99% revenue growth to RMB 12.318 billion in H1 2021, with all sub-segments showing double-digit increases Key Operating Indicators for Industrial Manufacturing Business (RMB Billion) | Indicator | H1 2021 | H1 2020 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Segment Operating Revenue | 12.318 | 10.016 | 22.99% | | Of which: Cement Production | 4.476 | 3.584 | 24.89% | | Of which: Civil Explosives | 2.252 | 1.952 | 15.37% | | Of which: Equipment Manufacturing | 5.590 | 4.480 | 24.78% | | Segment Gross Profit | 3.040 | 2.605 | 16.72% | Clean Energy and Environmental Water Business This segment's H1 2021 revenue significantly decreased by 61.66% to RMB 2.518 billion due to the divestment of loss-making environmental businesses, yet gross profit surged 88.50% indicating improved profitability Key Operating Indicators for Clean Energy and Environmental Water Business (RMB Billion) | Indicator | H1 2021 | H1 2020 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Segment Operating Revenue | 2.518 | 6.568 | -61.66% | | Of which: Clean Energy | 0.844 | 0.599 | 40.90% | | Of which: Environmental Business | 1.054 | 5.190 | -79.69% | | Of which: Water Business | 0.620 | 0.779 | -20.41% | | Segment Gross Profit | 0.826 | 0.438 | 88.50% | - The substantial decrease in environmental business revenue resulted from the divestment of certain loss-making operations, which concurrently led to a significant improvement in the segment's overall gross profit[33] Investment and Other Businesses This segment, including real estate and highway operations, achieved robust 69.34% revenue growth to RMB 12.969 billion in H1 2021, with real estate and highway operations growing 62.28% and 99.79% respectively Key Operating Indicators for Investment and Other Businesses (RMB Billion) | Indicator | H1 2021 | H1 2020 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Segment Operating Revenue | 12.969 | 7.659 | 69.34% | | Of which: Real Estate Business | 5.417 | 3.338 | 62.28% | | Of which: Highway Operations | 0.935 | 0.468 | 99.79% | | Segment Gross Profit | 2.789 | 1.842 | 51.39% | Summary of Business Development By H1 2021, new contracts surged 58.2% to RMB 483.289 billion, with backlog increasing 19.08% to RMB 1,623.713 billion, indicating strong future performance and optimized business structure New Contracts Signed in H1 2021 (RMB Billion) | Category | H1 2021 | H1 2020 | Year-on-Year Growth Rate | | :--- | :--- | :--- | :--- | | Total | 483.289 | 305.491 | 58.20% | | Domestic | 340.749 | 208.124 | 63.72% | | International | 142.540 | 97.367 | 46.39% | | Power Engineering | 242.157 | 159.331 | 51.98% | | Non-Power Engineering | 241.132 | 146.160 | 64.98% | Uncompleted Contracts as of H1 2021 (RMB Billion) | Category | End of H1 2021 | End of H1 2020 | Year-on-Year Growth Rate | | :--- | :--- | :--- | :--- | | Total | 1,623.713 | 1,363.569 | 19.08% | | Engineering Construction | 1,584.526 | 1,319.242 | 20.11% | | Power Engineering | 952.186 | 860.357 | 10.67% | | Non-Power Engineering | 671.527 | 503.212 | 33.45% | Management Discussion and Analysis This section provides an in-depth analysis of the company's H1 2021 overall and segment operating performance, cash flow, debt status, pledged assets, contingent matters, risk management strategies, and future investment and business outlook Overall Operating Performance In H1 2021, operating revenue grew 34.04% driven by engineering construction and other segments, while gross profit increased 36.98% due to higher revenue and improved margins - Operating revenue increased 34.04% to RMB 141.546 billion, primarily driven by engineering construction, equipment manufacturing, and real estate businesses[54] - Gross profit increased 36.98% to RMB 17.047 billion, primarily due to higher engineering construction revenue, improved margins in certain businesses, and the turnaround of environmental operations[55] - Selling and administrative expenses increased 26.82% and 21.45% respectively, primarily due to the stable resumption of production and operational activities in 2021, leading to corresponding expenditure growth[56][57] Segment Operating Performance In H1 2021, engineering construction showed strong growth, while clean energy and environmental water revenue declined due to divestments, but its gross profit significantly improved Operating Revenue and Year-on-Year Change by Segment (RMB Million) | Segment | H1 2021 Revenue | Year-on-Year Change | | :--- | :--- | :--- | | Survey, Design and Consulting Services | 5,701.1 | 18.80% | | Engineering Construction | 115,020.8 | 41.96% | | Industrial Manufacturing | 12,318.2 | 22.99% | | Clean Energy and Environmental Water | 2,518.0 | -61.66% | | Investment and Other Businesses | 12,969.1 | 69.34% | - The decline in clean energy and environmental water revenue was primarily due to reduced environmental business, but gross profit increased 88.50% as cost reductions from divesting low-margin operations outpaced revenue decline[64] Cash Flow As of June 30, 2021, the company reported RMB 39.47 billion in cash and equivalents, with increased net cash outflows from operating and investing activities, partially offset by financing inflows Condensed Consolidated Cash Flow Statement Highlights (RMB Million) | Item | H1 2021 | H1 2020 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (11,010.7) | (9,343.2) | | Net Cash Used in Investing Activities | (9,780.8) | (7,805.6) | | Net Cash from Financing Activities | 10,421.2 | 12,283.2 | | Net Decrease in Cash and Cash Equivalents | (10,370.3) | (4,865.6) | Indebtedness As of June 30, 2021, total liabilities were RMB 351.477 billion, with a debt-to-asset ratio of 70.40%, and the company maintained substantial unused bank credit lines of RMB 547.542 billion - The asset-liability ratio stood at 70.40%, a 0.63 percentage point decrease from 71.03% at the end of 2020[74] Debt Structure (RMB Million) | Item | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Long-term Debt | 85,040.0 | 72,970.3 | | Short-term Debt | 35,731.6 | 44,188.5 | | Total | 120,771.6 | 117,158.8 | - The company has no significant overdue bank borrowings or breaches of debt financing obligations, holding RMB 40 billion in unused debt securities quotas and RMB 547.542 billion in unused bank credit lines[82] Pledged Assets, Contingent Matters and Contingent Liabilities As of June 30, 2021, RMB 66.359 billion in assets were pledged, with contingent liabilities totaling RMB 8.012 billion from guarantees, and ongoing legal proceedings involving a subsidiary - As of June 30, 2021, the company had a total of RMB 66.359 billion in pledged assets to secure bank credit facilities[84] - Total external guarantees amounted to RMB 8.012 billion, covering loan guarantees for related parties and third parties, and mortgage loan guarantees for property buyers[88] - Subsidiary Gezhouba Huanjia is involved in multiple legal proceedings with financial institutions, lenders, and suppliers, with some outcomes uncertain pending supervisory commission investigations[90][91][92] Risk Management The company faces key risks including macroeconomic volatility, international operations, QHSE, investment decisions, and project execution, addressed through enhanced analysis, strategic planning, and robust management systems - Major business risks include: * Macroeconomic risk: Impact of domestic and international economic changes on industry development[96] * International operation risk: Challenges from overseas epidemics, geopolitical issues, and capital shortages[97] * QHSE risk: Inherent safety production risks within the construction industry[99] * Investment risk: Difficulties in investment decision-making and management for new business areas[99] * Engineering project performance risk: Issues with resource allocation, project duration, and costs exacerbated by the pandemic[99] - The company mitigates and prevents various risks by strengthening analysis, optimizing strategic layout, reinforcing management systems, and enhancing refined management capabilities[96][97][99] Future Major Investment Plans Future investments will focus on core businesses aligned with 'carbon peak and neutrality' goals, including a significant A-share merger with Gezhouba Group Company Limited, approved by the CSRC in August 2021 - The company plans to absorb and merge its subsidiary Gezhouba Group Company Limited via an A-share issuance, a transaction approved by the China Securities Regulatory Commission[104][106] - Future investments will concentrate on core businesses, aligning with 'carbon peak and neutrality' goals, and enhancing integrated investment, construction, and operation capabilities in new infrastructure and urbanization[104] Business Outlook The company anticipates growth opportunities in domestic clean energy and infrastructure driven by national strategies, and a recovery in international markets, aiming for accelerated overall performance in H2 2021 - Domestic Market Outlook: * Power Industry: Rapid development in new energy and grid optimization, driven by 'carbon peak and neutrality' goals[107] * Non-Power Market: The '14th Five-Year Plan' will create market opportunities in new infrastructure, transportation, water conservancy, and ecological environmental protection[108][109] - International Market Outlook: Improving global economic prospects and continued infrastructure focus present opportunities; the company will optimize its international market strategy and advance 'Belt and Road' initiatives[111] Significant Matters This section discloses important corporate events, including changes in major shareholder interests, personnel adjustments to the Board and Supervisory Committee, and the acquisition and disposal of subsidiary equity during the reporting period Major Shareholders' Interests As of June 30, 2021, China Energy Engineering Group Co., Ltd. held approximately 62.58% of the company's issued share capital as the controlling shareholder Major Shareholder Holdings (As of June 30, 2021) | Shareholder Name | Share Class | Holding Percentage (% of Total Share Capital) | | :--- | :--- | :--- | | China Energy Engineering Group Co., Ltd. | Domestic Shares & H Shares | ~62.58% | | China Reform Holdings Corporation Ltd. | Domestic Shares & H Shares | ~8.87% | | Silk Road Fund Co., Ltd. | H Shares | 4.87% | Changes in Directors and Supervisors During the reporting period, the company's Board of Directors and Supervisory Committee underwent several personnel changes, with new appointments and resignations due to term expiry - On February 5, 2021, the company completed the re-election of its Board of Directors and Supervisory Committee, with several members resigning due to term expiry and new members elected[122] Acquisition and Disposal of Subsidiaries During the period, the company transferred equity in two subsidiaries, China Energy Engineering Fund Management Co., Ltd. and China Energy Engineering Group Financial Leasing Co., Ltd., to its controlling shareholder, losing control - In June 2021, the company signed agreements with its controlling shareholder to divest control of its fund and financial leasing companies, completing the remaining equity transfer for the latter in July[126] Condensed Consolidated Financial Statements This section presents the company's unaudited consolidated statement of profit or loss and other comprehensive income, consolidated statement of financial position, and condensed consolidated cash flow statement for the six months ended June 30, 2021, along with detailed notes to the financial report Consolidated Statement of Profit or Loss and Other Comprehensive Income This section presents the unaudited consolidated statement of profit or loss for H1 2021, showing RMB 141.546 billion in operating revenue and RMB 2.451 billion in profit attributable to equity holders Key Data from Consolidated Income Statement H1 2021 (RMB Thousand) | Indicator | Amount | | :--- | :--- | | Operating Revenue | 141,545,737 | | Gross Profit | 17,046,955 | | Profit Before Tax | 6,164,048 | | Profit for the Period | 4,520,304 | | Profit Attributable to Equity Holders of the Company | 2,450,926 | Consolidated Statement of Financial Position This section presents the unaudited consolidated statement of financial position as of June 30, 2021, with total assets of RMB 499.229 billion and total equity of RMB 147.752 billion Key Data from Consolidated Statement of Financial Position as of June 30, 2021 (RMB Thousand) | Indicator | Amount | | :--- | :--- | | Total Assets | 499,228,939 | | Total Liabilities | 351,476,846 | | Total Equity | 147,752,093 | Condensed Consolidated Cash Flow Statement This section presents the unaudited condensed consolidated cash flow statement for H1 2021, showing net cash outflows from operating and investing activities, and net cash inflows from financing activities Key Data from Cash Flow Statement H1 2021 (RMB Thousand) | Indicator | Amount | | :--- | :--- | | Net Cash Used in Operating Activities | (11,010,748) | | Net Cash Used in Investing Activities | (9,780,806) | | Net Cash from Financing Activities | 10,421,238 | | Net Decrease in Cash and Cash Equivalents | (10,370,316) | Notes to the Unaudited Interim Financial Report This section provides detailed notes to the unaudited interim financial report, covering accounting policies, segment information, financial instruments, related party transactions, contingent liabilities, and subsequent events - Note 3 details the revenue and performance of the five major business segments: survey, design and consulting, engineering construction, industrial manufacturing, clean energy and environmental water, and investment and other businesses[150] - Note 26 discloses multiple legal proceedings involving subsidiary Gezhouba Huanjia, with outcomes and potential financial impacts uncertain due to ongoing supervisory commission investigations[239][240][241] - Note 30 discloses subsequent events, including the approval by the China Securities Regulatory Commission on August 11, 2021, for the company's plan to absorb and merge Gezhouba Group Company Limited via a share swap[255] Glossary of Terms and Technical Terminology This section defines and explains specific terms and technical terminology used throughout the report, such as 'Company,' 'CEEC,' 'PPP,' and 'Belt and Road,' to enhance reader comprehension - This section defines and explains specific terms and technical terminology used throughout the report, such as 'Company,' 'China Energy Engineering Group,' 'PPP,' and 'Belt and Road,' to enhance reader comprehension[257][259][260]