嘉兴燃气(09908) - 2020 - 年度财报

Company Information This section provides fundamental details about the company Definitions This section defines key terms and abbreviations used throughout the report Financial Highlights 2020 Annual Financial Performance Overview In 2020, the company's total revenue decreased by 4.25% to RMB 1.274 billion, while gross profit increased by 13.44% to RMB 224 million, and profit attributable to shareholders grew by 6.44% to RMB 92.5 million, with a proposed final dividend of RMB 0.25 per share (tax inclusive) 2020 Annual Key Financial Indicators | Indicator | 2020 | 2019 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | RMB 1.2737 billion | RMB 1.3303 billion | -4.25% | | Gross Profit | RMB 223.6 million | RMB 197.1 million | +13.44% | | Profit Attributable to Company Shareholders | RMB 92.5 million | RMB 86.9 million | +6.44% | | Proposed Final Dividend | RMB 0.25 per share (tax inclusive) | - | - | Chairman's Report Business Review and Operating Results Despite the challenges of the COVID-19 pandemic in 2020, the Group's total gas sales increased by 4.34% to 385 million cubic meters, with gross profit margin rising to 17.55% and net profit attributable to shareholders growing by 6.44% to RMB 92.5 million - Total gas sales increased by 4.34% to 385 million cubic meters in 2020[19] - Optimized procurement and cost control led to a 2.73 percentage point increase in gross profit margin to 17.55%, driving a 6.44% growth in net profit attributable to shareholders to RMB 92.5 million[19] - The Board proposed a final dividend of RMB 0.25 per share (tax inclusive) to share operating results[19] Corporate Social Responsibility In response to the COVID-19 pandemic in early 2020, the Group actively fulfilled its social responsibilities by ensuring employee protection, maintaining gas supply, implementing relief policies, and promoting online services - Ensured natural gas supply for local residents and industrial users during the pandemic, maintaining continuous operations[20] - Implemented government-mandated customer relief measures such as "no supply cut-off for overdue payments" and early execution of off-peak prices[22] - Launched "contactless business services" by promoting online service platforms via web and mobile apps[20] Future Outlook The Group plans to capitalize on China's "14th Five-Year Plan" and the high-quality green development strategy in the Yangtze River Delta region, with the Dushan Port LNG receiving terminal project enhancing its "gas source plus terminal" industrial chain competitiveness - The Dushan Port LNG receiving terminal project's tank farm is largely complete, and the pier construction is approximately 50% finished, which will significantly enhance the Group's core industrial chain competitiveness[23] - The Group will leverage its geographical advantages to actively explore business growth and comprehensive clean energy development, aligning with the national strategy for high-quality green development in the Yangtze River Delta region[23] Management Discussion and Analysis Market and Business Review In 2020, China's natural gas consumption grew by 7.2%, with the Group's gas sales increasing by 4.34% to 385 million cubic meters, despite a slight revenue decrease due to pandemic-related price reductions - In 2020, China's natural gas consumption reached 328.78 billion cubic meters, a year-on-year increase of 7.2%[25] - The Group's total gas sales increased by 4.34% to 385 million cubic meters for the year[27] - Due to price reduction measures during the pandemic, 2020 annual revenue decreased by 4.25% to RMB 1.2737 billion[29] - As of the end of 2020, the Group operated a pipeline network of approximately 943 kilometers, serving about 380,000 households, with approximately 31,000 new households added during the year[29] Outlook Driven by "dual carbon" goals, natural gas will play a more prominent role as a clean energy source, with Zhejiang Province planning to increase natural gas consumption to about 13% by 2025, creating growth opportunities for the Group - Zhejiang Province plans to increase the share of natural gas consumption in its primary energy mix to approximately 13% by 2025, presenting growth opportunities for the company[33] - The company will accelerate the construction of the Dushan Port receiving terminal project, leveraging its core "gas source plus terminal" competitive advantage to expand terminal customer gas consumption scale[34] Financial Overview In 2020, the Group's revenue decreased by 4.25% to RMB 1.274 billion due to lower average gas sales prices, but gross profit increased by 13.44% to RMB 224 million, and profit attributable to owners of the parent company grew by 6.44% to RMB 92.5 million, with significant improvements in liquidity and leverage ratios 2020 Annual Financial Performance Summary | Indicator | 2020 | 2019 | Reason for Change | | :--- | :--- | :--- | :--- | | Revenue | RMB 1.2737 billion | RMB 1.3303 billion | -4.25%, decrease in average natural gas selling price | | Gross Profit | RMB 223.6 million | RMB 197.1 million | +13.44%, increase in natural gas sales gross profit and larger scale of construction services | | Finance Costs | RMB 11.7 million | RMB 19.3 million | -39.38%, reduction in interest expense due to decrease in short-term borrowings | | Profit Attributable to Owners of the Parent Company | RMB 92.5 million | RMB 86.9 million | +6.44%, diversified procurement and strengthened in-house construction capabilities reduced costs | 2020 Year-End Financial Position Summary | Indicator | December 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Current Ratio | 1.49 | 0.38 | | Gearing Ratio | 56.01% | 73.66% | | Capital Gearing Ratio | 15.18% | 54.20% | | Cash and Bank Balances | RMB 344.3 million | RMB 63.1 million | Human Resources and Others As of the end of 2020, the Group had 362 employees with total employee costs of approximately RMB 43.1 million, and provided a loan guarantee of RMB 506.3 million to its joint venture, Hangjiaxin, with no significant investments, acquisitions, or disposals during the year - As of December 31, 2020, the Group employed 362 staff, with total employee costs of approximately RMB 43.1 million[49] - The Group provided a loan guarantee of RMB 506.3 million to its joint venture, Hangjiaxin[46] Use of Proceeds from Global Offering The company listed on the Stock Exchange on July 16, 2020, raising net proceeds of approximately HKD 334 million (approximately RMB 302 million) from its global offering, with RMB 69.83 million utilized by year-end for capital injection into the Hangjiaxin project, pipeline network upgrades, and general working capital Net Proceeds from Global Offering as of December 31, 2020 | Intended Use of Net Proceeds | Allocated Amount (RMB '000) | Utilized (RMB '000) | Unutilized (RMB '000) | | :--- | :--- | :--- | :--- | | Payment of registered capital and provision of shareholder loans to Hangjiaxin | 241,697 | 51,550 | 190,147 | | Upgrading of Jiaxing's pipeline network and operating facilities | 30,212 | 8,982 | 21,230 | | Working capital and general corporate purposes | 30,212 | 9,295 | 20,917 | | Total | 302,121 | 69,827 | 232,294 | Biographies of Directors, Supervisors, and Senior Management This section provides biographical information for the company's directors, supervisors, and senior management Report of the Board of Directors Principal Business and Dividends The Group primarily engages in the sale of piped natural gas, LNG, and LPG in Jiaxing, along with related construction and installation services, and proposed a final dividend of RMB 0.25 per share (tax inclusive) for 2020, totaling RMB 34.46 million - The Group's principal business involves the sale of gas and provision of construction and installation services in Jiaxing[85] - The Board recommended a final dividend of RMB 0.25 per share (tax inclusive) for 2020, totaling RMB 34.46 million[90] Share Capital and Major Shareholders As of the end of 2020, the company's total share capital was 137,844,500 shares, comprising 100 million domestic shares and 37,844,500 H shares, with Jiaxing City Urban Investment Development Group Co., Ltd. and parties controlled by Chairman Sun Lianqing as major shareholders - As of December 31, 2020, the company's total share capital was 137,844,500 shares, divided into 100 million domestic shares and 37,844,500 H shares[97] Major Shareholder Holdings (as of December 31, 2020) | Shareholder Name | Capacity | Number of Shares (Domestic Shares) | Approximate Percentage of Total Share Capital | | :--- | :--- | :--- | :--- | | Urban Development | Beneficial Owner | 32,757,502 | 23.76% | | Sun Lianqing | Interest in Controlled Corporations (Concert Parties) | 31,720,806 | 23.01% | | Zhuji Yujia | Beneficial Owner | 11,894,374 | 8.63% | Connected Transactions During the reporting period, the Group engaged in several continuing connected transactions, including leasing pipeline networks and LNG stations from Jiaxing Pipeline Network Company and purchasing piped natural gas (approximately RMB 584 million annually), leasing properties to Qingyuan Hotel (approximately RMB 5.1 million annually), and purchasing construction materials from Zhuji Jinfeng (approximately RMB 5.6 million annually), all confirmed as fair and reasonable - Signed a master supply agreement with Jiaxing Pipeline Network Company for the purchase of piped natural gas, with total annual fees of approximately RMB 584 million as of the end of 2020[139] - Leased commercial properties to related party Qingyuan Hotel, with total annual rental income of approximately RMB 5.1 million as of the end of 2020[131] - Purchased construction materials from related party Zhuji Jinfeng, with total annual purchase price of approximately RMB 5.6 million as of the end of 2020[136] Major Customers and Suppliers As of the end of 2020, the Group exhibited high concentration among its customers and suppliers, with the top five customers accounting for 20.81% of total revenue and the top five suppliers for 68.79% of total purchases - The top five customers accounted for approximately 20.81% of total revenue, with the largest customer accounting for 7.36%[143] - The top five suppliers accounted for approximately 68.79% of total purchases, with the largest supplier accounting for 53.31%, indicating high supplier concentration[143] Report of the Supervisory Committee Supervisory Committee's Annual Oversight Opinion The Supervisory Committee affirmed that in 2020, the company operated lawfully with proper decision-making procedures, diligent directors and senior management, no actions harming shareholder interests, and true and complete financial statements, with IPO proceeds used in compliance - The company's operational decision-making procedures were lawful, and directors and senior management were loyal, diligent, and dutiful, with no violations found[159] - The financial statements objectively, truly, and reasonably reflected the company's operations, management, and financial position[160] - The use of proceeds from the initial public offering strictly adhered to regulations and disclosed purposes, with no instances of non-compliant use[161] Corporate Governance Report Corporate Governance Practices and the Board of Directors The company is committed to high corporate governance standards, complying with all Code Provisions since listing, with the only deviation being the combined roles of Chairman and CEO held by Mr. Sun Lianqing, a structure deemed conducive to swift decision-making by the Board, which comprises eight directors including three independent non-executive directors - The company has complied with all applicable Code Provisions of the Corporate Governance Code since its listing, with one deviation: the roles of Chairman and Chief Executive Officer are not separated, both held by Mr. Sun Lianqing[165][172] - The Board of Directors comprises eight directors, including two executive directors, three non-executive directors, and three independent non-executive directors, meeting the Listing Rules' requirements for the number and proportion of independent non-executive directors[168][173] Board Committees The Board has three committees: Audit, Remuneration, and Nomination; the Audit Committee, composed of three independent non-executive directors, reviews financial information and internal controls; the Remuneration Committee, comprising one non-executive and two independent non-executive directors, reviews remuneration policies; and the Nomination Committee, consisting of one executive and two independent non-executive directors, reviews Board composition and director nominations - The Audit Committee consists of three independent non-executive directors, with Mr. Zheng Xueqi as Chairman[184] - The Remuneration Committee comprises one non-executive director and two independent non-executive directors, with Mr. Yu Youda as Chairman[186] - The Nomination Committee consists of one executive director and two independent non-executive directors, with Mr. Sun Lianqing as Chairman[189] Risk Management and Internal Control The Board is responsible for establishing and overseeing the effectiveness of risk management and internal control systems, which were reviewed and deemed effective and adequate for 2020, with an internal control consultant engaged for further enhancement - The Board is responsible for overseeing the effectiveness of risk management and internal control systems, which were reviewed and deemed effective and adequate for 2020[202] - The company has engaged an internal control consultant to review the Group's internal control systems for further improvement[205] Shareholder Rights and Communication The company has established procedures to protect shareholder rights, allowing shareholders holding 10% or more of voting shares to request an extraordinary general meeting, and those holding 3% or more to propose resolutions 10 days prior to a general meeting, while ensuring convenient, equal, and timely access to company information through a shareholder communication policy - Shareholders holding 10% or more of the company's voting shares, individually or in aggregate, have the right to request the Board to convene an extraordinary general meeting[214] - Shareholders holding 3% or more of the company's voting shares, individually or in aggregate, have the right to submit ad hoc proposals in writing 10 days prior to a general meeting[215] Independent Auditor's Report Auditor's Opinion Ernst & Young issued an unmodified opinion on the company's consolidated financial statements for the year ended December 31, 2020, affirming they present a true and fair view in accordance with IFRS and Hong Kong Companies Ordinance, with key audit matters including revenue recognition for piped natural gas sales and construction services - The auditor issued an unmodified opinion, stating that the consolidated financial statements present a true and fair view of the Group's financial position and performance[225] - Key audit matters include revenue recognition for: 1) piped natural gas sales, due to numerous customers and estimates for unmetered portions at year-end; and 2) construction services, involving significant management judgment on performance progress[227][229][231] Consolidated Financial Statements Consolidated Statement of Profit or Loss and Other Comprehensive Income This statement presents the company's revenue, costs, expenses, and profit for the 2020 fiscal year, with total revenue of RMB 1.274 billion, profit for the year of RMB 95.48 million, and profit attributable to owners of the parent company of RMB 92.52 million 2020 Annual Consolidated Statement of Profit or Loss Summary | Item (RMB '000) | 2020 | 2019 | | :--- | :--- | :--- | | Revenue | 1,273,713 | 1,330,332 | | Gross Profit | 223,572 | 197,065 | | Profit Before Tax | 125,462 | 117,342 | | Profit for the Year | 95,482 | 89,366 | | Profit Attributable to Owners of the Parent Company | 92,520 | 86,898 | | Basic Earnings Per Share (RMB) | 0.79 | 0.87 | Consolidated Statement of Financial Position This statement reflects the company's assets, liabilities, and equity as of December 31, 2020, with total assets of RMB 1.715 billion, total liabilities of RMB 961 million, and total equity of RMB 754 million, indicating a significant improvement in the company's asset-liability structure compared to the previous year 2020 Year-End Consolidated Statement of Financial Position Summary | Item (RMB '000) | December 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Total Non-Current Assets | 1,224,426 | 1,186,847 | | Total Current Assets | 490,593 | 167,922 | | Total Assets | 1,715,019 | 1,354,769 | | Total Current Liabilities | 329,297 | 443,675 | | Total Non-Current Liabilities | 631,289 | 554,265 | | Total Liabilities | 960,586 | 997,940 | | Total Equity | 754,433 | 356,829 | Consolidated Statement of Cash Flows This statement details the company's cash inflows and outflows for the 2020 fiscal year, showing net cash inflow from operating activities of RMB 178 million, net cash outflow from investing activities of RMB 94.05 million, and net cash inflow from financing activities of RMB 195 million due to the IPO, resulting in a significant increase in cash and cash equivalents to RMB 342 million at year-end 2020 Annual Consolidated Statement of Cash Flows Summary | Item (RMB '000) | 2020 | 2019 | | :--- | :--- | :--- | | Net Cash Flows from Operating Activities | 177,981 | 125,011 | | Net Cash Flows Used in Investing Activities | (94,053) | (16,879) | | Net Cash Flows from/(Used in) Financing Activities | 195,243 | (131,228) | | Net Increase/(Decrease) in Cash and Cash Equivalents | 279,171 | (23,096) | | Cash and Cash Equivalents at Year-End | 342,317 | 63,146 | Notes to the Financial Statements The notes provide detailed explanations of accounting policies, key accounting estimates, and supplementary disclosures for various financial statement items, including revenue breakdown, asset and liability details, related party transactions, and financial risk management Note 5: Revenue In 2020, the Group's total revenue was RMB 1.274 billion, with revenue from contracts with customers totaling RMB 1.267 billion, primarily from piped natural gas sales (RMB 877 million), LNG sales (RMB 134 million), and construction services (RMB 109 million), though piped natural gas sales' proportion of revenue decreased Classification of Revenue from Contracts with Customers for 2020 | Revenue Source | 2020 (RMB '000) | 2019 (RMB '000) | | :--- | :--- | :--- | | Sales of piped natural gas | 877,238 | 1,081,889 | | Sales of liquefied natural gas | 133,719 | 11,862 | | Sales of liquefied petroleum gas | 54,267 | 75,554 | | Provision of construction services | 108,909 | 63,215 | | Provision of installation and management services | 49,045 | 52,931 | | Others | 42,400 | 37,354 | | Total | 1,266,778 | 1,322,805 | Note 30: Interest-bearing Bank Borrowings As of the end of 2020, the Group's total interest-bearing bank borrowings amounted to RMB 114.5 million, all non-current secured loans, a significant reduction from RMB 193.4 million in 2019, collateralized by investment properties, property, plant and equipment, and other assets - As of December 31, 2020, total interest-bearing bank borrowings amounted to RMB 114.5 million, all of which were non-current (long-term) borrowings[457][458] - The borrowings were secured by investment properties, property, plant and equipment, and pledged deposits with a total carrying amount of approximately RMB 148.6 million[459] Note 36: Related Party Transactions The Group engaged in transactions with several related parties, most notably purchasing natural gas from Jiaxing Pipeline Network Company for RMB 584 million in 2020, incurring lease liability interest expenses of RMB 9.26 million for gas pipeline leases, and providing a bank loan guarantee of RMB 506 million for its joint venture, Hangjiaxin 2020 Major Related Party Transactions | Related Party | Transaction Content | Amount (RMB '000) | | :--- | :--- | :--- | | Jiaxing Pipeline Network Company | Purchase of natural gas | 583,825 | | Zhuji Jinfeng | Purchase of construction materials | 5,618 | | Qingyuan Hotel | Rental income | 5,108 | | Gas/Fueling Stations | Transportation income | 2,341 | - Provided a bank loan guarantee of RMB 506 million for the joint venture Hangjiaxin[475] Note 39: Financial Risk Management Objectives and Policies The Group faces primary financial risks including interest rate, foreign exchange, credit, and liquidity risks, with IPO proceeds introducing Hong Kong Dollar exchange rate risk, and liquidity managed through cash flow monitoring; capital management saw a significant reduction in the capital gearing ratio from 54.20% in 2019 to 15.18% in 2020, indicating lower financial leverage - The Group's primary financial risks include interest rate, foreign exchange, credit, and liquidity risks[498] - The capital gearing ratio significantly decreased from 54.20% at the end of 2019 to 15.18% at the end of 2020[520] Four-Year Financial Summary 2017-2020 Financial Trends Over the past four years, the Group's revenue grew from RMB 884 million in 2017 to RMB 1.274 billion in 2020, peaking in 2019, while gross profit and profit attributable to company shareholders showed steady growth, with the latter increasing from RMB 62.3 million in 2017 to RMB 92.52 million in 2020, and total assets and shareholder equity significantly increasing in 2020 due to IPO financing 2017-2020 Key Financial Data (RMB '000) | Indicator | 2017 | 2018 | 2019 | 2020 | | :--- | :--- | :--- | :--- | :--- | | Revenue | 883,604 | 1,258,782 | 1,330,332 | 1,273,713 | | Gross Profit | 151,621 | 170,257 | 197,065 | 223,572 | | Profit Attributable to Company Shareholders | 62,299 | 70,342 | 86,898 | 92,520 | | Non-Current Assets | 1,175,452 | 1,218,516 | 1,186,847 | 1,224,426 | | Current Assets | 134,675 | 162,258 | 167,922 | 490,593 | | Equity Attributable to Company Shareholders | 253,778 | 324,120 | 341,018 | 735,660 |