华电国际(600027) - 2020 Q4 - 年度财报

Company Profile and Key Financial Indicators Company Information Huadian Power International Corporation Limited (HDPI) is a comprehensive energy company dual-listed in Shanghai and Hong Kong, with its main office in Beijing - The company is dual-listed on the Shanghai Stock Exchange (A-share code: 600027) and the Hong Kong Stock Exchange (H-share code: 01071)[12] Key Accounting Data and Financial Indicators In 2020, operating revenue decreased by 3.11% to RMB 90.744 billion, while net profit attributable to shareholders significantly increased by 22.68% to RMB 4.179 billion Key Accounting Data | Major Accounting Data | 2020 (RMB thousand) | 2019 (RMB thousand) | Year-on-year change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 90,744,016 | 93,654,431 | -3.11% | | Net Profit Attributable to Shareholders | 4,179,447 | 3,406,920 | 22.68% | | Net Cash Flow from Operating Activities | 25,248,152 | 21,376,881 | 18.11% | | Total Assets | 234,611,122 | 229,875,595 | 2.06% | Key Financial Indicators | Major Financial Indicators | 2020 | 2019 | Year-on-year change (%) | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (yuan/share) | 0.33 | 0.29 | 13.79% | | Weighted Average Return on Net Assets (%) | 7.03% | 6.46% | Increased by 0.57 percentage points | Differences in Accounting Data Under Domestic and International Accounting Standards In 2020, the company's net profit and net assets differed under Chinese and International Accounting Standards, with IFRS net profit at RMB 4.167 billion and net assets at RMB 73.145 billion after adjustments Accounting Data Differences | Item | Net Profit (RMB thousand) | Net Assets (RMB thousand) | | :--- | :--- | :--- | | Under Chinese Accounting Standards | 4,179,447 | 72,088,981 | | Adjustment for business combinations under common control | -249,191 | 2,063,003 | | Adjustment for government grants | 33,592 | -286,801 | | Adjustment for maintenance and safety production funds | 61,603 | 78,320 | | Under International Accounting Standards | 4,166,756 | 73,145,361 | Quarterly Key Financial Data Q4 2020 saw the highest operating revenue at RMB 26.928 billion but the lowest net profit attributable to parent company shareholders at RMB 547 million Quarterly Financial Data | Financial Indicators (RMB thousand) | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 22,116,437 | 19,415,049 | 22,284,300 | 26,928,230 | | Net Profit Attributable to Shareholders | 1,189,361 | 1,196,627 | 1,246,097 | 547,362 | Non-Recurring Gains and Losses Items and Amounts In 2020, non-recurring gains and losses totaled RMB 508 million, primarily from government grants and other non-operating income/expenses, a significant shift from a 2019 loss Non-Recurring Gains and Losses | Non-Recurring Gains and Losses Items (RMB thousand) | 2020 Amount | 2019 Amount | | :--- | :--- | :--- | | Gains or losses from disposal of non-current assets | 81,716 | -54,072 | | Government grants recognized in current profit or loss | 267,320 | 326,627 | | Other non-operating income and expenses | 237,275 | 15,948 | | Total | 508,181 | -30,989 | Company Business Overview Principal Business, Business Model, and Industry Conditions The company is a large integrated energy company in China, primarily engaged in power plant construction and operation across 14 provinces, with 74% coal-fired and 26% clean energy capacity Controlling Installed Capacity by Power Type | Power Type | Controlling Installed Capacity (MW) | Proportion | | :--- | :--- | :--- | | Coal-fired generating units | 43,160.0 | ~73.8% | | Gas-fired power generation | 7,340.0 | ~12.6% | | Renewable energy (hydro, wind, solar) | 7,948.0 | ~13.6% | | Total | ~58,448.0 | 100% | - The company primarily generates revenue by selling electricity and heat products in the regions where its power assets are located, accounting for approximately 86% of its main business revenue[23] Analysis of Core Competencies The company's core competencies include its significant scale, advanced energy-saving and environmental protection equipment, extensive management experience, and robust corporate governance - Over 90% of the company's thermal power units are large-capacity, high-efficiency units of 300 MW and above, with approximately 60% being 600 MW and above, significantly higher than the national average[25] - All coal-fired units have achieved ultra-low emissions[25] - As a public company listed in Hong Kong and Shanghai, the company has established an effective internal management and control system, fostering a positive image in the capital market and demonstrating strong financing capabilities[26] Management Discussion and Analysis of Operations Overall Business Performance Review In 2020, total power generation decreased by 3.62% to 207.317 billion kWh, while heat sales increased by 16.98% to 145 million GJ, with all new capacity being clean energy Core Operating Data | Core Operating Data | 2020 | Year-on-year change | | :--- | :--- | :--- | | Power Generation | 207.317 billion kWh | -3.62% | | Heat Sales | 145 million GJ | +16.98% | | New Generating Units | 1,957.56 MW | All clean energy | Analysis of Key Operating Performance Total operating revenue decreased by 3.11% to RMB 90.744 billion, while net profit attributable to parent company shareholders surged by 22.68% to RMB 4.179 billion, driven by lower costs Analysis of Main Business In 2020, operating revenue declined due to lower power generation, while operating costs decreased significantly due to a 9.91% reduction in fuel costs, leading to improved gross profit margins Key Financial Items | Item | Current Period (RMB thousand) | Prior Period (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 90,744,016 | 93,654,431 | -3.11 | | Operating Costs | 76,075,537 | 80,482,483 | -5.48 | | Financial Expenses | 4,432,582 | 5,189,379 | -14.58 | | Net Cash Flow from Operating Activities | 25,248,152 | 21,376,881 | 18.11 | Gross Profit Margin by Business Segment | Business Segment | Operating Revenue (RMB thousand) | Operating Costs (RMB thousand) | Gross Profit Margin (%) | Change in Gross Profit Margin from Prior Year | | :--- | :--- | :--- | :--- | :--- | | Power Generation | 70,185,438 | 56,344,739 | 19.72 | Increased by 2.64 percentage points | | Heat Supply | 6,656,108 | 6,921,609 | -3.99 | Increased by 4.45 percentage points | | Coal Sales | 12,540,697 | 12,603,247 | -0.50 | Decreased by 1.17 percentage points | - Sales to the top five customers accounted for 54.04% of total annual sales, with State Grid Shandong Electric Power Company being the largest customer at 27.73%[36][37] Analysis of Assets and Liabilities Total assets reached RMB 234.611 billion, with construction in progress significantly increasing by 34.15% due to higher capital expenditure, and other equity instruments rising by 52.80% Key Balance Sheet Items | Item Name | Current Period End (RMB thousand) | Change from Prior Period End (%) | Main Reason | | :--- | :--- | :--- | :--- | | Construction in Progress | 22,409,048 | 34.15% | Increase in infrastructure projects | | Other Equity Instruments | 24,645,175 | 52.80% | Issuance of perpetual medium-term notes | - As of December 31, 2020, some of the company's subsidiaries pledged electricity and heat collection rights for approximately RMB 18.44 billion in borrowings, and generating units, equipment, land, and mining rights for approximately RMB 3.971 billion in borrowings[41] Analysis of Industry Operating Information Total power generation decreased by 3.62%, with thermal power down 5.10%, while clean energy generation increased; market-based electricity transactions rose to 59.6% Power Generation and Revenue by Type | Type | Power Generation (billion kWh) | Year-on-year | Revenue (RMB thousand) | Year-on-year | | :--- | :--- | :--- | :--- | :--- | | Thermal Power | 189.719 | -5.10% | 64,450,166 | -6.05% | | Wind Power | 6.410 | 7.66% | 3,032,587 | 5.56% | | Hydropower | 10.240 | 22.54% | 1,983,884 | 10.78% | | Photovoltaic Power | 0.948 | 8.35% | 718,801 | 10.22% | | Total | 207.317 | -3.62% | 70,185,438 | -5.05% | - As of the reporting date, the company's controlling installed capacity was 58,448 MW, comprising 43,160 MW of coal-fired, 7,340 MW of gas-fired, and 7,948 MW of renewable energy[46] - In 2020, 1,957.56 MW of new installed capacity was added, all from clean energy projects; 75 MW of coal-fired generating units were shut down[54][55] - The proportion of market-based electricity transactions increased from 53.7% to 59.6% of total on-grid power[59] Discussion and Analysis of Future Development The company aims to become a first-class energy listed company by optimizing its structure, planning 200 billion kWh generation and RMB 17 billion in investments for 2021, while addressing macroeconomic, coal market, and financing risks - The company's 2021 operating plan projects approximately 200 billion kWh of power generation and plans to invest around RMB 17 billion in power project infrastructure, environmental protection, and energy-saving technological upgrades[70] - The main risks faced by the company include macroeconomic and electricity market uncertainties, coal market price fluctuations, and rising financing costs in the capital market[71] Significant Matters Profit Distribution Plan The company proposed a 2020 cash dividend of RMB 0.25 per share, totaling RMB 2.466 billion, representing 75.60% of net profit, and plans for annual cash dividends of at least 50% of distributable profit from 2020-2022 Cash Dividend Distribution | Dividend Year | Dividend per 10 shares (RMB, pre-tax) | Cash Dividend Amount (RMB thousand) | Ratio to Net Profit Attributable to Parent (%) | | :--- | :--- | :--- | :--- | | 2020 | 2.50 | 2,465,744 | 75.60% | | 2019 | 1.46 | 1,439,995 | 50.29% | | 2018 | 0.66 | 650,956 | 42.00% | - The company's 2020-2022 shareholder return plan proposes that annual cash dividends will generally be no less than 50% of the distributable profit in the consolidated financial statements, with a minimum dividend of RMB 0.2 per share[73] Material Related Party Transactions The company engaged in various daily operational related party transactions with its controlling shareholder, China Huadian, and its affiliates, all within annual limits, and announced post-period equity sales - In 2020, the company purchased approximately RMB 5.158 billion in fuel and approximately RMB 5.422 billion in engineering equipment and services from its controlling shareholder, China Huadian, both within annual limits[81] - As of the end of 2020, the company and its subsidiaries had outstanding borrowings of approximately RMB 15.422 billion from China Huadian; the highest daily average deposit balance with Huadian Finance was approximately RMB 8.901 billion, both within agreement limits[82][83] - Post-reporting period, on February 26, 2021, the company announced the sale of a 65% equity stake in Ningxia Lingwu and a 53% equity stake in Ningxia Heating to China Huadian for a total consideration of approximately RMB 4.072 billion[86] Social Responsibility The company actively fulfilled social responsibilities, investing RMB 8.518 million in poverty alleviation and achieving ultra-low emissions for most coal-fired units, despite incurring environmental fines totaling RMB 595,000 - In 2020, the company directly invested RMB 8.518 million in poverty alleviation efforts, helping 1,245 individuals escape poverty[94][97] - Most of the company's coal-fired generating units have achieved ultra-low emissions[102] - During the reporting period, the company was fined a total of RMB 595,000 for environmental matters, including unorganized emissions[103] Share Changes and Shareholder Information Shareholders and Actual Controller Information As of 2020 year-end, the company had 122,950 ordinary shareholders, with China Huadian Group Co., Ltd. as the controlling shareholder holding 46.84% of shares Top Shareholders | Shareholder Name | Shares Held at Period End (shares) | Proportion (%) | | :--- | :--- | :--- | | China Huadian Group Co., Ltd. | 4,620,061,224 | 46.84 | | HKSCC Nominees Limited | 1,802,636,924 | 17.35 | | Shandong Development Investment Holding Group Co., Ltd. | 757,226,729 | 7.68 | | China Securities Finance Corporation Limited | 397,071,140 | 4.03 | - The company's controlling shareholder is China Huadian Group Co., Ltd., holding 46.84% of the company's shares[116][451] Directors, Supervisors, Senior Management, and Employees Changes in Holdings and Remuneration of Directors, Supervisors, and Senior Management The company experienced frequent changes in key management positions, with minimal shareholdings among directors, supervisors, and senior management, whose total pre-tax remuneration was RMB 6.2926 million - During the reporting period, Mr. Wang Xuxiang was replaced by Mr. Ding Huande as Chairman; Mr. Luo Xiaoqian was appointed as the company's General Manager[122][133] - As of the end of the reporting period, the total pre-tax remuneration actually received by all directors, supervisors, and senior management receiving compensation from the company was RMB 6.2926 million[123][132] Employee Information As of the reporting period end, the company and its main subsidiaries employed 27,116 individuals, with production personnel forming the largest group and approximately 49% of employees holding bachelor's degrees or higher Employee Professional Composition | Professional Composition | Number of Employees | | :--- | :--- | | Management Personnel | 6,469 | | Professional and Technical Personnel | 2,189 | | Production Personnel | 17,512 | | Total | 27,116 | Corporate Governance Overview of Corporate Governance The company maintains strict adherence to corporate governance regulations, ensuring independent operation from its controlling shareholder through "five separations," and held regular board, supervisory, and general meetings - During the reporting period, the company held 2 general meetings, 11 board meetings, and 6 supervisory board meetings[141][143][144] - The company maintains "five separations" (personnel, assets, finance, institutions, and business) from its controlling shareholder, ensuring independent operation[142] Internal Control The board deemed internal controls effective as of December 31, 2020, with no significant deficiencies, and Lixin Certified Public Accountants issued an unqualified audit report on financial reporting internal controls - The company disclosed its internal control self-evaluation report, concluding that internal controls were effective as of December 31, 2020, with no significant deficiencies found[156][157] - Lixin Certified Public Accountants issued a standard unqualified audit report on the company's internal controls[158] Corporate Bonds Information Overview of Corporate Bonds As of the reporting period end, the company had multiple outstanding perpetual or ordinary corporate bonds traded on the Shanghai Stock Exchange, all with timely interest payments Corporate Bonds Overview | Bond Abbreviation | Code | Bond Balance (RMB 100 million) | Interest Rate (%) | Maturity Date | | :--- | :--- | :--- | :--- | :--- | | 18 Huadian Y1 | 143992.SH | 15.00 | 5.00 | 2021-07-17 | | 18 Huadian Y2 | 143993.SH | 15.00 | 5.20 | 2023-07-17 | | 18 Huadian Y3 | 143963.SH | 11.50 | 4.87 | 2021-08-15 | | 18 Huadian Y4 | 143965.SH | 8.50 | 5.05 | 2023-08-15 | | 19HDGJ01 | 155747.SH | 20.00 | 3.58 | 2022-10-17 | Credit Rating and Bank Credit Lines The company holds an AAA credit rating with a stable outlook and has secured total bank credit lines of RMB 249.8 billion, with RMB 143.6 billion remaining unused - The company's corporate credit rating is AAA, with a stable outlook[165] - As of the end of the reporting period, the company had obtained total bank credit lines of RMB 249.8 billion, of which RMB 143.6 billion remained unused[173] Financial Report Audit Report Lixin Certified Public Accountants issued a standard unqualified audit report for the 2020 financial statements, with "impairment of non-current assets" identified as a key audit matter due to significant management judgment - Lixin Certified Public Accountants issued a standard unqualified audit report[176] - A key audit matter was "impairment of non-current assets", primarily involving impairment tests for fixed assets, construction in progress, intangible assets, and goodwill, which require significant management judgment[177][178] Consolidated Financial Statements As of 2020 year-end, total assets were RMB 234.611 billion, total liabilities RMB 141.646 billion, and equity attributable to parent company shareholders RMB 72.089 billion, with operating revenue of RMB 90.744 billion and net profit of RMB 4.179 billion Key Consolidated Income Statement Items | Consolidated Income Statement Items (RMB thousand) | 2020 | 2019 | | :--- | :--- | :--- | | Total Operating Revenue | 90,744,016 | 93,654,431 | | Total Operating Costs | 83,401,784 | 88,510,062 | | Total Profit | 7,044,050 | 5,536,575 | | Net Profit | 5,776,735 | 4,438,544 | | Net Profit Attributable to Parent Company Shareholders | 4,179,447 | 3,406,920 | Key Consolidated Cash Flow Statement Items | Consolidated Cash Flow Statement Items (RMB thousand) | 2020 | 2019 | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 25,248,152 | 21,376,881 | | Net Cash Flow from Investing Activities | -18,050,882 | -14,785,966 | | Net Cash Flow from Financing Activities | -7,164,373 | -6,826,773 | Notes to Financial Statements The notes detail significant accounting policies and estimates, including revenue recognition, long-term asset impairment, and financial instruments, along with disclosures on segment information and post-balance sheet events - The company's revenue recognition policy states that electricity revenue is recognized when electricity is supplied to grid companies; heat revenue is recognized when heat is supplied to customers; and coal sales revenue is recognized when control of the goods is transferred to the buyer[264] - Important accounting estimates and judgments include impairment of long-term assets, allowance for expected credit losses on accounts receivable, depreciation and amortization of fixed assets and intangible assets, and recognition of deferred income tax assets[283] - In February 2021, the company signed an agreement with China Huadian to sell equity stakes in Lingwu Power Generation and Ningxia Heating for a total consideration of approximately RMB 4.073 billion[475] - In March 2021, the company proposed to issue shares and convertible bonds to acquire minority equity stakes in Fuyuan Thermal Power and Mengdong Energy, aiming for full ownership[475]