广西能源(600310) - 2018 Q4 - 年度财报

Company Profile and Financial Overview Company Basic Information Guangxi Guidong Electric Power Co., Ltd. (stock code 600310) is a Shanghai Stock Exchange-listed company, with Qin Min as its legal representative, headquartered in Hezhou, Guangxi - The company's full Chinese name is "Guangxi Guidong Electric Power Co., Ltd.", with stock abbreviation "Guidong Electric Power" and stock code 600310[15][19] Key Financial Data and Indicators In 2018, revenue grew by 16.48% to CNY 11.93 billion, and net profit attributable to shareholders increased by 7.97% to CNY 68.5 million, significantly boosted by a CNY 119 million investment gain from selling Guohai Securities shares, despite a 71.07% drop in net operating cash flow Key Accounting Data for the Past Three Years (Unit: CNY) | Key Accounting Data | 2018 | 2017 | Current Period vs. Prior Year Change (%) | 2016 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 11,933,180,236.80 | 10,244,834,999.80 | 16.48 | 5,212,623,187.30 | | Net Profit Attributable to Listed Company Shareholders | 68,497,672.78 | 63,440,511.04 | 7.97 | 209,400,229.84 | | Net Profit Attributable to Listed Company Shareholders Excluding Non-Recurring Gains/Losses | -67,191,507.66 | -104,684,855.19 | N/A | 44,775,901.91 | | Net Cash Flow from Operating Activities | 65,788,047.67 | 227,397,118.14 | -71.07 | 227,796,078.63 | | Total Assets | 14,404,967,574.61 | 12,753,786,654.20 | 12.95 | 11,004,534,019.85 | | Net Assets Attributable to Listed Company Shareholders | 1,883,176,535.90 | 2,038,565,512.71 | -7.62 | 2,663,104,846.19 | Key Financial Indicators for the Past Three Years | Key Financial Indicators | 2018 | 2017 | Current Period vs. Prior Year Change (%) | 2016 | | :--- | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (CNY/share) | 0.0827 | 0.0766 | 7.96 | 0.2530 | | Weighted Average Return on Net Assets (%) | 3.47 | 2.35 | Increased by 1.12 percentage points | 7.53 | - Total non-recurring gains and losses in 2018 amounted to CNY 136 million, primarily from a CNY 119 million investment gain on the disposal of available-for-sale financial assets (sale of Guohai Securities shares)[28][29] Business Overview Main Business, Operating Model, and Industry Position The company's core businesses are power generation and sales, and oil products, operating a unique "generation-grid integrated" model for electricity and a preliminary integrated supply chain for oil products through its subsidiary Guangxi Yongsheng, holding a significant position in the South China market - The power business operates a "generation-grid integrated" model with a complete generation and supply network; in 2018, total installed capacity was 377,600 kW, power generation 1.634 billion kWh (down 7.37% YoY), and power sales 3.899 billion kWh (up 3.07% YoY)[31] - The oil products business, relying on subsidiary Guangxi Yongsheng, holds wholesale qualifications for refined oil products and has initially formed a full industry chain covering production, storage, logistics, wholesale, and retail sales[32][35] - The company is one of the few listed power enterprises with a "generation-grid integrated" operating model, possessing a stable customer base and market; its oil products subsidiary, Guangxi Yongsheng, is a major supplier in the South China refined oil market[35] Core Competencies The company's core competencies include power concession rights, regional advantages from inter-provincial grid connectivity, a unique "generation-grid integrated" model, experienced management, hydropower-centric clean energy, a listed company financing platform, and Guangxi Yongsheng's integrated oil products operations - The company's core competencies include power concession rights, regional advantages, a "generation-grid integrated" operating model, management expertise, hydropower clean energy advantages, a listed company financing platform, and Guangxi Yongsheng's integrated oil products production, supply, and sales capabilities[39] Management Discussion and Analysis Overview of Operating Performance In 2018, the company achieved CNY 11.93 billion in revenue, up 16.48%, primarily driven by oil products, with net profit attributable to shareholders reaching CNY 68.5 million, up 7.97%, largely due to a CNY 118 million investment gain from Guohai Securities share reduction and a 349.14% increase in oil business subsidiary net profit Key Operating Data for 2018 | Indicator | Amount | YoY Change | | :--- | :--- | :--- | | Operating Revenue | CNY 11.93 billion | +16.48% | | - Power Sales Revenue | CNY 1.606 billion | +3.59% | | - Oil Products Business Revenue | CNY 9.863 billion | +17.28% | | Operating Profit | CNY 0.128 billion | +0.22% | | Net Profit | CNY 0.068 billion | +7.97% | | Earnings Per Share | CNY 0.0827 | +7.96% | - Operating performance was significantly influenced by two factors: 1) an investment gain of approximately CNY 118 million from the reduction of Guohai Securities shares; and 2) a substantial 349.14% year-on-year increase in net profit from oil business subsidiaries (Guangxi Yongsheng, Guisheng) to CNY 70.54 million[44][62] Main Business Analysis The company's main businesses are power and oil products; oil products accounted for 82.67% of total revenue with 17.28% growth and improved gross margin, while power sales grew 3.59%, and power generation revenue declined 11.72% due to low water levels, and power design consulting revenue surged 179.10% but with a 25.6 percentage point drop in gross margin Main Business by Segment (2018) | Segment | Operating Revenue (CNY billion) | Revenue YoY | Gross Margin (%) | Gross Margin YoY Change | | :--- | :--- | :--- | :--- | :--- | | Power Sales | 1.606 | +3.59% | 13.20% | Increased by 2.41 percentage points | | Power Generation | 0.321 | -11.72% | 55.93% | Decreased by 2.76 percentage points | | Oil Products | 9.863 | +17.28% | 3.06% | Increased by 0.81 percentage points | | Power Design Consulting | 0.269 | +179.10% | 24.29% | Decreased by 25.60 percentage points | - Oil products business achieved high growth in East and Central China, with revenues increasing by 185.38% and 1,056.45% respectively, indicating successful new market expansion[50] - Net cash flow from operating activities decreased by 71.07% year-on-year, primarily due to increased payments for goods by subsidiaries Guangxi Yongsheng and Guisheng[45][46] Investment Status Analysis During the reporting period, the company's total external equity investment was CNY 85.53 million, a 70.89% decrease year-on-year, primarily in energy technology, industrialized construction, and power design, while also advancing significant non-equity projects and realizing a CNY 119 million investment gain from selling Guohai Securities shares, positively impacting annual performance - During the reporting period, significant equity investments totaled CNY 85.53 million, primarily directed towards Chongqing Tongyuan Energy, Guangxi Construction Industrialization, and Sichuan Xidian Power Design companies[80][82] - The company sold 40.2878 million shares of Guohai Securities, generating an investment income of CNY 119 million, which positively impacted the 2018 operating performance[89] Progress of Major Non-Equity Investment Projects (Unit: CNY million) | Project Name | Project Amount | Investment in Current Period | Cumulative Actual Investment | Project Progress | | :--- | :--- | :--- | :--- | :--- | | Hezhou Aluminum Electronics Industrial Power Workshop Project | 294,452.00 | 47,923.08 | 258,303.36 | 83.07% | | Power Dispatching Center Project (Guidong Plaza) | 63,438.85 | 19,351.36 | 35,102.78 | 55.33% | | Yongsheng Company Petrochemical Storage Project | 15,247.62 | 8,058.00 | 11,490.00 | 75.36% | Analysis of Major Holding and Associate Companies The company holds 26 wholly-owned and controlled subsidiaries and 14 associate companies; oil products subsidiary Guangxi Yongsheng showed strong performance with 329.94% net profit growth, while major hydropower subsidiaries experienced declines, and associate companies like Guohai Securities and Guilin Bank contributed significant dividends, though some new materials and auto manufacturing ventures incurred losses - Oil trading subsidiary Guangxi Yongsheng achieved significant performance growth, with 2018 operating revenue of CNY 7.464 billion and net profit of CNY 67.5239 million, a 329.94% year-on-year increase[93] - Major hydropower subsidiaries experienced performance declines: Guijiang Electric Power's net profit decreased by 22.95% year-on-year to CNY 30.7259 million; Guihai Electric Power's net profit decreased by 12.02% year-on-year to CNY 20.0540 million[92] - Associate companies Guohai Securities and Guilin Bank provided significant investment income, with cash dividends of CNY 12.8372 million and CNY 6.0060 million respectively received during the reporting period[107][108] - Associate companies such as Fujian Wuyi Automobile Manufacturing Co., Ltd. and Guangxi Chaochao New Material Co., Ltd. incurred significant losses, negatively impacting the company's investment income[109][111] Future Development, Operating Plan, and Risks The company plans to maintain its core power business while expanding oil products and new building materials, projecting CNY 12.372 billion in 2019 revenue but anticipating a net loss from ordinary operations due to lower electricity prices and high financial expenses, facing risks from water uncertainty, market competition, receivables, policy changes, and major investment project uncertainties - Company development strategy: maintain and strengthen power generation and supply as the core business; steadily expand the oil products business chain; and develop new building materials industries[118] - 2019 operating plan: estimated power generation of 1.785 billion kWh, power sales of 4.153 billion kWh, and operating revenue of CNY 12.372 billion; however, net profit from ordinary operations (excluding investment income) is projected to be -CNY 175 million, primarily due to reduced industrial and commercial electricity prices and high financial expenses[121][122] - The company faces multiple risks: operational risks for hydropower generation due to natural factors; industry competition risks from power system reforms; recovery risks for certain receivables of subsidiary Guangxi Yongsheng; electricity price policy adjustment risks; and significant investment risks related to the Hezhou Aluminum Electronics Industrial Power Workshop project being suspended due to "not being included in planning"[123][124][125] Significant Matters Profit Distribution Plan The board proposes a 2018 profit distribution of CNY 0.25 (tax inclusive) cash dividend per 10 shares based on 828 million total shares, totaling CNY 20.6944 million, representing 30.21% of net profit attributable to shareholders, with no bonus shares or capital reserve conversion - The 2018 profit distribution plan proposes a cash dividend of CNY 0.25 (tax inclusive) per 10 shares, totaling CNY 20,694,375.00, with cash dividends accounting for 30.21% of net profit attributable to shareholders[5][128][129] Significant Related Party Transactions In 2018, the company's routine related party transactions primarily involved power sales to affiliates, totaling CNY 231 million, exceeding the estimated amount, but these transactions did not compromise the company's independence in business, personnel, or assets Actual Routine Related Party Transactions in 2018 (Unit: CNY million) | Related Party Transaction Category | Related Party Transaction Content | Related Party | Estimated Amount | Actual Amount | | :--- | :--- | :--- | :--- | :--- | | Sales of Goods | Power Sales | Guangxi Zhengrun New Material Technology Co., Ltd. | 1,430 | 1,537.49 | | | Power Sales | Guangxi Hezhou Guidong Electronic Technology Co., Ltd. | 18,650 | 20,995.09 | | | Power Sales | Guangxi Zhengrun Riqing High Purity Aluminum Technology Co., Ltd. | 350 | 282.50 | | Other Related Party Transactions | Office Space Lease | Guangxi Zhengrun Development Group Co., Ltd. | 154.33 | 236.34 | Significant Contracts and Guarantees As of the reporting period end, the company's total external guarantees amounted to CNY 798 million, representing 33.39% of net assets, all for subsidiaries, with CNY 708 million for subsidiaries with debt-to-asset ratios exceeding 70%; the company and its subsidiaries cumulatively incurred CNY 3.594 billion and USD 67 million in new borrowings to support operations and projects - As of the end of the reporting period, the company's total guarantees amounted to CNY 798 million, accounting for 33.39% of its net assets, all of which were guarantees for subsidiaries[146] - Debt guarantees provided for guaranteed entities with a debt-to-asset ratio exceeding 70% amounted to CNY 708 million[146] - In 2018, the company and its controlled subsidiaries cumulatively borrowed CNY 3.594 billion and USD 67 million from financial institutions, and repaid CNY 3.580 billion and USD 100 million in borrowings[43][148] Other Significant Matters The company disclosed several significant matters, including subsidiary Guangxi Yongsheng's major lawsuits and receivable recovery issues, notably a CNY 114 million claim against Liuzhou Zhenglin Group with uncertain recovery, plans for Philippine power project investment, borrowing from the controlling shareholder for liquidity, internal equity transfers for management optimization, and various financing plans including medium-term notes, corporate bonds, and asset securitization - Subsidiary Guangxi Yongsheng still holds a CNY 114 million claim against Liuzhou Zhenglin Group and its affiliates, with recovery uncertainty due to the latter's bankruptcy reorganization proceedings[153] - The company plans to apply to the National Association of Financial Market Institutional Investors for registration of various debt financing instruments totaling no more than CNY 2.75 billion, and intends to conduct asset securitization business not exceeding CNY 1.2 billion[158][159][161] - Subsidiary Guixu Energy plans to acquire the capacity indicators for Guangxi Liuzhou Power Generation Co., Ltd.'s 2x220MW units to facilitate the resumption of construction for the suspended Power Workshop project[160] Share Capital and Shareholder Information Shareholders and Actual Controller As of 2018 year-end, the company had 828 million total shares and 40,229 shareholders; Guangxi Zhengrun Development Group Co., Ltd. is the controlling shareholder with 50.03%, and Hezhou SASAC is the actual controller, though a pending equity transfer will shift the actual control to Guangxi Zhuang Autonomous Region SASAC - The controlling shareholder is Guangxi Zhengrun Development Group Co., Ltd., with a 50.03% stake[179][180] - During the reporting period, the indirect controlling shareholder's equity transfer was initiated, upon completion of which the company's actual controller will change from Hezhou SASAC to Guangxi Zhuang Autonomous Region SASAC[185][186] Corporate Bonds Corporate Bond Overview, Ratings, and Solvency As of 2018 year-end, the company had four outstanding corporate bonds totaling CNY 2.828 billion, with all interest paid on time; United Credit Rating maintained an "AA" long-term credit rating with a "stable" outlook, but the debt-to-asset ratio increased to 83.42% and interest coverage ratio decreased to 0.95, indicating increased debt repayment pressure Corporate Bond Status as of 2018 Year-End | Bond Abbreviation | Code | Maturity Date | Bond Balance (CNY) | Interest Rate (%) | | :--- | :--- | :--- | :--- | :--- | | 11 Guidong 01 | 122138 | 2019-04-16 | 600,000,000.00 | 6.3% | | 11 Guidong 02 | 122145 | 2019-06-20 | 228,015,000.00 | 5.3% | | 16 Guidong 01 | 135219 | 2019-02-20 | 1,000,000,000 | 6.3% | | 16 Guidong 02 | 135248 | 2019-03-12 | 1,000,000,000 | 5.7% | - United Credit Rating Co., Ltd. maintained the company's long-term corporate credit rating at "AA" with a "stable" outlook, and also maintained the credit rating of all outstanding bonds at "AA"[232] Key Solvency Indicators for the Past 2 Years | Key Indicators | 2018 | 2017 | Change | | :--- | :--- | :--- | :--- | | Debt-to-Asset Ratio (%) | 83.42% | 80.24% | Increased by 3.18 percentage points | | Current Ratio | 54.76% | 76.91% | Decreased by 22.15 percentage points | | Interest Coverage Ratio | 0.95 | 1.15 | -17.39% | Financial Report Audit Report Daxin Certified Public Accountants (Special General Partnership) issued a standard unqualified audit opinion on the company's 2018 financial statements, highlighting three key audit matters: goodwill impairment, construction in progress impairment, and oil business revenue recognition, all involving significant management judgment and estimates - The audit firm issued a standard unqualified audit opinion[243] - Key audit matters include: 1. Goodwill Impairment: Year-end goodwill book value of CNY 351 million, with impairment testing relying on significant management judgment 2. Construction in Progress Impairment: Construction in progress book value of CNY 3.981 billion, including the "Power Workshop Project" with a book value of CNY 2.446 billion which was suspended, but management believes no impairment provision is needed 3. Oil Business Revenue Recognition: Oil business revenue accounts for 82.67% of total revenue, is material in amount, and has a low gross margin, making its revenue recognition a key audit matter[245][247][251] Financial Statement Summary Financial statements show total assets increased to CNY 14.405 billion, but total liabilities also rose to CNY 12.017 billion, pushing the debt-to-asset ratio to 83.42%, with a significant surge in current liabilities; despite revenue growth, high financial expenses and asset impairment losses eroded profits, and cash flow analysis indicates reliance on external financing for operations and investments Consolidated Balance Sheet Summary (Unit: CNY billion) | Item | 2018 Year-End | 2017 Year-End | | :--- | :--- | :--- | | Total Assets | 14.405 | 12.754 | | Current Assets | 5.045 | 3.947 | | Non-Current Assets | 9.360 | 8.807 | | Total Liabilities | 12.017 | 10.234 | | Current Liabilities | 9.212 | 5.131 | | Non-Current Liabilities | 2.805 | 5.103 | | Total Owners' Equity | 2.388 | 2.520 | | Equity Attributable to Parent Company Owners | 1.883 | 2.039 | Consolidated Income Statement Summary (Unit: CNY billion) | Item | 2018 | 2017 | | :--- | :--- | :--- | | Total Operating Revenue | 11.933 | 10.245 | | Total Operating Costs | 11.895 | 10.313 | | Operating Profit | 0.128 | 0.127 | | Total Profit | 0.144 | 0.134 | | Net Profit | 0.101 | 0.100 | | Net Profit Attributable to Parent Company Shareholders | 0.068 | 0.063 | Consolidated Cash Flow Statement Summary (Unit: CNY billion) | Item | 2018 | 2017 | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 0.066 | 0.227 | | Net Cash Flow from Investing Activities | -0.686 | -1.353 | | Net Cash Flow from Financing Activities | 0.282 | 1.096 | Summary of Financial Statement Notes Notes detail key financial items: CNY 727 million in restricted cash, full bad debt provisions for certain receivables due to recovery uncertainty, CNY 3.98 billion in construction in progress including the CNY 2.446 billion Power Workshop project deemed not impaired despite suspension, CNY 3.79 million goodwill impairment for Deqing Yuecheng Xinghai Oil Station, and significant short-term debt of CNY 6.715 billion indicating substantial short-term repayment pressure, alongside ongoing major litigation - Of the monetary funds, CNY 727 million is restricted as bank acceptance bill deposits, limiting its ownership or use[360][548] - The year-end balance of construction in progress is CNY 3.981 billion, with the "Power Workshop Project" having a book value of CNY 2.446 billion; although this project has been suspended, management believes there is a high probability of resuming construction, thus no impairment provision was made[417][419][608][614] - Goodwill had a year-end book value of CNY 351 million; following impairment testing, a goodwill impairment provision of CNY 3.79 million was made for the asset group related to Deqing Yuecheng Xinghai Oil Station Co., Ltd[425][428][429] - Non-current liabilities due within one year significantly increased from CNY 493 million at the end of the previous year to CNY 3.744 billion, primarily due to a CNY 3.369 billion increase in bonds payable due within one year[475][479] - The company is involved in multiple significant lawsuits, primarily concerning sales contract disputes of subsidiary Guangxi Yongsheng, with significant uncertainty regarding the recovery of certain receivables, for which substantial bad debt provisions have been made[615][616][620]