HTGF(SH:600864)2019-04-18 16:00Financial Performance - In 2018, the company reported a total operating income of ¥2,759,293,648.67, an increase of 7.73% compared to ¥2,561,402,779.22 in 2017[29]. - The net profit attributable to shareholders of the listed company for 2018 was -¥142,058,936.54, a decrease of 139.66% from ¥358,193,485.01 in 2017[29]. - The company decided not to distribute profits for the year due to operational losses and insufficient funds to support sustainable development[6]. - The company's total assets decreased by 15.50% to ¥38,909,170,131.48 in 2018 from ¥46,048,787,473.55 in 2017[29]. - The net assets attributable to shareholders of the listed company decreased by 6.56% to ¥12,576,163,881.65 at the end of 2018[29]. - Basic earnings per share for 2018 was -0.07 CNY, a decrease of 141.18% compared to 0.17 CNY in 2017[32]. - The diluted earnings per share for 2018 was also -0.07 CNY, reflecting the same percentage decrease as basic earnings[32]. - The company reported a net profit attributable to shareholders for Q4 2018 was 98,826,962.91 CNY, contrasting with a net loss of -144,981,343.16 CNY in Q2 2018[33]. - The total operating income for Q4 2018 was 425,355,833.58 CNY, showing a significant recovery from 71,646,037.65 CNY in Q3 2018[33]. - The company reported a net cash flow from operating activities of 4,018,368,463.35 CNY in Q4 2018, a substantial increase compared to -1,784,456,125.69 CNY in Q2 2018[33]. Business Segments - The company operates in two main business segments: thermal power and securities, with a focus on maximizing economic benefits while fulfilling government heating obligations[40][42]. - The company has expanded its securities business through its subsidiary, Jianghai Securities, which covers a wide range of traditional and innovative financial services[40][41]. - Jianghai Securities has 77 branches, including 19 subsidiaries and 58 business offices, with a strategic shift from a regional focus to a national presence[41]. - The company’s thermal power business generated a main revenue of 1,194.86 million yuan, with electricity generation decreasing by 6.87% to 37,416 million kWh and electricity sales down by 19.97% to 19,614 million kWh[78]. - The company’s brokerage business revenue was 32.3 million yuan, a decrease of 19.17% due to overall market trading activity decline and reduced commission rates[81]. Risks and Challenges - The company faced significant risks in its thermal power and securities businesses, as well as risks associated with major asset restructuring[10]. - The heating industry is characterized by low profitability, with the company focusing on cost control to maintain a competitive edge in Harbin[51]. - The company experienced significant losses in regions such as Guangdong, Beijing, and Tianjin, primarily due to strategic investments in branch offices and a weak overall market[111]. - The company faces challenges including increased market risks, insufficient capital, and a talent shortage in the competitive securities industry[192][193]. Cost and Expenses - Total operating costs increased by 29.08% year-on-year, primarily due to rising coal prices in the thermal power business and increased interest expenses on bonds and subordinated debt in the securities business[97]. - Operating costs rose by 8.64% year-on-year, mainly attributed to the increase in coal prices affecting the company and its subsidiary, Heisui Bao[97]. - Interest expenses increased by 27.16% year-on-year, primarily due to higher interest on bonds and subordinated debt from the wholly-owned subsidiary Jianghai Securities[97]. - The total cost for the thermal power business amounted to ¥1,031,036,618.42, reflecting an increase of 8.45% compared to ¥950,709,849.21 in the same period last year[117]. - The total cost for the securities industry reached ¥1,091,344,460.18, representing a 25.13% increase from ¥872,167,476.98 in the previous year[117]. Investments and Future Plans - The company plans to enhance product design capabilities and control operational costs to improve market competitiveness in the future[112]. - The company anticipates future growth in the clean energy sector, driven by national policies promoting renewable energy and environmental protection[185]. - The company aims to enhance its brokerage business by building internet channels and expanding institutional business in major cities like Beijing, Shanghai, Guangzhou, and Shenzhen[199]. - The investment banking segment will strengthen its bond business and pursue opportunities in mergers and acquisitions to leverage market conditions[200]. Asset Management - The asset management business managed assets totaling CNY 252.87 billion, with 327 products in existence, ranking 11th in the industry by average monthly asset size[84]. - The company’s investment in available-for-sale financial assets was 7.879 billion RMB, with a report period investment income of 560.438 million RMB[173]. - The company completed the absorption merger of its wholly-owned subsidiary, Harbin Binlong Thermal Power Engineering Installation Co., Ltd., which was approved by the shareholders' meeting on June 25, 2018[178]. Regulatory Environment - The regulatory environment is expected to become more stringent, necessitating a focus on compliance and risk management to ensure steady operational improvements[199].