HDECL(SH:900937)2022-08-29 16:00Financial Performance - The company's operating revenue for the first half of 2022 was approximately CNY 5.17 billion, a decrease of 1.04% compared to the same period last year[19]. - The net profit attributable to shareholders for the same period was approximately -CNY 1.45 billion, compared to -CNY 522.92 million in the previous year[19]. - The net cash flow from operating activities was -CNY 751.85 million, a significant decline of 1,939.57% year-on-year[19]. - The company's total assets at the end of the reporting period were approximately CNY 21.56 billion, down 4.75% from the end of the previous year[19]. - The company's net assets attributable to shareholders were approximately -CNY 3.61 billion, compared to -CNY 2.11 billion at the end of the previous year[19]. - The basic earnings per share for the first half of 2022 was -CNY 0.74, compared to -CNY 0.266 in the same period last year[20]. - The company reported a net profit of -CNY 1.45 billion for the first half of 2022, with basic earnings per share at -CNY 0.74[27]. - The total power generation volume of the company's wholly-owned and controlled power plants was 9.60 billion kWh, a year-on-year decrease of 21.48%[27]. - Operating revenue for the period was CNY 5.17 billion, a slight decrease of 1.04% compared to the previous year[29]. - Operating costs increased by 15.96% to CNY 6.03 billion, primarily due to rising coal prices[29]. - The company reported a net profit loss of CNY 35.49 million for Heilongjiang New Century Energy Co., Ltd., with total assets of CNY 75.7 million[37]. - The company faced a net profit loss of CNY 993.73 million for Heilongjiang Longdian Electric Co., Ltd., with total assets of CNY 80.82 million[37]. - The company reported a net profit loss of CNY 77.35 million for Shenyang Jinshan Energy Co., Ltd., with total assets of CNY 1.950 billion[39]. - The company reported a net loss of CNY -7,730,906,668.23, compared to a loss of CNY -6,277,913,811.28 in the previous period[110]. - The company reported a significant increase in prepayments, which decreased from ¥92,574,272.58 to ¥53,310,235.90, a decline of about 42.49%[108]. - The company reported a decrease in comprehensive income of approximately ¥1.45 billion during the period, leading to a total comprehensive loss of about ¥1.61 billion[131]. - The company experienced a net loss attributable to shareholders of approximately ¥1.50 billion during the period[130]. Operational Highlights - The company remains the largest power generation and centralized heating operator in Heilongjiang Province, focusing on electricity and heat sales[23]. - The main performance drivers include electricity generation, electricity prices, and fuel prices, with additional influences from technological innovation and environmental policies[23]. - The total installed power generation capacity in Heilongjiang Province was 40.77 million kW, with thermal power accounting for 62.08% of the total[24]. - The average on-grid electricity price was CNY 469.01 per thousand kWh, with a utilization hour of 1,480 hours[27]. - The company plans to issue shares to acquire 51% of Shanxi Jinxing Energy Co., Ltd. from its controlling shareholder, China Huadian Corporation[28]. - The company has completed a coal storage project with an environmental impact assessment approved in December 2021, and the project was finished in April 2022[59]. - The company has implemented measures to ensure that all emissions from its power plants meet ultra-low discharge standards, with specific SO2 emissions as low as 0.01 g/kWh[57]. - The company has installed flue gas treatment facilities on all 27 coal-fired power units, achieving ultra-low emissions as per national standards[58]. - The company has implemented emergency response plans for environmental incidents across all nine key pollutant discharge units, enhancing their emergency response capabilities[60]. - The company plans to peak carbon emissions by 2023, with a focus on shutting down outdated coal power capacity and implementing technological upgrades to reduce carbon intensity[63]. Financial Position and Risks - The company's total assets were CNY 21.56 billion, while shareholder equity was -CNY 3.61 billion, indicating significant financial pressure[27]. - The company’s financial risk is significant, with an asset-liability ratio exceeding 100% and challenges in capital operations and credit ratings[43]. - The company’s stock was subject to delisting risk due to a negative net asset value reported in the 2021 annual audit[43]. - The company’s total liabilities included long-term borrowings of CNY 7.63 billion, representing 35.39% of total liabilities, and lease liabilities of CNY 3.82 million, representing 0.02%[32]. - The company’s total restricted assets amounted to CNY 6.802 billion, primarily due to judicial freezes and pledges related to receivables[34]. - The company has received a non-standard audit opinion for the 2021 financial statements, indicating significant uncertainties regarding its ability to continue as a going concern[71]. - The company’s subsidiary, Heilongjiang New Century Energy Co., Ltd., has applied for bankruptcy due to long-term losses and insolvency[75]. - The company has faced ongoing litigation related to asset transfer disputes, with recent developments in the appeals process[76]. - The company is involved in a lawsuit against Yaochi Company for a total of 11.92 million yuan related to contract payment issues, with appeals ongoing[77]. Corporate Governance and Management - The company held its annual shareholders meeting on May 18, 2022, where all resolutions were approved without any dissenting votes[45]. - The company appointed a new general manager, Feng Rong, following the resignation of the previous general manager, Lang Guomin[52]. - The company elected new independent directors, Zhang Jinsong and Ma Lei, to replace departing independent directors[51]. - The company has no ongoing employee stock ownership plans or other incentive measures currently in place[54]. - The company has committed to reducing and standardizing related party transactions to protect the interests of shareholders[69]. Strategic Initiatives - The company plans to continue its investment in major technical renovation projects for its power plants in 2022[48]. - The company is focused on enhancing operational efficiency and market responsiveness, particularly in direct electricity trading and optimizing heat supply management[73]. - The company intends to implement cost management strategies, including optimizing maintenance and reducing operational costs through automation and efficiency improvements[73]. - The company is actively pursuing policies to stabilize coal supply and control costs amid market fluctuations[73]. - The company plans to focus on market expansion and new product development in the upcoming quarters[143]. Accounting and Financial Instruments - The financial statements are prepared based on the assumption of going concern, reflecting the company's ongoing efforts to improve its financial situation[148]. - The accounting treatment for business combinations under common control involves measuring the acquired assets and liabilities at their book value in the consolidated financial statements of the final controlling party[155]. - For business combinations not under common control, goodwill is recognized when the purchase cost exceeds the fair value of identifiable net assets acquired; if less, the difference is recognized in current profit or loss[156]. - The company measures financial liabilities at amortized cost, including short-term loans and long-term borrowings, with related transaction costs included in the initial recognition amount[174]. - The expected credit loss model is applied to financial assets measured at amortized cost, with provisions based on the expected credit loss over the entire life of the financial instrument if credit risk has significantly increased since initial recognition[179]. - The company categorizes receivables into different groups based on credit risk characteristics, with expected default loss rates ranging from 0% for 0-6 months to 100% for over 5 years[185]. - The company uses a monthly weighted average method for inventory valuation[196]. - The net realizable value of inventory is determined based on market prices at the balance sheet date[199].