Annual Results 2015 - TodayIRSource: Corporate Annual Report 2015, IFRS In 2015, the company accrued...

Annual Results 2015

April 7th, 2016

Hong Kong

2

2015 Operational Performance and Analysis

Review of the Corporate Performance in “The 12th Five-

Year Plan” Period

2016 Market Environment Analysis

Business Prospects in 2016

1

2 Source: Corporate Information and Data

Results Summary: 2015 Operation Highlights

30000

32000

34000

36000

38000

40000

42000

44000

2014 2015

41341 42338

2.41%

1000

1200

1400

1600

1800

2000

2014 2015

1888.45

1697.252 10.12%

3300

3400

3500

3600

3700

3800

3900

2014 2015

3486

3848

10.38%

0

2

4

6

8

10

12

14

2014 2015

9.21

13.7

48.75%

Installed Capacity

(MW)

Gross Power Generation

(100 million kWh)

Coal Production

(10 thousand tonnes)

Polypropylene Production


400

500

600

700

800

2014 2015

701.94

618.9

11.83%

0

10

20

30

2014 2015

17.67

27.88

57.73%

0

0.05

0.1

0.15

0.2

0.25

2014 2015

0.13

0.21

57.68%

78

78.5

79

79.5

2014 2015

79.36 79.38 0.02%

Sales Revenue

(RMB: 100 million)

Net Profit Attributable to Shareholders

(RMB: 100 million)

Earnings Per Share

(Yuan/shares) Debt-to-Asset Ratio

(%)

3 Source: Corporate Annual Report 2015, IFRS

In 2015, the company accrued the provision for impairment of assets of RMB 1.371 billion, bad debt provision of RMB

1.249 billion, inventory depreciation provision of RMB 347 million, and long-term investment impairment provision of

RMB 2.958 billion (This provision doesn’t impact the consolidated gross profit and net profit attributable to shareholders)

The impairment provisions mentioned above reduced the company profit in 2015 by RMB 2.967 billion, reduced the net

profit attributable to the parent company in the consolidated financial statement by RMB 2.062 billion, and reduced the

net profit of the company by RMB 1.381 billion

Results Summary: 2015 Financial Highlights

20000

25000

30000

35000

40000

45000

Managed Capacity (MW) Attributable Capacity (MW)

41341

30448

42338

32127

End of 2014 End of 2015

76.15%

6.99%

12.23% 4.18% 0.46%

Capacity Structure by the end of 2014

Coal-fired Power Gas-fired Power Hydro PowerWind Power Solar Power 4

Growth in Installed Capacity in 2015

2.41%

5.51%

In 2015, the company’s installed capacity has achieved 5.51% yoy growth, and the power

generation capacity has been raised.

In 2015, the company’s energy structure has been further optimized by raising the weight of

clean energy in gross capacity.

Source: Corporate Information and Data

73.88%

6.83% 14.41%

4.43% 0.45%

Capacity structure by the end of 2015

Coal-fired Power Gas-fired Power Hydro Power

Wind Power Solar Power

Power Business: Steady Growth and Structural Optimization

Power Business: Utilization Hours Dropped, but Remained

Above Sector Average

5 Source: Corporate Information and Data, CEC

In 2015, the company’s average

utilization hours has dropped on

yoy basis, but the utilization

hours of hydropower increased.

In 2015, except for

hydropower, the company’s

utilization hours of thermal

power, wind power and

average are all above the

sector average.

YOY Growth of Utilization Hours of the

Company in 2015 (Hours)

Utilization Hours of the Company Compared

with Sector Average (Hours)

0

1000

2000

3000

4000

5000

6000

Average Thermal Power Hydropower Wind Power

4701 5046

3427

2000

4240 4482

3595

1875

2014 2015

0

1000

2000

3000

4000

5000

Total Thermal Power Hydropower Wind Power

4240 4482

3595

1875

3969 4329

3621

1728

Company Average 2015 Sector Average 2015

0

20

40

60

80

100

120

140

Coal-fired Power Gas-fired Power Hydropower Wind Power Solar Power

122.34

2.23 5.49 3.09 0.46

117.13

6.48 10.48 3.08 0.61

2014 2015

6

Comparison of Profitability of Power Business by Segment

(RMB:100 million)


Profit Split of Power Business by Segment in 2015

85.01%

4.70% 7.60%

2.23% 0.44%

Coal-fired Power Gas-fired Power Hydropower Wind Power Solar Power

Power Business: Obvious Advantage of Power Sector and

Outstanding Contribution from Thermal Power Business

140

145

150

155

160

165

170

2014 2015

169.66

151.18


Cost Breakdown for 2014 Cost Breakdown for 2015

10.89%

Unit Fuel Cost of Thermal Power Generation (RMB/MWh)

1.06%

42.79%

17.86%

3.62%

5.07%

13.57%

15.99%

1.23%

38.98%

20.21%

2.88%

6.15%

14.19%

16.33%

Power Business: Effective Cost Control

0

0.2

0.4

0.6

0.8

1

1.2

2008 2009 2010 2011 2012 2013 2014 2015

1.14

0.45 0.42 0.38 0.37 0.34 0.25

0.17


SO2 emission (g/kWh)

In 2015, the company realized the unit coal consumption of 305.72 g/kWh, decreased by 3.55g /kWh on yoy basis.

In 2015, the company completed the ultra-low emission upgrade and renovation for 29 units; reached the accumulative

rate of desulphurization of 100.00%, and comprehensive desulphurization efficiency of 97.13%; and reached the

accumulative deNOx rate of 99.44%, and comprehensive deNOx efficiency of 81.12%.

0

0.5

1

1.5

2

2.5

2008 2009 2010 2011 2012 2013 2014 2015

2.03

1.7

1.4 1.33 1.22

0.84

0.36 0.24

NOX emission (g/kWh)

0

0.05

0.1

0.15

0.2

0.25

2008 2009 2010 2011 2012 2013 2014 2015

0.24

0.17

0.13 0.12 0.1 0.1

0.07 0.046

Ash emission (g/kWh)

0

0.05

0.1

0.15

0.2

0.25

2008 2009 2010 2011 2012 2013 2014 2015

0.23

0.17

0.075 0.06 0.05

0.038 0.021 0.032

Sewage emission (kg/kWh)

Power Business: Continuous Improvement in Emissions

Indicators and Obvious Energy Saving Effect

9

2014年，公司共7项电源项目获得核准，共计2796 MW 。

Hydropower Wind power Solar power Thermal power

Leizhou” 2x1,000MW Coal-fired Power

Generation Project

Tangshan Northern Suburb 2× 350MW CHP Project

Fengning Datan 200MW Wind Farm Project

Fengning Phase I 20MW Solar Power Generation Project

Xilinhot 2x660MW Coal-fired

Power Generation Project

Huludao 2x350MW Coal-fired

Thermal Power Project

Jintan 2x400MW Gas Turbine CHP Project

Rugao Economic And Technological Development

Zone 2x12MW CHP Project

Xinyu Phase II 2x1,000MW Expansion Project

Wuning Sun Mountain 50MW Wind Farm Project

Shicheng Jinhua Mountain 99.5MW Wind Farm

Project

Pingluo 2x660MW Coal-fired

Power Generation Project

Qingtongxia Shashidunliang

48MW Wind Farm Project

Golmud Phase III 50MW Solar Power Generation Project

Gonghe Phase III 10MW Solar Power Generation Project

Gonghe Phase IV 20MW Solar Power Generation Project

Pinghu 32MW Wind Farm Project

Zuoyun Xiaojingzhuang Village 49.5MW Wind

Farm Project

Wujiang River Yinpan Hydropower Station

45MW Capacity Increasing Project

In 2015, the company obtained government approval for projects with total capacity of 9,488.5 MW, among which

8,864 MW for thermal power projects, 479.5 MW for wind power projects, 100MW for solar power projects, and 45MW

for hydropower capacity increasing projects.


Power Business: Preliminary projects Bore Fruit

Coal Production 2012-2015


Source: Corporate Information and Data 10

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2012 2013 2014 2015

4477

3663 3486

3848

Non-power Business: Promoting Steadily

Coal-to-Chemical Business

Operation

Duolun Coal –to-Chemical Project: 137,000

tonnes of PP produced in 2015;

Hexigten Banner Coal-based Natural Gas

Project: 552 million standard cubic meters of

natural gas produced in 2015.

Reorganization

On July 7, 2014, Datang Power signed the

Framework Agreement for Reorganization of

Coal-to-chemical Segment and Related Projects

(“Reorganization Framework Agreement”) with

China Reform Holdings.

On March 29, 2016, Datang Power entered into

a termination agreement to the Reorganization

Framework Agreement with China Reform

Holdings to confirm the termination of the

Reorganization Framework Agreement.

China Datang Corporation will direct and

promote the reorganization of the coal-to-

chemical segment and other related projects

further.

12


Review of the Corporate Performance in “The

12th Five-Year Plan” Period



11

From 2011 to 2015, the company adhered

to the value thinking and benefits

orientation, focused on strengthening

advantages of core power generation

business and promoting the structural

adjustment, and improved the production

and operation situation, laying a solid

foundation for the sound development in

the period of “The 13th Five-Year Plan”!


12

Business

Performance

Safety

Production

Structural

Adjustment

Energy

Conservation

and Emission

Reduction

Technical

Innovation

Corporate

Governance

Review of “The 12th Five-Year Plan” Period（Ⅰ）

Operating Performance Over the past five years, the total assets of the

company have increased from RMB 210.8 billion to RMB 303.4 billion, increasing by 43.92%. The installed capacity has increased from 36.3 million KW to 42.34 million KW, increasing by 16.63%. The annual profit has increased from RMB 4.624 billion to RMB 6.568 billion, increasing by 42.04%. The ratio of loss-making coal-based power enterprises has decreased from 48% to 8%, and many enterprises suffering from long-run loss have become profitable.

Safety Production Over the past five years, the company has successfully

completed the task of ensuring power supply for the Eighteenth National Congress, APEC Conference, 70th Anniversary of Victory of the Anti-Japanese War, and the activities during “two festivals” and “NPC & CPPCC”. 26 generating units of the company have gained the title of Reliability Golden Generating Units (Grade A), accounting for 13.5% of the total number in China. The safety management level of enterprises engaging in coal chemical, coal mining, and metallurgical industries have been continuously improved, and the production safety has been under control.

Structural Adjustment During the period of “The 12th Five-Year Plan”, the

company approved 22.6 GW of power generating projects in total, and realized the total production capacity of 7.21 GW. The power generation structure has been constantly optimized; the structure of coal-fired power, hydropower and wind power with the proportions of 88.18%, 10.62% and 1.20% has been turned to that of coal-fired power, hydropower, wind power, gas turbine and solar power generation with the proportions of 73.88%, 14.41%, 4.43%, 6.83% and 0.45%. The power supply of the company has become greener and more efficient.


13

Review of “The 12th Five-Year Plan” Period（Ⅱ）

Energy Conservation and Emission Reduction Over the past

five years, the net coal consumption rate of coal fired units of the company has reduced by 17.87g/kWh. 59 units have gained the title of Energy Efficiency Benchmarking Winning Units of National 600MW Coal-fired Units. According to the national policies and new local environmental protection requirements, the company has accelerated the implementation of upgrading and reconstruction of environmental protection systems of the operating units, and the installing rate of denitrition equipment has the first to reach 100% among similar enterprises. It has arranged the ultra-low emission transformation for 31 units, and the implementation progress and coverage have reached the industry leading level. Over the past five years, the annual total emissions of SO2 and NOX have respectively decreased by 90% and 89.2%, over-fulfilling the emission reduction task of “The 12th Five-Year Plan”.

Technical Innovation During the period of “The 12th Five-Year Plan”, the

company assumed 6 projects of "863" Plan, and 12 national and provincial & ministerial-level scientific supporting projects; it gained the National Award for Science and Technology Progress for 2 times, made 98 industry level and provincial & ministerial-level scientific and technological achievements, and gained 576 authorized patents.

Company Governance During the period of “The 12th Five-Year Plan”, the

company added A shares and collected the fund of RMB 6.74 billion, and issued the corporate bonds of RMB 9 billion at low cost for three successive times. The company has been continuously listed in Top 250 Global Energy Companies, Top 100 Listed Companies in China, Top 100 Brand Value Companies, the Best Listed Companies of Investor Relations Management, Listed Companies with Best Investment Value during the Period of “The 12th Five-Year Plan”, and Listed Companies with the Most Social Responsibility, etc.

14

Review of “The 12th Five-Year Plan” Period（Ⅲ）


16



Year Plan” Period



15

In 2016, the macro economic growth will stably increase at a lower speed, and the year-on-year

growth rate of GDP is expected to be 6.5%; driven by economic transformation, the year-on-year growth

rate of total electricity consumption is expected to be 1%-2%.

In 2016, the incremental installed capacity will be 100GW, among which 52GW belongs to non-fossil

energy. At the end of the year, the national installed capacity will reach 1610GW, and the proportion of

non-fossil fuel capacity will be around 36%.

The annual utilization hours of power generation equipments is expected to be around 3700 hours in

2016, and that of coal-based power generation equipments is expected to be around 4,000 hours.

Monthly social electricity consumption and growth in 2013

Source: National Energy Administration

16

-4.00

-2.00

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

0

1000

2000

3000

4000

5000

6000

Total electricity consumption (100 million kWh) Year-on-year rate (%)

Macro-economy and Power Demand-supply Analysis

17

Trend of general average price of thermal coal with calorific value of 5,500 kcal at ports

in the Circum- Bohai - Sea Region from May, 2012 to March, 2016

The economic development of China is in a new normal, and new changes have taken place in coal

demand: Firstly, the economic growth has slowed down to a medium – high speed from high speed, and it

will be hard to reach the rate of over 10%; secondly, the economic structure has been deeply adjusted, the

second industry faces the pressure of de-capacity, and the third industry as the driving force of economic

development are growing fast; thirdly, energy consumption has turned to be renewable and low-carbon.

The market price of thermal coal has become historically low. Although the coal supply environment is

loose in general, the coal price will still maintain low; however, the declining space will be quite limited.

Meanwhile, there is also the possibility of price rising if the oversupply situation is reversed and the

excess capacity is eliminated through the greater efforts made by the government to weed out and shut

down the coal mines with backward production capacity.

Source: Qinhuangdao Coal Net

100

200

300

400

500

600

700

800

900

General average price of thermal coal with calorific value of 5,500 kcal at ports in the Circum- Bohai - Sea Region

Steady and Gradual Decrease in Coal Price

18

In March, 2015, Several Advices of State Council on Further Deepening the Power

System Reform (ZF [2015] No.9) was officially issued, starting a new round of

power market reform.

On November 30, 2015, the 6 supporting documents of power system reform were issued on

the same day: Practical Suggestions on Promoting the Reform of Transmission-Distribution

Price, Practical Suggestions on Promoting the power market Construction, Practical

Suggestions on Establishment and Standardized Operation of Electricity Trading Agencies,

Practical Suggestions on Orderly Releasing the Power Generation and Utilization Plan,

Practical Suggestions on Promoting the Reform of Marketing Electricity Side, and Guiding

Suggestions on Strengthening and Regulating the Supervision and Management of Power

Plants with Self-Provided Coal.

On December 1, 2015, National Energy Administration issued letters for asking for modification

suggestions of Basic Rules for power market Operation (Draft), power market Regulatory

Measures (Draft), and Basic Rules for Medium and Long Term Trading of Electricity (Draft).

Transmission-distribution price reform pilots: 18 provincial power grids including the power grids of Anhui, Ningxia, Yunnan, etc.

Comprehensive reform pilots: Yunnan, Guizhou, Shanxi

Electricity marketing reform pilots: Chongqing, Guangdong

In March, 2016, Beijing Electric Power Trading Center and Guangzhou Electric Power

Trading Center were formally founded.

On March 14, 2016, National Development and Reform Commission issued the Notice on Relevant Matters of

Expanding the Range of Transmission-Distribution Price Reform Pilots, to further expand the range of

transmission-distribution price reform pilots. The Notice stated that the 12 provincial power grids of Beijing,

Tianjin, South Hebei, North Hebei, Shanxi, Shaanxi, Jiangxi, Hunan, Sichuan, Chongqing, Guangdong, and

Guangxi, the power grids in pilot provinces of state electricity system reform, and those in north China would

be included in the range of transmission-distribution price reform pilots in 2016.

In 2016, the power

market reform

will be speeded

up and

strengthened

Steadily Promoting Power Market Reform

Source: China Electricity Council

20 19



Year Plan” Period



20

The thermal coal price will maintain at a

historically low level 1

The overall positive trend of economic

development in China will not be changed 2

The financing environment for corporate

will continue to be improved 5

The strong support from the parent company

will add new development momentum 6

The advantages of company’s ultra-low

emission renovation will come out 4

Obvious declining trend of

electric demand

Operating pressure caused by

the lowering of electricity price

Inevitable price competition

Increased pressure of energy

conservation and emissions

reduction

Unoptimistic business

situation of Non-power projects


The development prospect of clean

energy will be broader 3

Challenges and Opportunities for the Company in 2016

21

※Center on one main line

※Promote “five major advantages”

Cen

ter o

n o

ne

ma

in lin

e,

pro

mo

te “

five

ma

jor a

dvan

tag

es”

Taking “the establishment of updated version of

power generation industry” as the main line of the work

throughout the year, to consolidate and improve core

advantages of the company.

Promote the advantage of cost leading

Promote the advantage of clean energy development

Promote the advantage of technical innovation

Promote the advantage of professional control

Promote the advantage of talent guarantee

Corporate Operational Target in 2016


22

Optimize the industrial structure Optimize the power structure

Specific measures: optimize “four major structures”

Optimize the regional structure Optimize the equity structure

The overall development idea of the

company in the period of “The 13th

Five Year Plan” is: adhere to the value

thinking and benefit orientation, take

the improvement of the development

quality and efficiency as the core, the

establishment of updated version of

electric generation industry as the

main line, and technical innovation as

the momentum, to accelerate the

structural adjustment, realize the

high-efficient, clean and sustainable

development of electric generation,

and construct Datang Power as a well-

known integrated energy service

provider with outstanding core

competence and strong sustainable

developing ability.

Overall Development Idea and Specific Measures in the

Period of “The 13th Five Year Plan”


23

Thank You!

Annual Results 2015 - TodayIRSource: Corporate Annual Report 2015, IFRS In 2015, the company accrued...

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Transcript of Annual Results 2015 - TodayIRSource: Corporate Annual Report 2015, IFRS In 2015, the company accrued...