Corporate Presentation December 2013
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Transcript of Corporate Presentation December 2013
Corporate PresentationDecember 2013
2
China Gas Overview
Natural Gas Services Operator
Operates in 208 city concessions (including 11 city concessions owned by Fortune Gas, the acquisition of which was completed in Aug 2013) with 30-year monopolistic operating right each
Possesses intermediate and arterial gas pipeline networks of 44,400 km, serving more than 9.5 million household users and 56,900 industrial and commercial users
LPG The largest LPG retailer in PRC
Owns 8 LPG receiving terminals and 285,000 m3 of LPG storage capacity in PRC
Distributes LPG in 10 provinces such as Guangdong, Guangxi, Fujian, Zhejiang and Jiangsu
Owns 100% stake in Panva Gas which controls 450 self-owned retail stores and 120 franchised outlets located in provinces such as Jiangsu, Hubei, and Zhejiang.
Natural Gas- Business Model
Natural gas fields
Assets owned by the Group:
Main pipelines
Branch pipelines
Pressure regulating boxes
Switches
Processing stations
* Customers’ pipelines which are not owned by the Group are within the customers’ premises and are not highlighted in this diagram
National or provincial pipelines
City gate
Storage tanks(spherical or cylinder)
Residentialhouseholds*
Car refueling station Commercial users*
3
Natural gas business operates on a cost-plus pricing model
END-USER TARIFF COMPONENTS
ExplorationWellhead price
TransportationTransmission tariffs
DistributionDistribution cost + Return
NDRC Approval Local Price Bureau Approval
2 main sources of revenue Gas connection: one-off payment mainly from residential users, less so from industrial and commercial users Sale of piped gas: recurring income at tariffs approved by the local governments
4
Natural Gas Pricing System
Strongest growth
Most profitable
Currently owns:
208 CNG stations in 50 cities & 16 LNG stations in 4 provinces
5
CNG/LNG Refueling Stations
OPERATIONAL PERFORMANCE
29 new concessions since 1st April 2013 bringing the total to 208 city gas concessions as at 18 November 2013
New concessions won in Liaoning, Heilongjiang, Hubei, Inner Mongolia, etc.
Focus on industrial cities and customers, high volume users
More concessions, largest portfolio in China
7
New City Concessions Won
Natural Gas - Volume Growth
8
Tota
l sal
es v
olum
e (m
illio
n m
3 )
Period Volume Growth: City Projects
1HFY14 25.5%
1HFY13 21.6%
Period Volume Growth: Long-distance Pipelines
1HFY14 1.0%
1HFY13 35.9%
Natural Gas Volume- Customer Breakdown
9
Nat
ural
gas
sal
es v
olum
e (m
illio
n m
3 )
CustomerVolume Growth
in 1HFY14
% of Total Volume
1HFY14 1HFY13
Residential 37.8% 12.6% 10.5%
Industrial 10.7% 69.4% 71.8%
Commercial 16.5% 9.3% 9.1%
CNG Stations 16.1% 8.7% 8.6%
Natural Gas - Customer & Tariff
10
Customer
Growth
1HFY14Portfolio Total
1HFY13Portfolio Total
Change from 1HFY13Organic Acquired
Residential 850,438 308,101 9,597,530 7,805,544 23.0%
Industrial 226 26 2,407 1,895 27.0%
Commercial 3,485 1,117 54,497 46,735 16.6%
CNG Stations 44 10 224 153 46.4%
Customer Tariffs (ex-tax) (RMB / m3) 1HFY14 FY13 Change from FY13
Residential 2.30 2.18 5.50%
Industrial 2.57 2.45 4.90%
Commercial 2.66 2.48 7.34%
CNG Stations 2.88 2.73 5.52%
Natural Gas- Other Operational Data
11
1H FY14 1H FY13 1H FY12
Residential Connection Fee (RMB per customer) 2,548 2,459 2,437
Urban Population Covered (million) 70.0 65.0 62.5
Household Penetration Rate 44.5% 39.0% 34.8%
In Oct. 2012, NDRC issued the natural gas application policy, promoting the use of natural gas (CNG/LNG) for vehicles and vessels
The PRC’s “12th Five-Year Plan” for energy development published in Jan. 2013 indicates natural gas supply in China will surpass 260 billion m3 by 2015, increasing by 20% per year.
Strong government support
12
Policy Environment
NATURAL GAS PROJECT LOCATIONS
13
LPG
14
1H FY14 1H FY13 1H FY12
Sale tonnage (ton) 769,611** 411,011* 417,287
Gross Margin (%) +5.58% +5.50% +4.51%
Operating Margin (%) +0.32% -0.46% +1.56%
Largest downstream retailer of LPG in China
Shifting the LPG focus from wholesale to downstream business to improve overall profitability and cost efficiency
** Inclusive of the operation of Panva Gas, in which China Gas owns 100% interest
* Not inclusive of the operation of Panva Gas, in which China Gas owned 49% interest
15
FINANCIAL PERFORMANCE
Financial Summary - Income Statement
17
HK$ ('000) 1H FY14 % change 1H FY13
Turnover 10,461,324 46.4% 7,147,127
Gas Sales 4,295,503 41.3% 3,040,000
Connection Fees 2,012,163 63.6% 1,229,596
LPG Sales 4,150,525 44.5% 2,871,861
Other 3,133 -44.7% 5,670
Gross Profit 2,477,033 55.0% 1,598,546
EBITDA 2,469,391 46.6% 1,685,049
EBIT 2,145,517 50.4% 1,426,779
Profit after tax 1,484,676 59.1% 933,118
Profit attributable to owners of the Company 1,282,895 58.7% 808,200
Basic EPS (HK cents) 27.41 49.7% 18.31
Interim dividend per share (HK cents) 2.2 - 2.2
Financial Summary - Balance Sheet
18
HK$ ('000) 1HFY14 FY13
Total Assets 42,528,644 32,495,039
Total Equity 15,199,426 12,742,785
Shareholder's Equity 13,033,564 11,484,640
Cash 6,896,837 4,499,308
Short-term Bank Debt 8,308,312 8,445,193
Of which LPG trade finance related facilities 3,205,091 4,805,303
Long-term Bank Debt 10,509,062 6,355,830
Net Gearing Ratio* 57%* 43%*
* Net gearing ratio is computed based on total net borrowings (total borrowings less cash and trade finances in relation to LPG business) as a percentage of net assets
1HFY14 1HFY13
Gross Margin – Gas Sales 20.3% 20.3%
Gross Margin – Connection Fees 68.2% 66.2%
Gross Margin – LPG Sales 5.6% 5.5%
EBITDA Margin 23.6% 23.6%
EBIT Margin 20.5% 20.0%
Net Profit Margin 14.2% 13.1%
Average ROE 20.9% 15.9%
19
Financial Summary - Margins
GuidanceFY2014 - 2015
Enhance organic growth in existing city gas projects
Increase industrial and commercial customer connections as upstream supplies increase
Expand “Hub-Satellite City” investment program to add more concessions to our portfolio
Expedite the rollout of CNG and LNG stations for vehicles and vessels
Focus on higher margin retail LPG distribution
For the year ended March 31 FY2014 FY2015
Total piped gas volume (m3) 8.5 bn 10 bn
New residential connections 1.3 m 1.3 m
CNG stations 370 600
Downstream LPG sales (including Panva Gas) 900,000 tons 1.1m tons
21
FY2014 - 2015 Guidance
22
Statements in this presentation and handout that are not strictly historical are “forward-looking” statements. Forward-looking statements involve risks and uncertainties, including, but not limited to, continued acceptance of the Company’s product and services in the marketplace, competitive factors, new products and technology changes, the Company’s dependence upon third party suppliers and other risks detailed from time to time in the presentation, handout and other related documents. All the directors of China Gas jointly and severally accept full responsibility for the accuracy of the information contained in these materials and confirm, having made all reasonable inquiries, that to the best of their knowledge, opinions expressed in these materials have been arrived at after due and careful consideration and there are no other facts not contained in these materials, the omission of which would make any statement in these materials misleading. The materials and information in the presentations and other documents are for informational purposes only, and are not an offer or solicitation for the purchase or sale of any securities or financial instruments or to provide any investment service or investment advice.
DISCLAIMER