Towngas Smart Energy Company Limited · HKEX:1083
Towngas Smart Energy — Towngas China Company — H1 2013 Earnings Presentation
29 slides from Towngas Smart Energy's earnings presentation, August 2013
Slide 1: 2013 Interim Results Roadshow Presentation
Towngas China Company Limited Ops EUOo TT! = fis yo ee — EX e. ? 0... < a8 BO > 2013 Interim Results 4, Roadshow Presentation
Slide 2: looking statements. These forward-looking statements reflect the company’s
This presentation and subsequent discussion may contain certain forward- looking statements. These forward-looking statements reflect the company’s view on some future events and involve known and unknown risks and uncertainties and other factors which may cause actual performance and development di
Slide 3: 1. Business Environment 2. Company Overview 3. Financial and Operational Performance
1. Business Environment 2. Company Overview 3. Financial and Operational Performance 4. Future Outlook 3 3
Slide 4: Business Environment
o A change of central government o A decelerating GDP growth (Q2 2013: 7.5%) o A sign of property market recovery o A weak manufacturing & export o A frightening PM2.5 smog o A most depressed commodity market o A nationwide natural gas price reform o Inflation harnessed (Jul 2013: 2.7%) o Unemployme
Slide 5: Business Environment (continued)
o Urbanization continues on o A rising cost of labour & an appreciating RMB (2013 2.3%) o A persisting liquidity crunch o An over production capacity situation o A westward-shift in economic development o A high level directive to suppress bribery 5
Slide 6: Company Overview
Company Overview
Slide 7: Projects covering provincial regions
Heilongjiang projects covering Jilin Liaoning provincial regions Hebei Piped city-gas Shandong City-gas Anhui Jiangsu Midstream Zhejiang Sichuan Chongqing 11 new city-gas (2013) Jiangxi Hunan Fujiang As at July 2013 Guangxi Guangdong 7
Slide 8: 11 new city-gas projects
City-gas 11 projects 1 Feicheng 肥城 6 Chaozhou Fengxi 潮州楓溪 Heilongjiang 2 Maanshan Zhengpugang 77 Bozhou 亳州市 馬鞍山鄭浦港 Jilin 8 Cangzhou Yanshan 滄州鹽山縣 Liaoning 3 Mianzhu 綿竹 99 Cangzhou Cang County 滄州滄縣 Hebei 9 4 Boxing 博興 10 Cangzhou Mengcun 滄州孟村 10 10 8 4 1 Shandong 5 Wuhu Fanchang 蕪湖繁昌縣 11 Dafeng 大豐市 H
Slide 9: Growth in number of projects and injection from HKCG
2006 2007 2008 2009 2010 2011 2012 1H2013 25 37 40 47 61 66 74 84 90 Injection from HKCG 80 11 New 70 Existing 8 5 60 6 50 8 7 40 3 73 30 10 61 66 2 47 20 37 40 10 25 25 0 2006 2007 2008 2009 2010 2011 2012 1H2013 1H2013: Jinan Jihua & Shandong Jihua combined. 2012: include Liaoning Wafangdian midst
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Slide 11: 1H2013 Highlights
o Strong profit growth of 49% to HK$533Mn o Excluding exchange gain profit grew by 23% o Increase in average gas selling price and volume help gas revenue growth of 24% over last year o Gas sales volume grew by 13% to 2.9Bn m³ o 84 JVs in total, 11 city-gas projects added 11
Slide 12: Turnover and Profit attributable to shareholders
(HK$Mn) 1H12 1H13 Change Gas Sales 1,929 2,394 +24% Connection Fees 508 568 +12% Turnover 2,437 2,962 +22% Profit attributable to 357 533 +49% shareholders Basic EPS (HK cents) 14.51 20.51 +41% 12
Slide 13: Financial position
(HK$Mn) 2012Y.E. 1H13 Change Total Assets 21,255 23,471 +10% Total Liabilities 9,968 10,668 +7% Total Equity 11,287 12,802 +13% Gearing Ratio* 18.6% 17.7% Note: * Definition of Gearing Ratio: Net Debt excluding HKCG loans (“ND”) to equity attributable to shareholders plus ND 13
Slide 14: All JVs shared equity basis turnover and profit
1H12: 1H13: HK$ 4.7Bn HK$ 5.4Bn 4% 5% Piped-gas 14% 14% Connection Fee 81% Others 82% (HK$Mn) 1H12 1H13 Change Total Turnover 4,747 5,435 +14% JV profit contribution 478 577 +21% Improvement Profit margin ratio 10.1% 10.6% in margin Exchange difference (17) 74 NA Administration expenses (42) (56) +3
Slide 15: Gas Sales Volume
(Bn m³) 1H12 1H13 Change Industrial 1.44 1.65 +15% Commercial 0.47 0.50 +18% Residential 0.68 0.78 +14% Total 2.59 2.93 +13% 5.3 5 4.7 Gas Sales Volume (Bn m³) 4.0 4 3.2 3 2.93 2.7 2.59 2.1 2 1.3 1 0 2006 2007 2008 2009 2010 2011 2012 1H12 1H13 *All JVs (100%) 15
Slide 16: Gas sales volume on equity basis
All Equity Basis Volume (Mn m3) 1H12 1H13 Change Subsidiaries 664 766 +15% JCEs & Associates 1,322 1,546 +17% Chengdu JV 609 616 +1% Total 2,595 2,928 +13% Excluding Chengdu 1,986 2,312 +16% 16
Slide 17: Net Profit
1000 800 841 709 Net Profit (HK$Mn) 600 533 400 436 200 265 357 202 145 0 HKCG became a major -200 -256 shareholder in 2007 -400 2006 2007 2008 2009 2010 2011 2012 1H13 17
Slide 18: Natural gas price reform - Mainland Utilities
Mainland Utilities o Effective July 10 o Affect non-residential consumption o Gate-prices split into EVP and AVP o EVP: current gate-price +Rmb0.4/m³ o AVP: current gate-price +Rmb1.28/m³ o EVP volume = gas volume consumed in 2012 o 69% JVs affected o Action taken: • work closely with local governme
Slide 19: Market Capitalization
Historical high on 3 June 2013 24.0 HK$21.4Bn 21.0 Market Capitalization (HK$Bn) 18.0 15.0 12.0 9.0 6.0 3.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug 2012 2013 *Bloomberg 19
Slide 20: Gas Sales Volume Mix and Number of Customers
Gas Sales Volume Mix (%) No. of Customers Residential Commercial Industrial Customers No. (LHS) Gas Volume/Employee No. (RHS) (Mn) 294 (‘000 m³) 26% 10 278 300 26% 56% 57% 8 250 18% 17% 6 200 8.0 1H12 1H13 7.0 4 150 2 100 1H12 1H13 * All JVs (100%) 20
Slide 21: January 2013 share placement
16 January 2013 No. of share placed Net Proceeds raised Over-subscription 21
Slide 22: Shareholding structure
1 January 2013 31 July 2013 66.18% 62.31% 31.66% 20% 5.87% 7.95% 6.03% Commonwealth Enerchina Institutional Hong Kong Commonwealth Institutional Hong Kong Bank of (622 HK) & Retail Investors & China Gas Bank of & Retail Investors & China Gas Australia (3 HK) Australia (3 HK) 22
Slide 23: Company group structure
Henderson Land Development Company Ltd (12 HK) & Dr. Lee Shau Kee 41.50% Hong Kong and China Gas Company Ltd (3 HK) 62.31% Towngas China Company Limited (“TCCL”) (1083 HK) 23
Slide 24: Future Outlook
Future Outlook
Slide 25: China natural gas demand 2015 vs 2010
300 260 250 2015 vs 2010 230 Power Generation & 200 Chemical Engineering 85 108% Bn m3 Total 150 108 100 City-gas & Industrial 41 145 114% 47 50 67 117% 25 0 2000 2005 2010 2015 (Source：BP / Guangdong Oil & Gas Association ) 25
Slide 26: Increasing natural gas supplies
o Increasing natural gas supplies: - W2E2 - W2E3 - Myanmar pipeline - Russia Eastern Pipeline o China remains a manufacturing country o Increase in urbanization rate: Urbanization rate: 47.5% 53.4% 57% 70% Year: 2010 2013 2020 2035 o Increasing housing supply: 2011-2015 36 Mn Subsidized home 2013 6.
Slide 27: Mainland China Energy Update: An Immense National Grid
Mainland China Energy Update An Immense National Grid A A Heilongjiang 2 6 Jilin 3 Xinjiang Liaoning 1 Beijing Inner Mongolia NG Source Commissioning Year Capacity Hebei Shanxi 1 Ningxia West to East 1 2004 17 Bn m3 Qinghai Shandong Gansu 2 West to East 2 2011 30 Bn m3 Jiangsu Shaanxi Henan 3 Centra
Slide 28: Target: 10 new projects / year
Mainland Utilities Heilongjiang Jilin Beijing Liaoning o Target: 10 new projects / year Inner Mongolia Hebei o Penetration into neighboring cities Shandong Shaanxi Henan Anhui Jiangsu o Focusing in new territories: Sichuan Hubei Inner Mongolia Chongqing Zhejiang Guizhou Hunan Fujian Guizhou Jiangxi
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Towngas China Company — H1 2013 Earnings Presentation on 6ix