Towngas Smart Energy Company Limited · HKEX:1083
Towngas Smart Energy — FY2023 Earnings Presentation
28 slides from Towngas Smart Energy's earnings presentation, Mar 19, 2024
Slide 1: FY2023 Annual Results
Towngas Smart Energy Company Limited (1083.HK) FY2023 Annual Results 19 March 2024 1
Slide 2: 2024: Embarked on Burgeoning Beginnings
2024: Embarked on Burgeoning Beginnings Value creation in tough time by a team with strong spirit Rising interest rate pressure End of rate rise cycle Business restructuring, cost-saving & efficiency enhancement Recovery of oil & gas Falling price volatility demand Gas supply chain business in full
Slide 3: 2023 Business Highlights
2023 Business Highlights City Gas Renewable Energy Gas Sales Volume Accumulative 16.5 billion m³ 8% 124 Zero-carbon Industrial Parks 44 PV City Gas Projects Contracted: 3 GW 1.6 GW 187 projects 4 Grid-connected: 1.8 GW 1.2 GW Customers Power Generation Volume: 16.77 million 0.84 million 0.94 billion
Slide 4: Natural Gas and PV Demand Outlook
Natural Gas and PV Demand Outlook China’s Natural Gas Demand Outlook by 2040 China’s Installed PV Capacity Outlook by 2030 National Natural National Cumulative Gas Consumption Installed PV Capacity （Unit: billion m3) (Unit: GW) ~ 5% - 6% ~ 2% - 3% 33% 19% (CAGR) (CAGR) (CAGR) (CAGR) 2,552 700.0 550.
Slide 5: Agenda
AGENDA Financial Highlights P. 6 Business Review ▪ Gas Business P. 9 ▪ Renewable Energy P. 15 ESG P. 22 Group Outlook and Business Guidance P. 24 5
Slide 6: Financial Highlights
s235 AREA BRAG Towngas Smart Energy Company Limited Financial Highlights
Slide 7: FY2023 Annual Results
FY2023 Annual Results RMB exchange rate: -5% (Unit: HK$ million) 2022 2023 Changes Revenue 20,073 19,842 1% Operating Profit (RMB million) 1,469 1,733 18% Operating Profit 1,714 1,919 12% Gas Business Net Profit 1,833 1,841 0% Renewable Energy Net Profit (119) 78 Not applicable Corporate Financial E
Slide 8: Healthy Financial Position
Healthy Financial Position (Unit: HK$ billion) 31 Dec 2022 31 Dec 2023 Total Assets 52.9 53.5 Net Assets 23.9 25.2 Cash and Bank Balances 4.0 4.2 Total Borrowings 19.7 18.3 Net Gearing Ratio 39.7% 35.8% Capex 3.4 6.6* Credit Rating: BBB+ Baa1 AAA *Note: Including accounts payable 8 Towngas Smart Ene
Slide 9: Business Review: Gas Business
Business Review ▪ Gas Business ▪ Renewable Energy 9
Slide 10: Gas Sales Volumes Above National Growth with Stable Gas Sales Mix
Gas Sales Volumes Above National Growth with Stable Gas Sales Mix Gas Sales Volume (Unit: billion m3) 8%* 16.46 15.25 8.33 50% Industrial 7.85 51% Commercial 1.79 11% 1.65 11% Residential 3.02 20% 3.07 19% Wholesale and Others 2.73 18% 3.27 20% National natural gas consumption 2023: 394.5 billion m3
Slide 11: Rising Gas Margin
Rising Gas Margin Selling Price, Cost and Dollar Margin Dollar Margin (Unit: RMB/m3) 2022 2023 Changes • Upstream volume control and price increase, and resilient procurement of LNG and unconventional gas Residential 2.71 2.78 +0.07 • Cost pass-through mostly completed for non-residential, and 75% c
Slide 12: Connection Business Revenue
Connection Business Revenue Connection revenue decreased by 17% YoY* amid Unleashing uncharted potential sluggish real estate market to improve gross unit margin Number of household connections decreased YoY • Collaborate with government to promote （Unit: Million） “cylinder to pipeline” User Type 20
Slide 13: Gas Supply Chain - Coordination & Ensurance of Gas Supply and Cost Reduction
Gas Supply Chain - Coordination & Ensurance of Gas Supply and Cost Reduction • In 2023, the Group and its Parent Company had coordinated gas supply of 3.48 billion m3 (9.7% of the total gas volume) and saved RMB0.32 billion • 2027 targets: gas supply coordination to exceed more than 10% of the Group
Slide 14: "Gas+": Business Continues to Grow with Focus on Public Institutions
“Gas+”: Business Continues to Grow with Focus on Public Institutions Ignite Activation & Rapid Development Build a high-dimensional ecosystem, and to make it scalable in more cities Offer Customized Solutions Revenue Increased Greatly (Unit: No. of projects) (Unit: RMB million) 346 410 180 129% 166
Slide 15: Business Review: Renewable Energy
Business Review ▪ Gas Business ▪ Renewable Energy 15
Slide 16: Ride on Green Energy Transformation & Enhance Strategies
Ride on Green Energy Transformation & Enhance Strategies Challenges Strategies • Difficult business environment amid 1. Utilize Mainland China low weak economy financing cost • Increasing financing costs drive down • Annual PV investment: 1GW investment returns • Sourcing additional capital, enlarge
Slide 17: Profit Realised & Rapid Growth
Profit Realised & Rapid Growth (Unit: HK$ million) 2022 2023 BU Profit Contribution Converting contract into physical PV Power Generation & Services* -16 183 grid-connection Energy & Carbon Management Rising profit in carbon management 8 36 Services** and electricity trading Net Profit -119 78 +197
Slide 18: Leading Grid-connected Growth Rate
Leading Grid-connected Growth Rate Operational Data 2022 2023 Contracted (GW) 1.4 3.0 Grid-connected (GW) 0.55 1.8 Share of Assets 85% 78% PV Generation (billion kWh) 0.14 0.94 Electricity Selling Price (RMB/kWh) 0.610 0.626 Gross Profit (RMB/kWh) 0.335 0.346 18 Towngas Smart Energy Limited | 2023 A
Slide 19: PV Power Generation and Services: Power Generation Volume Doubles
PV Power Generation and Services: Power Generation Volume Doubles and Contributions from Rising Profit in PV Services in 2024 (Unit: HK$ million) 200 183 Market leader: Industrial distributed grid- 1 connection exceeds 1GW per annum 150 +200 Grid-connected projects to bring +200 2 100 significant pr
Slide 20: Energy & Carbon Management Services
Energy & Carbon Management Services: Provide Carbon Management and “PV Storage & Sales” Services for PV and City Gas Customers (Unit: HK$ million) Favorable policies and strong 40 36 1 demand for carbon management 35 services drive profit exceeding 30 RMB10 million +350% 25 The robust business growt
Slide 21: Zero-carbon Parks: Foundation & Driving Force for Strong Business Growth
Zero-carbon Parks: Foundation & Driving Force for Strong Business Growth 124 Zero-carbon Industrial Parks Core Competitiveness (44 Newly Increased) High-return PV High-quality energy and • Market scale: 18GW • Electricity consumption scale: 200 billion kWh/year development carbon services High-stand
Slide 22: ESG
ESG s235 AREA BRAG Towngas Smart Energy Company Limited 22
Slide 23: 2023 ESG Performance
2023 ESG Performance Rating Responded to TCFD and disclosed climate risk-related 2022 2023 financial information Included in FTSE Russell Pioneering response to TNFD with risk Social Responsibility Index constituent for the first time 2.7 3.0 assessment incorporating biodiversity Excellent performan
Slide 24: Group Outlook and Business Guidance
Group Outlook and Business Guidance 24
Slide 25: 2024 Group Outlook
2024 Group Outlook • Develop industrial customers for new energy and accelerate the “Gas+” energy business Mainland Gas Business • Strengthen gas sources and price pass-through • Enter into long term contract with the “Three Majors” to increase additional gas supply to 14 billion m3 • Diversify gas
Slide 26: 2024 Business Guidance
2024 Business Guidance City Gas Renewable Energy Gas Sales Volume* Accumulated PV Grid-connected Capacity 17.8 billion m3 8% 2.8 GW 1 GW Customers 17.57 million 0.8 million Power Generation Volume Dollar Margin 1.9 billion kWh 1x 0.51 RMB/m3 *Note: City Gas Sales Volume 26 Towngas Smart Energy Limit
Slide 27: Thank You
s235 AREA BRAG Towngas Smart Energy Company Limited THANK YOU
Slide 28: Disclaimer
Disclaimer This presentation and corresponding discussion may contain certain forward-looking statements, including statements regarding our intent, belief or current expectations with respect to Towngas Smart Energy’s businesses and operations, market conditions, results of operation and financial
Towngas Smart Energy Company — FY2023 Earnings Presentation on 6ix