Enn Energy Holdings Limited · HKEX:2688
Enn Energy — H1 2019 Earnings Presentation
29 slides from Enn Energy's earnings presentation, Aug 23, 2019
Slide 1: 2019 Interim Results
2019 Interim Results Company Presentation 23 August 2019
Slide 2: Contents
Contents 1. Operational Review 2. Financial Review 3. Development Strategies 4. Appendix
Slide 3: Highlights of 1H19 Results
Highlights of 1H19 Results Core Profit up 14.4% to RMB2,734 million Steady Growth of Gas Sales and Integrated Energy Business Newly-added 34 City-gas & IE Projects to Accelerate Business Growth Operating Cash Flow Grew Strongly by 124.9% to RMB4,294 million 2
Slide 4: Growing Customer Base
Growing Customer Base 1H2019 1H2018 Change New C/I Customers Development (site) 12,110 10,764 +12.5% Accumulated C/I Customers (site) 133,209 102,643 +29.8% Newly Installed Designed Daily Capacity for C/I Customers (m³) 8,637,801 8,228,222 +5.0% Accumulated Installed Designed Daily Capacity for C/I
Slide 5: Robust Volume Growth
Robust Volume Growth Total Natural Gas Sales Volume Retail Gas Sales Volume Breakdown million m3 (million m3) 1H2019 1H2018 Change 13,204 Industrial & Commercial 7,289 6,264 16.4% Residential 1,887 1,614 16.9% 11,062 Vehicle Refuelling Stations 593 613 (3.3%) C/I Gas Sales accounted for 74.6% 15.1%
Slide 6: Dollar Margin Analysis
Dollar Margin Analysis ASP & Gas Cost (RMB/m3) 1H2019 2H2018 1H2018 Residential 2.76 2.71 2.65 1. Some of the government subsidies on gas fee for rural households have not been Commercial & Industrial 3.29 3.12 3.07 distributed yet 2. The share of vehicle & commercial gas sales Vehicle Refuelling St
Slide 7: Continuous Expansion of City-gas Concessions
Continuous Expansion of City-gas Concessions ➢Acquired 14 new projects & 3 new concessions nearby existing projects in 1H2019 ➢The Group managed 201 city-gas projects in China with a total population coverage of 99.95 million ➢Average gas penetration rate of 59.4% Connectable Provinces New Projects
Slide 8: IE Business Shown Exponential Growth
IE Business Shown Exponential Growth (RMB mil) 1H2018 1H2019 Revenue 369 2.76x 1,019 ➢ Same level as the revenue in FY2018 ➢ Utilization rate increased Gross Profit 28 7.36x 206 ➢ Contribution from planning and designing IE solutions ➢ More high-quality projects were put into operation Projects in O
Slide 9: IE Business Development Adapting to Local Conditions
IE Business Development Adapting to Local Conditions Obtained more integrated energy distribution rights (incl projects in operation & under construction) Total Energy Demand >30 bil kWh IE Projects In Operation Under Construction 119 82 37 Based on local conditions, utilizing the most competitive c
Slide 10: Geographical Coverage of Energy Distribution Business
Geographical Coverage of Energy Distribution Business Heilongjiang 1 Jilin Northeast Area Inner Mongolia1 The Greater Bay Area Liaoning ➢ Opportunities from “use of clean ➢The central government proposed to coal" policy optimize energy structure Beijing 5 ➢ New gas sources brought by China- ➢The gas
Slide 11: Value-added Services
Value-added Services C/I Customers ➢ Energy experts provide energy-saving technologies and Case Study retrofitting services for customers Enhance customer’s energy consumption and production efficiency Encourage energy consumption, new customer development Value-added services and sales of products
Slide 12: Technological Innovation to Drive Business Growth (Case 1)
Technological Innovation to Drive Business Growth Case 1: Coal-to-gas Project for a Ceramic Producer (Quanzhou ENN in Fujian) ➢ Redesigned burning process and replaced coal-boiler with gas-fired hot air oven to improve ignition efficiency ➢ Works well in the case of discontinuous operation of cerami
Slide 13: Technological Innovation to Drive Business Growth (Case 2)
Technological Innovation to Drive Business Growth Case 2: Industrial Waste Heat Recycled Project (Jieshou ENN in Anhui) ➢ ENN energy experts proposed an innovative business model and provided retrofitting services, to better utilize lower-cost heat resources available in the industrial park ➢ Helped
Slide 14: Contents
CONTENTS 1. Operational Review 2. Financial Review 3. Development Strategies 4. Appendix
Slide 15: Solid Results Achieved
Solid Results Achieved （RMB million） 1H 2019 1H 2018 Change Key Financial Highlights Revenue 35,344 26,530 33.2% Gross Profit 5,598 4,662 20.1% EBITDA 5,584 4,695 18.9% Profit attributable to Shareholders of the Company 3,362 1,782 88.7% Basic EPS (RMB) 2.99 1.64 82.3% Core Profit* 2,734 2,389 14.4%
Slide 16: Solid Results Achieved
Solid Results Achieved ➢ Expanded business scale with all business segments ➢ Strong Gross Profit Growth and Modified Business Mix growing steadily +20.1% Revenue (RMB million) 1H 2019 1H 2018 Change +160 -154 5,598 +436 Retail Gas Sales 20,332 16,301 24.7% +178 Construction Wholesale Sales of Integ
Slide 17: Strong Balance Sheet & Liquidity
Strong Balance Sheet & Liquidity (RMB million) As of 30 June 2019 As of 31 December 2018 Change Cash on Hand 7,742 7,923 -2.3% Total Debt 19,181 20,249 -5.3% - Short-term 8,303 11,561 -28.2% - Long-term 10,878 8,688 25.2% Net Gearing Ratio 40.8% 48.2% -7.4ppt Net Debt/EBITDA 1.0x 1.3x -0.3x Rating A
Slide 18: Healthy Debt Structure
Healthy Debt Structure Foreign Currency Exposure Management Fixed Rate Dominated Debt Structure Breakdown by Currency – Long-term USD Debt 2019 RMB Depreciation Cash Impact Non-cash Impact Sensitivity Analysis 1% RMB1.3 million RMB 63 million 1H2019 2018 2017 Avg. Effective ➢ USD bank loans can be r
Slide 19: Capital Allocation and Cash Flow
Capital Allocation and Cash Flow Growth CAPEX to Support Strategic Development Strong Growth of Cash Flow (RMB million) (RMB million) 4,616 86.8% 3,364 3,384 2,471 *The RMB62 million (before tax) - dividend from Sinopec Marketing for 1H2019 was received in July 2019. 18
Slide 20: Content
Content 1. Operational Review 2. Financial Review 3. Development Strategies 4. Appendix
Slide 21: Challenges and Opportunities in 2H19
Challenges and Opportunities in 2H19 Challenges 1. Economic slowdown 2. Upstream Gas Price Hike 3. Intensified Competition in Integrated Energy Business Opportunities • With an increasing demand for clean, economic and efficient energy, the Customer change from passive acceptance to active deploymen
Slide 22: Key Measures to Achieve FY19 Performance Guidance
Key Measures to Achieve FY19 Performance Guidance Develop New Customers Proactively Ensure Growth of Natural Gas Sales Volume & Profitability ➢ Fully implement digital management and operation, analyze ➢ Strengthen business development, conduct “coal-to-gas” customer energy consumption data, identif
Slide 23: Contents
CONTENTS 1. Operation Review 2. Financial Review 3. Development Strategies 4. Appendix
Slide 24: ENN - One of the First Privately Owned Clean Energy Distributors in China
ENN - One of the First Privately Owned Clean Energy Distributors in China Company Overview ➢ Established in 1993, ENN is one of the leading privately-owned clean energy distributors in the PRC ➢ ENN’s principal business includes sale and distribution of piped gas, investment in, and the operation an
Slide 25: Typical Industrial Park IE Project - Cash Flow Projection
Typical Industrial Park IE Project - Cash Flow Projection 1. Stable & Recurring Income • Integrated energy solutions reduce customers' overall energy bills 10% • Selling the types of energy customer need increases their stickiness Cash flow break-even 2. Rapid Cash Flow Generation • Capex are inves
Slide 26: Gas Delivery Process
Gas Delivery Process Vehicle & ship gas users 25
Slide 27: Simplified Model for a Typical City-gas Project
Simplified Model for a Typical City-gas Project Revenue/Cost Cash flow break-even ➢ Connection fee dominates in early years when the project companies are signing up new customers ➢ Gas usage increases as projects mature, becoming the major source of recurring income ➢ Prior to the completion of the
Slide 28: Latest Benchmark City-gate Price
Latest Benchmark City-gate Price Province From 25 May 2018 From 1 April 2019 Province From 25 May 2018 From 1 April 2019 Unit: RMB/m3 (Incl. VAT) Henan 1.89 1.87 Beijing 1.88 1.86 Hubei 1.84 1.82 Tianjin 1.88 1.86 Hunan 1.84 1.82 Hebei 1.86 1.84 Guangdong 2.06 2.04 Shanxi 1.79 1.77 Guangxi 1.89 1.87
Slide 29: Disclaimer and Investor Relations Contact
Disclaimer The information provided to you in this presentation does not constitute or form part of any offer for subscription or sale of, or solicitation of any offer to subscribe for or sale of any securities of ENN Energy Holdings Limited (the "Company") nor shall it form the basis of, nor can it