Enn Energy Holdings Limited · HKEX:2688
Enn Energy — H1 2020 Earnings Presentation
34 slides from Enn Energy's earnings presentation, Aug 20, 2020
Slide 1: 2020 Interim Results
2020 Interim Results Company Presentation 20 August 2020
Slide 2: Interim Results Highlights
Interim Results Highlights Retail Gas Sales Volume Up 4.0% to 10.16 bil m3 Added C/I Customers with 6.56 mil m3 Installed Designed Daily Capacity & 1,025,000 New Residential Customers Added 12 City-gas & 10 IE projects Expanded Operational Areas Core Energy Sales Business Grew Steadily Gross Profit
Slide 3: Dedicated to Corporate Social Responsibility
Dedicated to Corporate Social Responsibility Made every effort to fight against COVID-19 and ensured Facing of flood, stuck to the position and won the trust of normal livelihood of people customers and local communities All-rounded protection for employees Provided employees with workplace disinfec
Slide 4: Continuously Improving ESG Performance and Management
Continuously Improving ESG Performance and Management, Reducing Energy Consumption & Carbon Footprint for Society Proactively communicated ESG performance with capital markets, Proactively improved the management of carbon emission, disclosure gradually align with international standard environment
Slide 5: Contents
Contents 1. Operational & Financial Review 2. Outlook & Strategy 3. Q&A
Slide 6: Stable Volume Growth
Stable Volume Growth Total Natural Gas Sales Volume Retail Gas Sales Volume Breakdown (million m3) (million m3) 1H2020 1H2019 Change 16,000 4.8% Commercial & 7,613 7,200 5.7% Industrial 13,832 14,000 13,204 Residential 2,139 1,976 8.2% 3,669 12,000 3,435 Vehicle Refuelling Stations 411 593 -30.7% 10
Slide 7: Growing C/I Customer Base
Growing C/I Customer Base ➢ Promoted “Bottled LPG to Piped Gas”, actively communicated with local governments to obtain relevant policies and subsidies, the proportion of those new customers increased ➢ Leveraging on low-cost gas resources and interconnecting surrounding pipeline networks, actively
Slide 8: Growing Residential Customer Base
Growing Residential Customer Base ➢Accelerated new customers development and construction ➢Took advantage of the opportunities brought about by the government’s initiatives to transform old urban residential areas, mitigate impact from communities lockdown during the epidemic ➢The urbanisation rate
Slide 9: Continuous Expansion of City-gas Concessions
Continuous Expansion of City-gas Concessions ➢Acquired 12 new projects with an incremental population coverage of 2.17 million ➢The Group managed 229 city-gas projects in China with a total population coverage of 108 million ➢ Average gas penetration rate of 61.2% Provinces Projects Population Ganyu
Slide 10: Expanded Dollar Margin
Expanded Dollar Margin ASP & Gas Cost 1H2020 1H2019 2019 (RMB/m3) Residential 2.83 2.76 2.83 Commercial & 1. ASP RMB 0.43/m3 due to cost pass through 2.77 3.29 3.14 Industrial 2. Reduced customers‘ energy consumption cost Vehicle Refuelling 3.51 4.08 3.93 Stations ASP 2.81 3.24 3.14 Average Cost 2.
Slide 11: Diversified Resources Planning Enhanced Competitiveness & Boosted Gas Sales
Diversified Resources Planning Enhanced Competitiveness & Boosted Gas Sales 1. Took advantage of low international LNG prices and increased imports ➢ A total of 1.08 million tons of LNG imported in 1H2020, Overseas LNG significantly reduced the average gas procurement cost Unconventional ➢ Zhoushan
Slide 12: IE Business
IE Business (RMB million) 1H2019 1H2020 ➢ Including JV & Asso Revenue 1,019 X2.06 2,101 Total revenue was RMB3.17 bil ➢ Energy sales volume significantly increased 】 ➢ Utilisation rate improved Gross Profit 206 X2.00 411 ➢ Gross profit margin improved due to lower gas price ➢ More quality projects w
Slide 13: Value Added Business
Value Added Business (RMB million) 1H2019 1H2020 ➢ COVID-19 reduced home services Revenue ➢ “Gratle” gas appliances sales dropped due to COVID-19 1,037 663 ➢ In-house energy experts provided energy saving services, reduced costs Gross Profit 659 566 ➢ The proportion of revenue generated by provision
Slide 14: Solid Results Achieved
Solid Results Achieved (RMB million) 1H2020 1H2019 Change Key Financial Highlights Revenue 31,543 35,344 -10.8% Gross Profit 5,602 5,598 0.1% EBITDA 5,407 5,152 4.9% Profit Attributable to Shareholders 2,693 3,362 -19.9% Core Profit* 3,112 2,734 13.8% Basic Core EPS (RMB) 2.77 2.43 14.0% *Core profi
Slide 15: Solid Results Achieved
Solid Results Achieved ➢The decrease of natural gas price led to lower sale price which affected the revenue of retail gas sales and wholesale of gas, but gross profit rose 9.4% and 257.9% yoy, respectively ➢Benefited from the utilization rate increase in existing projects and the incremental energy
Slide 16: Superior Financial Management
Superior Financial Management CAPEX (RMB mil) AR & Turnover Day (RMB mil) 3,384 2,695 356 2,860 2,306 650 460 310 14 days 2,378 2,090 13 days 1H2019 1H2020 1H2019 1H2020 Gas Projects IE Business Project Acquisition Within 90 days Turnover Day More than 90 days Net Gearing & Net Debt/EBITDA (RMB mil)
Slide 17: Cash Flow Analysis
Cash Flow Analysis ➢ As business activities resume normal, OCF & FCF in 2H20 will continue to show strong growth RMB (million) Core businesses continue Continue to to grow Generate Positive Free Cash Flow Less payment for construction works • Advance from done in 1H20 customers & payables will b
Slide 18: Ample Financial Resources & Liquidity
Ample Financial Resources & Liquidity Debt Structure by Currency Foreign Currency Risk Exposure Management – Long-term USD Debt ➢ Interest rate of bank loans was lowered in 1H20, some 33% 25% project companies obtained loans with preferential rates 1H2020 2019 2018 Change 33% Avg. effective 3.42% 3.
Slide 19: Contents
Contents 1. Operational & Financial Review 2.Outlook & Strategy 3. Q&A
Slide 20: Outlook
Outlook ➢ GDP rebounded from 6.8% contraction in 1Q to 3.2% growth in 2Q. It is expected to continue to grow in 2H20 and return to the level before the pandemic; ➢ Exports rose 10.4% year on year in July; Macroeconomic ➢ The Chinese government has determined a new pattern of development driven by“du
Slide 21: Continue to Drive Business Growth
Continue to Drive Business Growth ✓ Seize the opportunity of national energy conservation and emission reduction, industrial transfer and energy utilization upgrading, and speed up business ✓ Grasp the opportunity of industry development development， tap the potential of customers, focus on market o
Slide 22: Enhance Digital Capabilities
Enhance Digital Capabilities ✓ Expand online services accessibility, ✓ Utilise big data to recognize diversify interaction channels with resource changes in real time, customers flexibly adjust resources ✓ Provide tailor-made services to procurement strategy to reduce customers through digitalised S
Slide 23: 2020 Guidance
2020 Guidance Proactive New Customers Development Ensure Volume and Quality of NG business Growth New C/I development of at least 18mil m3 daily installed capacity Volume growth at least 10% New residential development of at least 2.3mil households Dollar margin up 2 cents 20-30 new city-g
Slide 24: Q&A
Q&A
Slide 25: ENN – To Build an Industry-leading Integrated Energy Service Provider
ENN – To Build an Industry-leading Integrated Energy Service Provider 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 and ma
Slide 26: Geographical Coverage of Energy Distribution Business
Geographical Coverage of Energy Distribution Business Heilongjiang 2 Jilin Inner Mongolia Northeast Area 2 Liaoning ➢ Opportunities from “use of clean Beijing 6 coal" policy ➢ New gas sources brought by China- 1 Tianjin Russia Line; Biomass resources Hebei1 The Greater Bay Area ➢ A huge market for c
Slide 27: Develop IE Business Adapting to Local Conditions
Develop IE Business Adapting to Local Conditions Obtained more integrated energy distribution rights (incl projects in operation & under construction) Total Energy Demand In Operation Under Construction Total IE Projects ~34.4 bil kWh 108 23 131 Adapting to local conditions, utilize the most competi
Slide 28: Value Added Services Focusing on Customer Demand
Value Added Services Focusing on Customer Demand Focus on customer demands through the innovation of one-stop energy butler and housekeeper service model, to enhance customer loyalty, while exploring potential customer value, and promote the development of new business on top of the success of our t
Slide 29: Technical Innovation to Meet Customer Needs
Technical Innovation to Meet Customer Needs and Strengthen Customer Energy Utilisation Resilience Carry out in-depth research and exploration of the energy consumption characteristics of C/I customers that accounts for a high proportion of energy cost, combining ecosystem resources and focus on opti
Slide 30: Typical Industrial Park IE Project - Cash Flow Projection
Typical Industrial Park IE Project - 1. Stable & Recurring Income Cash Flow Projection • 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 31: 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 32: Gas Delivery Process
Gas Delivery Process Vehicle & ship gas users 31
Slide 33: 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 34: 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