Slide 1: Sunpower Group Ltd. Investor Presentation
SUNPOWER GROUP LTD. Founded in 1997 & Listed since 2005 Investor Presentation 12 August 2024
Slide 2: Agenda
AGENDA 01 Sunpower Group At a Glance 02 Investment Highlights 03 Project Updates 04 Outlook 05 Q&A Session 2
Slide 3: Sunpower Group at a Glance
Sunpower Group at a Glance Leading provider of clean industrial steam that generates recurring, long-term, high-quality income Pioneer in application of the Circular Economy Model and helps to achieve Carbon Peak and Carbon Neutrality in China Focused on the investment and operation of centralised f
Slide 4: Sunpower Group at a Glance: GI Business Maintained Strong Growth
Sunpower Group at a Glance GI Business Maintained Strong Growth despite mixed macro environment: For 1H2024, total steam sales volume rose 14.4% YoY to 5.68 mil tons, GI recurring revenue (1) rose 3.3% YoY to RMB1,655.1 mil, GI recurring EBITDA(1) rose 24.8% YoY to RMB549.5 mil, and GI recurring P
Slide 5: Agenda
AGENDA 01 Sunpower Group At a Glance 02 Investment Highlights 03 Project Updates 04 Outlook 05 Q&A Session 5
Slide 6: Investment Highlights
Investment Highlights 1 Leading Industrial Service Provider with Long-term Strategy in Alignment with National Policies 2 Robust and Superior Business Model Generating Long-term, Recurring Income 3 Strong Financial Performance with Notable Growth 4 Well-positioned to Realise Long-term Growth Potenti
Slide 7: Leading Industrial Service Provider with Long-term Strategy in Alignment with National Policies
Leading Industrial Service Provider with Long-term Strategy in Alignment with National Policies Leading market position with sizeable high-quality GI portfolio across 01 developed areas in China › Best-in-class industrial steam supplier Rapid expansion and quick scale-up to 11 projects in operation
Slide 8: Leading Industrial Service Provider: Best Clean Solution for Rising Steam Demand
Leading Industrial Service Provider with Long-term Strategy in Alignment with National Policies 02 Best “clean” solution for rising steam demand Annual reduction of CO2 emissions > 600,000 tons Strategy aligned with the goals of Carbon Neutrality and Carbon Peak, and facilitates the early achievemen
Slide 9: Pioneer Adopter of the Circular Economy Model
Leading Industrial Service Provider with Long-term Strategy in Alignment with National Policies Pioneer adopter of the Circular Economy Model (“CEM”) 03 The 14th Five-Year Plan promotes development of circular economy industrial parks and centralised steam facilities Benefits for Society ▪ Achieves
Slide 10: Robust and Superior Business Model Generating Long-term, Recurring Income
Robust and Superior Business Model Generating Long-term, Recurring Income High entry barriers Exclusive Concession Area 01 Typically ~ 30-year exclusive concession rights with first right of renewal Extensive network of pipelines enhance de facto exclusivity for industrial steam supply Strong ta
Slide 11: Resilient Demand for Steam
Robust and Superior Business Model Generating Long-term, Recurring Income 04 Resilient demand for steam Large and captive customer base from a diverse Strong economic viability of downstream customer enterprises as and wide range of industries they are located in the industrial parks that either
Slide 12: Application of Innovative Technologies
Robust and Superior Business Model Generating Long-term, Recurring Income Application of innovative technologies TEMPERATURE PRESSURE LOSS COVERAGE LOSS (℃/KM) (MPA/KM) RADIUS (KM) 05 Long Distance Steam Distribution Pipelines Technology - Increase geographical reach to captive customers. Achieve
Slide 13: Strong Financial Performance with Notable Growth
Strong Financial Performance with Notable Growth Total steam sales volume rose 14.4% YoY to 5.68 million tons in 1H24, mainly due to the continuing ramp-up of the GI projects including Shantou Project. Improvement in profitability: GI recurring revenue rose 3.3% YoY to RMB1,655.1 million, while
Slide 14: Key Growth Drivers
Well-positioned to Realise Long-term Growth Potential with Established Sizeable Portfolio and Strong Pipeline The existing GI portfolio is still ramping up utilisation and is expected to have long-term growth 01 potential Key Growth Drivers Organic growth of some customers and industrial parks serve
Slide 15: Large Demand for Urban Heat Supply; Strong Project Pipeline
Well-positioned to Realise Long-term Growth Potential with Established Sizeable Portfolio and Strong Pipeline Forecast of total demand of China's urban steam supply Large demand for urban heat supply to provide industry from 2022 to 2027 (100 million GJ) 02 enormous growth potential for GI business
Slide 16: Mature and Replicable Business Model
Well-positioned to Realise Long-term Growth Potential with Established Sizeable Portfolio and Strong Pipeline Mature and replicable business model with a unique competitive edge across the GI business cycle to drive sustainable growth 04 01 02 › Ability to establish high entry barriers › Established
Slide 17: Professional and Disciplined Management and Operational Team
Professional and Disciplined Management and Operational Team with Strong Execution Capabilities and Entrepreneurship Senior management are proven professionals with personal integrity The management’s proven capability to navigate the company through the various challenges will lay a strong foundati
Slide 18: Operation and Management Systems are Well Established
Operation and Management Systems are Well Established › Sunpower’s management has created and refined Board of Directors an Operational Management System that targets to maximise efficiency and effectiveness and reduce the Group’s exposure to risks. Risk Management Committee Audit Committee Sustaina
Slide 19: Practises ESG and Sustainability Values in Every Aspect
Practises ESG and Sustainability Values in Every Aspect Committed to sustainability by incorporating environmental, social and governance (ESG) values into every aspect. Undertakes the social responsibility to support the sustainable development of the economy and helps to build ultra-low emissi
Slide 20: DCP and CDH are Strategic Institutional Investors
DCP and CDH are Strategic Institutional Investors Among the largest and Invested US$130 million in Strong track record of most experienced Chinese Sunpower through convertible investing and nurturing private equity (PE) bonds issued to-date. Provide many leading investors institutional support
Slide 21: Agenda
AGENDA 01 Sunpower Group At a Glance 02 Investment Highlights 03 Project Updates 04 Outlook 05 Q&A Session 21
Slide 22: Changrun Project
Changrun Project Capacity 2×220t/h (steam) + 2×25MW (electricity) Length of ~74 km of pipeline pipeline Product mix Industrial steam, electricity Customer mix ~75 captive customers. Main products include towels, medicine, blankets, etc. Location Gaoyang County, Hebei Province 1. Notable accomplishme
Slide 23: Yongxing Plant
Yongxing Plant Capacity 350t/h (steam)+36MW (electricity) Yongxing Plant Length of pipeline ~150 km Product mix Industrial steam & electricity Customer mix Diversified industries in textile, printing and dyeing, food, chemical, paper making, renewable energy, machinery manufacturing, etc. Location Z
Slide 24: Shantou Project – Ramping Up Rapidly
Shantou Project –Ramping Up Rapidly Length of pipeline ~22 km Nameplate Capacity Phase 1: 3×150t/h (=450 t/h); Phase 2: 2 × 260t/h (=520 t/h) Product mix Industrial steam, compressed air, electricity Mix of end- Ready-made "base of end-users" of >100 qualified enterprises, involved in the printing &
Slide 25: Xinyuan Plant
Xinyuan Plant M&A Consideration ~RMB212.5 million Steam: 3×75t/h + 1 ×220t/h (=445 t/h) Capacity Electricity: 2 × 6MW + 1 ×25MW (=37 MW) Product mix Industrial steam, heating, and electricity Industrial end-customers concentrated in the energy, printing & dyeing, and clothing Mix of end- industries,
Slide 26: Suyuan Plant
Suyuan Plant M&A Consideration ~RMB293 million Steam: 1 × 90t/h + 2 ×75t/h (=240 t/h) Capacity Electricity: 1 × B7MW Product mix Industrial steam and electricity Concentrated in printing & dyeing industry in coral velvet, soft velvet, polar velvet, super soft Customer base velvet, etc. Location Chan
Slide 27: Tongshan Project
Tongshan Project Capacity Phase 1: 1 × 130t/h (steam)+ 1 ×35MW (electricity) Product mix Industrial steam, heating, and electricity Location Tongshan District, Xuzhou City, Jiangsu Province 1. Located in an economically developed area with potential for development and growth: • Tongshan District ra
Slide 28: Shanxi Xinjiang Project
Shanxi Xinjiang Project Capacity Phase 1: 1 ×130t/h (steam)+ 1 ×C15MW (electricity) Product mix Industrial steam and electricity Existing concentration of customers provides ready pool of demand from industries Customer mix such as high-end equipment manufacturing, new materials, fine chemicals, ure
Slide 29: Agenda
AGENDA 01 Sunpower Group At a Glance 02 Investment Highlights 03 Project Updates 04 Outlook 05 Q&A Session 29
Slide 30: FY2024 Outlook
FY2024 Outlook Barring unforeseen circumstances, the Group expects the business trends summarised below to benefit its business in FY2024. Please note that our financial results should be viewed on a 12-month basis to arrive at a balanced perspective. Continued ramp-up of the existing GI plants to
Slide 31: Strategy to Grow Earnings with Quality Remains on Track
Strategy to Grow Earnings with Quality Remains on Track Pertaining to the GI business, for 2024, Sunpower intends to continue to execute the following two-pronged strategy with an emphasis on the quality of development that amplifies its strengths: (1) Solidifying its market position as a centralise
Slide 32: The Maturity Date of the Convertible Bonds was Extended
The Maturity Date of the Convertible Bonds (CBs) was Extended The shareholders approved the extension of the maturity date of the CBs (principal amount of USD130 million) by two years to April 2025, amongst other amendments at a Special General Meeting on 28 July 2023. The Group continues to pro
Slide 33: Appendices
Appendices 33
Slide 34: Financial Effects of the Convertible Bonds
Financial Effects of the Convertible Bonds Convertible Bonds were issued on 3 March 2017 and 15 October 2018 with the carrying amount of the Convertible Bonds currently stated at fair value as at 31 March 2017 and 15 October 2018 respectively. In accordance with SFRS(I), the financial effects on pro
Slide 35: Group Income Statement Summary
Group Income Statement Summary (Without the financial effects of CBs)* (RMB million) 1H 2024 1H 2023 Revenue 1,737.0 1,636.9 Gross Profit 469.1 365.0 EBITDA 530.0 420.5 Profit for the period (net of tax) 251.1 162.4 *Group results reflect the results of continuing operations, without the financial e
Slide 36: Group Balance Sheet Summary
Group Balance Sheet Summary (Without the financial effects of CBs)* (RMB million) As of 30 June 2024 As of 31 December 2023 Cash and cash equivalents & pledged bank deposits 617.6 747.8 Trade Receivables 919.7 813.0 Inventories 159.4 138.0 Total Current Assets 2,021.4 1,984.7 Non-Current Assets 5,59
Slide 37: Group Cash Flow Summary
Group Cash Flow Summary (Without the financial effects of CBs)* (RMB million) 1H 2024 1H 2023 Net cash from operating activities 126.6 172.3 Underlying operating cash flow 150.0 (1) 194.9(2) Net cash (used in)/from investing activities (106.9) (218.0) Net cash from/(used in) financing activities (14
Slide 38: Definitions of GI recurring revenue, EBITDA and PATMI
Definitions of GI recurring revenue, EBITDA and PATMI GI recurring revenue refers to recurring revenue generated by the GI business, including commission fees recognised in accordance with SFRS(I) INT15. It excludes one-time contributions from services for BOT projects including EPC services that ar
Slide 39: Agenda
AGENDA 01 Sunpower At a Glance 02 Investment Highlights 03 Project Updates 04 Outlook 05 Q&A Session 39
Slide 40: Disclaimer & Forward Looking Statement
Disclaimer & Forward Looking Statement This presentation and the information contained herein is prepared for informational purposes only, without regard to the investment objectives, financial situation or needs of any person. It does not constitute an offer to sell or issue or the solicitation of