Enn Energy Holdings Limited · HKEX:2688
Enn Energy — H1 2017 Earnings Presentation
27 slides from Enn Energy's earnings presentation, August 2017
Slide 1: 2017 Interim Results
2017 Interim Results Company Presentation August 2017
Slide 2: Disclaimer
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
Slide 3: Contents
CONTENTS 1. Results Highlights 2. Financial Review 3. Strategies & Operation Review 4. Appendix
Slide 4: Results Highlights
Results Highlights 1H2017 1H2016 Change Key Financials Revenue (RMB million) 21,424 15,639 37.0% Gross Profit (RMB million) 3,873 3,732 3.8% Profit attributable to Owners of the Company 1,649 1,587 3.9% (RMB million) Recurring Profit (RMB million)1 1,907 1,652 15.4% EPS – Basic (RMB) 1.52 1.47 3.4%
Slide 5: Results Highlights
Results Highlights 1H2017 1H2016 Change Gas Customers New Natural Gas Connection - Residential Households 951,180 907,168 4.9% New Natural Gas Connection - C/I Customers (sites) 9,650 4,830 4,820 Newly Installed Designed Daily Capacity for C/I Customers (m³) 6,957,575 6,059,148 14.8% Accumulated Pip
Slide 6: Contents
CONTENTS 1. Results Highlights 2. Financial Review 3. Strategies & Operation Review 4. Appendix
Slide 7: Strong Volume Growth
Strong Volume Growth Natural Gas Sales Volume Breakdown 9,187 (‘000 m3) 1H2017 1H2016 Yoy change Residential 1,188,473 954,211 24.6% Commercial & Industrial 5,037,878 3,744,428 34.5% Vehicle 693,478 758,906 -8.6% 6,479 Wholesale of Gas 2,267,279 1,021,880 121.9% 5,527 ASP & Procurement Cost Breakdow
Slide 8: Healthy Segment Contribution
Healthy Segment Contribution 21,424 3,873 3,732 3,243 15,887 15,639 Total revenue including joint ventures and associates amounted to RMB31,058 million 7
Slide 9: High-Quality Customer Mix
High-Quality Customer Mix Primary Focus on C/I customers with Higher Profitability Diversified C/I Customer Base to Sustain Volume Growth Gas Sales Revenue Structure* Mechanical Petrochemicals Food & Beverage Textile Manufacturing Pharmaceutical Heating Production Construction Materials Commercial *
Slide 10: Improving Cost Control and Profitability
Improving Cost Control and Profitability *After stripping off one-off items in other gains and losses and amortisation of share option expenses of RMB258 million, RMB65 million and RMB161 million in 1H2017, 1H2016 and 1H2015 respectively Total profit including joint ventures and associates amounted
Slide 11: Disciplined CAPEX and Healthy Capital Structure
Disciplined CAPEX and Healthy Capital Structure 1.34 1.13 1.05 Rating agency S&P Moody’s Fitch Credit Rating BBB (Positive) Baa2 (Stable) BBB (Stable) 10
Slide 12: Prudent Debt Structure
Prudent Debt Structure *The Company announced the issuance of 5-year US$600 million 3.25% bonds due 2022 on 24 July 2017. It intended to use net proceeds for refinancing certain existing indebtedness and general corporate purposes. 11
Slide 13: Contents
CONTENTS 1. Results Highlights 2. Financial Review 3. Strategies & Operation Review 4. Appendix
Slide 14: Key Beneficiary of Natural Gas Growth in China
Key Beneficiary of Natural Gas Growth in China Government Initiatives to Optimise Primary Energy Mix ENN Energy’s Strategic Project Locations Areas with robust C/I Mainly in eastern coastal ➢ Central government reiterated the aim that natural gas will activities, stable property cities with more str
Slide 15: Clear Development Strategies
Clear Development Strategies Steadily Develop Core City-gas Businesses ➢ Increase residential penetration rate ➢ Promote C/I coal-to-gas conversion ➢ Adopt asset-light business model to enhance Core profitability of vehicle gas refuelling business ➢ Utilise large customer base for value-added *City-
Slide 16: Steadily Develop Core City-gas Businesses
Steadily Develop Core City-gas Businesses ➢ Increase residential new connections steadily • Stable new property market provided sufficient backlog for new buildings connections in the future • Average gas penetration rate reached 58.0%, demonstrating large room for old buildings connections in the c
Slide 17: Steadily Develop Core City-gas Businesses
Steadily Develop Core City-gas Businesses Favorable Policies by Local Government ➢ Actively develop coal-to-gas users “2+26” Cities in Beijing-Hebei-Tianjin, Henan & • Newly connected coal-to-gas users amounted to 2.71 million m3/day Shandong: • Worked with local government to formulate coal-to-gas
Slide 18: Steadily Develop Core City-gas Businesses
Steadily Develop Core City-gas Businesses Connectable Province New Projects Population New Project Acquisition On Track Anhui Bozhou Wuhu Modern Industrial Park N/A (亳州蕪湖現代產業園) ➢ The Group acquired 5 new projects and 14 new Guangdong Heyuan Lianping County(河源連平縣) 250,000 concessions nearby existing
Slide 19: Actively Develop Synergistic Businesses
Actively Develop Synergistic Businesses Evolving into an Integrated Energy Supplier ➢ Actively develop distributed energy projects • 22 distributed energy projects in operation • Provided integrated energy solutions with cost advantage to C/I customers, public infrastructure, industrial parks and Ex
Slide 20: Actively Develop Synergistic Businesses
Actively Develop Synergistic Businesses Strategically Develop Wholesale of Gas Business High Growth of China’s LNG Demand Strived to Maintain the Leadership in LNG Trading Market ➢ LNG consumption is expected to reach 23.46 million tons by 2021 Strengthened Gas Procurement Capabilities (equivalent o
Slide 21: Contents
CONTENTS 1. Results Highlights 2. Financial Review 3. Strategies & Operation Review 4. Appendix
Slide 22: 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 Improved Investment Grade Ratings • Established in 1993, ENN is one of the leading privately owned gas operators in the PRC 2014 2015 2016 Latest • ENN’s principal business includes sale and distribution of pi
Slide 23: Overview of Key Business Segments
Overview of Key Business Segments Revenue related with gas sales, as the bulk of the total revenue, provides long-term and recurring sources of income to ENN. Sales of Piped Gas Gas Connection Wholesale of Gas Vehicle Gas Refuelling Stations • Sell piped gas to residential households • Conduct the n
Slide 24: Gas Delivery Process
Gas Delivery Process Vehicle & ship gas users 23
Slide 25: Simplified Model for a Typical City-gas Project
Simplified Model for a Typical City-gas Project Revenue/Cost • 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 whole pipeline netwo
Slide 26: Latest Benchmark City-gate Price
Latest Benchmark City-gate Price Province From 20 From 1 September Province From 20 From 1 September November 2015 2017 November 2015 2017 Unit: RMB/m3 (Incl. VAT) Henan 2.01 1.91 Beijing 2.00 1.90 Hubei 1.96 1.86 Tianjin 2.00 1.90 Hunan 1.96 1.86 Hebei 1.98 1.88 Guangdong 2.18 2.08 Shanxi 1.91 1.81
Slide 27: Investor Relations Contact
Investor Relations Contact: Ms. Hedy Shen / Ms. Grace Wei / Ms. Evonne Zhang Tel: +852 2528 5666 / +86 316 2599928 Fax: +852 2865 7204 Email: yihui.shen@ennenergy.com / weiliping@enn.cn / evonne.zhang@ennenergy.com Website: www.ennenergy.com 26