Towngas Smart Energy Company Limited · HKEX:1083
Towngas Smart Energy — Towngas China Company — FY2019 Earnings Presentation
21 slides from Towngas Smart Energy's earnings presentation, 2020
Slide 1: Towngas China 2019 Annual Results Presentation
Towngas China (1083.hk) 2019 Annual Results Presentation
Slide 2: statements reflect the company’s view on some future events
This presentation and subsequent discussion may contain certain forward-looking statements. These forward-looking statements reflect the company’s view on some future events and involve known and unknown risks and uncertainties and other factors which may cause actual performance and development dif
Slide 3: Towngas China as a major city-gas platform in China for Hong Kong & China Gas
Towngas China as a major city-gas platform in China for Hong Kong & China Gas • Major utilities and energy Hong Kong & China Gas company in Hong Kong and (0003.hk) mainland China • A HSI constituent stock 67.76% • Major city-gas company in Towngas China mainland China (1083.hk) 3
Slide 4: 12 projects added, total in 21 provincial regions
12 project added, total 127 projects Heilongjiang in 21 provincial regions Total projects New Projects Jilin City-gas 98 1. Eastern coastal area of Laoshan district, Qingdao city Liaoning 12 Midstream 4 - Hebei 2. Maanshan Economic and Technological Development Inner Mongolia Beijing 6 Zone South Di
Slide 5: Project count growth 2006-2020
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 YTD 25 37 40 47 61 66 74 87 97 102 104 105 115 126 127 140 Injection from HKCG 1 120 11 Newly Acquired 11 2 3 100 Existing 6 10 80 14 8 60 5 126 6 115 7 8 87 96 102 102 104 40 3 73 10 61 66 2 20 37 40 47 25 25 0 2006 2007 200
Slide 6: Financial and Operational Performance
Financial and Operational Performance 6
Slide 7: FY2019 highlights
• Operating Profit before Impairment Provision: HK$1,456Mn 19% Gas Sales Volume Total Projects Total Customers New Connections 11% +11 +0.8Mn +1.1Mn 7
Slide 8: FY2019 financial results vs FY2018
(HK$ Mn) FY2019 FY2018 Change Turnover Gas Sales & Others 10,835 9,755 +11% Connection Fees 2,089 2,032 +3% 12,924 11,787 +10% Operating Profit before Corporate Expenses 1,999 1,867 +7% Finance Cost (371) (486) -24% Corporate Overhead (172) (157) +9% Profit before One-off Item 1,456 1,224 +19% One-o
Slide 9: Average gas price margin FY2018 vs FY2019
2018 2019 +2.6% -4.1% 7.40 7.20 7.00 6.80 FY Average 6.60 6.91 FY Average 6.40 6.62 6.20 6.00 2018 2019 9
Slide 10: Financial position and credit ratings
TCCL (1083 HK) 31 Dec 31 Dec 31 Dec 31 Dec Change Change 2019 2018 2019 2018 HK$ Bn HK$ Bn Total assets 38.2 34.0 +12% Share price (HK$)^ 5.40 5.81 -16% Net asset value 20.3 17.8 +14% Market cap. (HK$ Bn) 15.5 15.5 -16% Cash and Bank 2.0 1.7 +20% No. of Shares (Bn) 2.87 2.81 - Total borrowings 10.3
Slide 11: Shanghai Stock Exchange listing of investee
Stock code: 603053 Market: Shanghai Stock Exchange Listing date: 17 Dec 2019 Listing price: Rmb10.45 per share P/E: 23x Fair value gain to reserve: HK$ 1,969 million TCCL ownership post listing: 11.7% 11
Slide 12: Gas Sales Volume
(Bn m³) FY18 FY19 Change Industrial 6.0 6.8 +13% Commercial 1.6 1.8 +9% Residential 2.4 2.5 +5% DES - 0.1 - Total 10.0 11.1 +11% 12 11.1 10.0 10 Gas Sales Volume (Bn m³) 8.4 8 7.1 6.5 6.6 5.9 6 5.3 4.7 4.0 4 3.2 2.7 2.1 2 0.1 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 FY19 *All JV
Slide 13: Gas Sales Volume Mix and Productivity
Gas Sales Volume Mix (%) Productivity Customers No.(LHS) Gas Volume/Employee (RHS) DES Residential Commercial Industrial (Mn) (‘000 m³) 16 507 550 14 454 500 22% 12 450 24% 400 10 350 8 16% 13.4 300 16% 6 12.6 60% 61% 250 4 200 1% 2 150 FY18 FY19 0 - FY18 FY19 * All JVs (100%) 13
Slide 14: COVID-19 impact and measures
• Economic activities were mostly suspended in February 2020 • Resumption of work and production in an orderly manner. C&I gas consumptions gradually resume from March 2020 • Gas volume in 1Q2020 is expected to drop by 15%, expect a single digit volume growth for 2020FY • Some provincial/municipal g
Slide 15: National gas volume growth and foreign ownership restriction lifted
1. National Gas Volume Growth Continues 2019 2020 2030 National Annual Consumption 307 Bn m³ 330 Bn m³ 480 Bn m³ Share of Primary Energy 8.3% 8-9% 15% 2. Lift restriction on foreign ownership on city-gas JVs Restriction on majority foreign ownership for cities with population >500,000 was lifted
Slide 16: Russian Gas Will Spark Volume Growth in North-Eastern & Northern Regions
Russian Gas Will Spark Volume Growth in North-Eastern & Northern Regions Russian NG supply started in Dec 2019 with volume of 38 Bn m³ p.a. by 2024 North-Eastern 2019 2024F Number of projects 21 >25 Volume (Bn m³) 1.6 4.6 Volume Growth CAGR: 23% Shaanxi Hubei Northern 2019 2024F Eastern South-Wester
Slide 17: National Pipeline Company and NDRC Connection Fees Policy
3. Setting up National Oil and Gas Pipeline Company • Announced in December 2019 • Open access to pipelines and NG importation • More extensive pipelines development • Free flow of NG, LNG nationwide • Lower procurement cost • Gas shortage in certain regions will be reduced 4. NDRC on Connection Fee
Slide 18: Coal-to-Gas Conversion Policy
5. Coal-to-Gas Conversion Policy Chinese government continues to reduce carbon emission and improve air quality Step up boiler conversion: 10 to 35 steam tons (eqv. 2,800 m³ NG/hour) Benefits to TCCL 2015-18 2019 2020F Cumulative Annualized Gas 2.0 2.5 3.0 Consumption Capacity (Bn m³) A key dr
Slide 19: Green Energy Integrated Services Business Growth
Green Energy Integrated Services Business Growth • Green Energy Integrated Services • Enhance energy efficiency with more 3,500 gas sales • Projects Central space heating 2,100 Central steam supply for industrial parks 1,500 1,200 Air-conditioning 54 Electricity 30 42 100 18 Pipelines for
Slide 20: Gas storage in Jintan, Jiangsu
Gas storage in Jintan, Jiangsu • To meet winter peak demand • Sharing investment cost among JVs • National pipelines facilitate free flow of NG Jintan Underground NG Storage • NG and LNG trading opportunities Project Information Cumulative • Shanghai Gas is a partner of Phase • Phase 1-1 capacity: (
Slide 21: Thank you
OM IRD D> sa288% Towngas China Company Limited Thank you