Enn Energy Holdings Limited · HKEX:2688
Enn Energy — H1 2013 Earnings Presentation
37 slides from Enn Energy's earnings presentation, September 2013
Slide 1: 2013 Interim Results
2013 Interim Results Analyst Presentation September 2013
Slide 2: Contents
Contents 1. Financial Highlights 2. Business Review 3. Our Strategies 4. Appendix 1
Slide 3: Financial Highlights
Financial Highlights (RMB million) 1H2013 1H2012 Change Revenue 10,386 8,774 18.4% Gross Profit 2,721 2,411 12.9% EBITDA 2,230 1,872 19.1% EBIT 1,871 1,558 20.1% Profit attributable to owners of 737 730 1.0% the Company EPS - Basic (RMB cents) 68.02 68.78 -1.1% EPS - Diluted (RMB cents) 68.00 68.54
Slide 4: Dividend Policy
Dividend Policy The Board of Directors has resolved not to recommend payment of an interim dividend for 2013 Our dividend policy: – More subsidiaries have stepped into the mature stage – The Group will balance the development of business and financial position to decide the dividend payout ratio
Slide 5: Revenue Breakdown
Revenue Breakdown 5.7% 0.7% 2.3% 20.2% 12.8% 1H2013 5.2% 0.4% 1.1% 17.8% 2012 13.2% 58.3% 62.3% 2011 7.8% 1.3% 4.4% 22.7% 10.8% 1H2013 1H2012 Core Operating Segments Change % 53.0% (RMB mil) (RMB mil) Gas connection 1,853 1,694 9.4% Sales of piped gas 6,473 5,107 26.7% Gas c onnec tion Vehicle gas r
Slide 6: A Balanced Portfolio of Customers (By Revenue)
A Balanced Portfolio of Customers (By Revenue) Residential customers Gas refuelling stations Commercial / Industrial “C/I” customers Wholesale of gas 1H2013 2012 2011 Gas connection 27.1% 28.5% 72.9% 71.5% Sales of piped gas, vehicle gas and wholesale gas 5
Slide 7: Margins Analysis
Margins Analysis During the period, the gross profit margin dropped by 1.3ppts and net profit margin dropped by 1.2ppts compared with the same period last year Gross profit margin Net profit margin 26.2% (1H2012: 27.5%) 10.1% (1H2012: 11.3%) Margins analysis Gross profit margin: 1. Continuous impr
Slide 8: Financial Resources and Liquidity
Financial Resources and Liquidity (RMB billion) At 30 Jun 2013 At 31 Dec 2012 Change Cash on hand 7.75 6.16 25.8% A/R Days 17 17 — Total Debts 12.81 11.24 14.0% - Short-term loans 2.24 3.95 (43.3)% - Long-term loans 2.66 2.67 — - 10-year bonds 4.56 4.63 (1.5)% - Convertible bonds 3.36 — — Net Gearin
Slide 9: Refinancing Plan
Refinancing Plan As of 30 Jun 2013 Refinancing Plan (RMB billion) Total Debt 12.81 • We have RMB7.75 billion cash on hand while our working capital demands RMB2.5-3 billion Short-term loans: cash only, leading to a surplus cash of RMB4.75 billion, which is enough to refinance the short- Subsidiary l
Slide 10: CAPEX
CAPEX 5 3.15 2.65 2.1 RMB billion 1.69 1.69 3 1.42 1.28 1.02 1.37 0 2005 2006 2007 2008 2009 2010 2011 2012 1H2013 CAPEX injected by the Group in 2013 is expected to be at similar level as in 2012 The Group had positive free cash flow of RMB78 million in 1H2013 (1H2012: negative free cash flow o
Slide 11: Contents
Contents 1. Financial Highlights 2. Business Review 3. Our Strategies 4. Appendix 10
Slide 12: Key Operational Data
Key Operational Data 1H2013 1H2012 Change Coverage & Gas Penetration Rates of PRC projects Number of project cities 126 110 16 Connectable urban population coverage ('000) 57,467 53,389 7.6% Connectable households coverage ('000) 19,156 17,796 7.6% Natural gas penetration rate 43.8% 41.0% 2.8% Piped
Slide 13: Key Operational Data
Key Operational Data 1H2013 1H2012 Change Gas Infrastructure Length of intermediate & main pipelines (km) 22,588 19,952 13.2% Natural gas processing stations 129 116 13 Combined daily capacity of natural gas 3 47,016 32,285 45.6% processing stations ('000 m ) Vehicle gas refuelling stations 376 276
Slide 14: Natural Gas Pricing Reform in 2013
Natural Gas Pricing Reform in 2013 On 28 June 2013, the NDRC published the Notice on Natural Gas Price Adjustment for non-residential natural gas consumption. The new pricing mechanism took effect on 10 July 2013. Highlights of the policy: PRC government has set new ceiling provincial city-gate pr
Slide 15: Gas Sources
Gas Sources To accommodate the anticipated fast-growing demand for natural gas, the Group has several ways to secure gas sources: 1. Take-or-pay contracts Take-or-pay Contracts Signed 15-25 years take-or-pay contracts Contracted Supply Contracted Supply Gas Source with various pipelines, secured
Slide 16: Gas Sources
Gas Sources China continues expanding its natural gas supplying infrastructure, more main pipelines and LNG receiving terminals are being constructed and will be put into operation in the coming years: Capacity Pipeline Name Commencement Date Gas source Operator (mil m3/yr) Shaanxi - Beijing IV 23
Slide 17: Gas Sources – Upstream projects
Gas Sources – Upstream projects The Group has invested in various upstream projects to ensure secured gas sources in long run and to provide clean energy variety to ensure continuous business growth – LNG plants • The group has 5 LNG plants in China, and 4 of them have been put into operation LNG
Slide 18: Contents
Contents 1. Financial Highlights 2. Business Review 3. Our Strategies 4. Appendix 17
Slide 19: Our Strategies
Our Strategies Continue expanding our core businesses riding on favorable government policies and promising growth potential of the industry 126 city-gas projects with over 57.4 million connectable urban population City-gas projects Average gas penetration rate of 44.3% Continue organic growth
Slide 20: Our Strategies – New Projects
Our Strategies – New Projects In 1H2013, the Group has secured 9 new projects in China, including 5 city-gas projects and 4 industrial park projects, spanning across Anhui, Guangdong, Hebei, Total coverage increased to Jiangsu and Shandong providing an additional connectable population of 1,946,00
Slide 21: Our Strategies – New Projects
Our Strategies – New Projects Project Baoding Heyuan Dingyuan County Leizhou Dongyuan County (保定) (河源) (定遠縣) (雷州) (東源縣) Province Hebei Guangdong Anhui Guangdong Guangdong Connectable 1,200,000 300,000 NA 350,000 96,000 Population Stakeholding 49% 100% 100% 70% 100% Operational Administrative Adminis
Slide 22: Our Strategies – New Projects
Our Strategies – New Projects Project Suining Suburban Suchu Modern Binzhou Zhanhua Xintai City Project Industry Park Economic Development Zone (睢寧城郊項目) (蘇滁現代產業園區) Development Zone (新泰市開發區) (濱州沾化經濟開發區) Province Jiangsu Anhui Shandong Shandong Connectable Population NA NA NA NA Stakeholding 70% 88% 8
Slide 23: Operational Locations
Operational Locations China Inner Mongolia (1 project) 768,000 Liaoning (4 projects) 631,000 Additional connectable urban Hebei (16 projects) Beijing Municipality (1 project) population from new 5,498,000 116,000 projects: Offshore gas project – 1,946,000 Shandong (15 projects) Vietnam 6,305,000
Slide 24: Operational Locations
Operational Locations Guangdong (cont’d) Hebei (cont’d) Jiangsu (cont’d) Anhui (12 projects) Yunnan (2 projects) 12. Bengbu 926,000 76. Huadu 669,000 112.Xingtang - 95. Yancheng - EnvironmentalProtection 78. Wenshan 253,000 19. Chuzhou 393,000 79. Guangning 81,000 Dev Zone Industrial Park 91. Kunmin
Slide 25: Our Strategies – LNG Refuelling Stations
Our Strategies – LNG Refuelling Stations Riding on supportive government policies and its economic benefits, market potential for LNG refuelling stations is huge LNG vehicles adoption and forecast Favourable government policy – More provincial governments are expected to implement policies to push
Slide 26: Our Strategies - Vehicle Refuelling Stations
Our Strategies - Vehicle Refuelling Stations CNG refuelling stations LNG refuelling stations CNG refuelling stations since 2002 LNG refuelling stations since 2011 No. of new stations in operation 9 No. of new stations in operation 37 Aggregated no. of CNG refuelling stations in Aggregated no. of LNG
Slide 27: Q & A Session
Q&A Session 26
Slide 28: Contents
Contents 1. Financial Highlights 2. Business Review 3. Our Strategies 4. Appendix
Slide 29: ENN Energy – A Leader in the Industry
ENN Energy – A Leader in the Industry ENN Energy (formerly known as Xinao Gas) is one of the first privately-owned clean energy distributor in the PRC. It was founded by Mr. Wang Yusuo and Ms. Zhao Baoju in 1993. In 1998, the Chinese government promoted the use of natural gas and encouraged priv
Slide 30: Gas Delivery Process
Gas Delivery Process Natural gas fields o distance ipelines ry on y fucsonetiy tet — EEE Intermediate pipelines CNG or ENG trucks “” — Main pipelines Branch pipelines $Me Pressure regulating boxes ies Switches Sea (CNG trucks |) processing stations Notes: (1) Gas delivery using either intermediate p
Slide 31: Immediate Revenue Inflow upon Connection
Immediate Revenue Inflow upon Connection Revenue / Cost Simplified model for a typical matured project 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 recurrent income Prior to
Slide 32: Connection Fee & Tariff Policy
Connection Fee & Tariff Policy Connection Fee Amortisation: Pricing Policies: As of 30 June 2013, 9 projects have adopted On 7 Dec 2012, Sichuan Development and Reform amortisation method: Commission announced to set the city gate price Anhui Province - Fengyang with a price ceiling of RMB1.98/m
Slide 33: China Natural Gas Industry Overview
China Natural Gas Industry Overview PRC Government’s Commitment to Developing Clean Energy China’s plan to achieve 40–45% reduction in carbon dioxide emission per unit of GDP by 2020 is driving national energy consumption towards cleaner fuels such as natural gas In connection with the 12th Five
Slide 34: Approximate conversion factors
Approximate conversion factors To billion cubic million million trillion British million billion cubic Natural gas and LNG meters tonnes tonnes thermal barrels feet NG NG oil equivalent LNG units oil equivalent From Multiply by 1 billion cubic meters NG 1 35.30 0.90 0.73 36.00 6.29 1 billion cubic f
Slide 35: Awards & Honors
Awards & Honors 2013 All-Asia Executive Team Ranking: 2013 China’s Best CEO Forbes Best Companies in China, Rank no. 1 (Power Sector) 2012 Asia’s Fab 50 Best CEO, Rank no.2 (Power Sector) Best CFO, Rank no.3 (Power Sector) Institutional Best IR Company, Ranked no. 3 (Power Sector) China Affiliate of
Slide 36: ENN Energy – Share Price Performance
ENN Energy – Share Price Performance Market Capitalization (as at 23 Aug 2013): HK$42.3 billion 3,500 ENN Energy 3,000 2,500 2,000 1,500 Hang Seng China Enterprise Index 1,000 Hang Seng Index 500 - ENN Energy HIS HSCE 35
Slide 37: 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