Towngas Smart Energy Company Limited · HKEX:1083
Towngas Smart Energy — H1 2024 Earnings Presentation
30 slides from Towngas Smart Energy's earnings presentation, Aug 15, 2024
Slide 1: Towngas Smart Energy Company Limited FY2024 Interim Results
Towngas Smart Energy Company Limited (1083.HK) FY2024 Interim Results 15 August 2024 1
Slide 2: 2024: Overall Operating Environment
2024: Overall Operating Environment Rising interest rate pressure Rates could stay high Business restructuring, cost-saving & efficiency despite pressure enhancement Recovery of oil & gas Falling price volatility demand Gas supply chain business in full swing Transition towards Establishment of new
Slide 3: Strategic Blueprint
Strategic Blueprint 01 Rationalize business structure and concentrate on core businesses Bring in strategic investors & Peter Wong Wai-yee 02 partners to help strengthening every business unit growth Ongoing effort to streamline non-core Yeung Lui-ming Alan Chan Ying-lung 03 businesses and optimize
Slide 4: 2024 Management Team and Business Highlights
2024 Management Team and Business Highlights Hong Kong 01 01 Mainland Utility 01 Gas Supply Chain Utility Don Martin Zhou Heng-xiang 郑晓光 Cheng Hill-kwong 郑晓光 Kee Wai-ngai 郑晓光 • Completed tariff increases in Hong • Market expansion with gas volume • Strive for signing LTA with “Three Majors” Kong up
Slide 5: 1H 2024: Overview of Business Operations
1H 2024: Overview of Business Operations Gas Business Renewable Energy City Gas Sales Volume Accumulated PV Grid-connected 8.74 billion m³ 6% City Gas Projects 2.1 GW 0.3 GW 190 projects 3 Customers Power Generation Volume 17.22 million 0.45 million Dollar Margin 0.68 billion kWh 1.4X 0.52 RMB/m 3 0
Slide 6: Natural Gas and PV Demand Outlook
Natural Gas and PV Demand Outlook National Natural Gas Consumption National Cumulative Installed PV Capacity (up to 2040） （up to 2030） （Unit: billion m3) (Unit: GW) 3.5% (CAGR) 22.6% (CAGR) 2,552 700.0 550.0 394.5 324.0 1,070 833 613 392 253 306 2020 2023 2030 2040 2020 2022 2024 2025 2030 Source: I
Slide 7: Agenda
AGENDA Financial Highlights P. 8 Business Review ▪ Gas Business P. 12 ▪ Renewable Energy P. 18 ESG P. 23 Group Outlook and Business Guidance P. 26 7
Slide 8: Financial Highlights
s235 AREA BRAG Towngas Smart Energy Company Limited Financial Highlights
Slide 9: 2024 Interim Results
2024 Interim Results RMB exchange rate: -4% (Unit: HK$ million) 1H2023 1H2024 Changes Revenue 9,883 10,501 6% Operating Profit (RMB million) 742 935 26% Operating Profit 835 1,015 22% Gas Business Net Profit 832 851 2% Renewable Energy Net Profit 3 164 > 50x Corporate Financial Expenses (328) (276)
Slide 10: Healthy Financial Position
Healthy Financial Position (Unit: HK$ billion) 31 Dec 2023 30 Jun 2024 Total Assets 53.5 53.6 Net Assets 25.2 24.8 Cash and Bank Balances 4.2 4.0 Total Borrowings 18.3 18.6 Net Gearing Ratio* 35.8% 37.1% *Note: Net Debt / (Net Debt + Equity） Credit Rating: BBB+ Baa1 AAA 10 Towngas Smart Energy Limit
Slide 11: Capital Expenditure
Capital Expenditure (Unit: HK$ billion) 1H2023 1H2024 - Gas Business 1.0 0.8 - Renewable Energy Business 2.3 1.2 Capital Expenditure 3.3 2.0 11 Towngas Smart Energy Limited | 2024 Interim Results
Slide 12: Business Review
Business Review ▪ Gas Business ▪ Renewable Energy 12
Slide 13: Continual Growth in Gas Volume with Stable Gas Sales Mix
Continual Growth in Gas Volume with Stable Gas Sales Mix Gas Sales Volume (Unit: billion m3) 6% 8.74 • C&I gas sales volume grew steadily 8.23 • Property sales remained a drag on Industrial 48% 4.13 47% peripheral industries, but the gas 3.95 demand from the “New Trio” is increasing substantially Co
Slide 14: Rising Gas Dollar Margin
Rising Gas Dollar Margin Selling Price, Cost and Dollar Margin Dollar Margin (Unit: RMB/m3) 1H2023 1H2024 Changes • Dollar margin improved in 1H2024 Residential 2.69 2.75 +0.06 • C&I cost pass-through in time Commercial 3.64 3.65 +0.01 Selling • Residential cost pass-through slowed down Price Indust
Slide 15: Connection Business Revenue
Connection Business Revenue National real estate market remains weak, new construction Unleashing uncharted potential to area dropped by approx. 24% YoY. improve gross margin Number of household connections decreased YoY • Stringent cost management and (Unit: thousands) continual improvement of gros
Slide 16: Gas Supply Chain - Ensurance of Gas Supply
Gas Supply Chain - Ensurance of Gas Supply 1 Negotiated with the “Three Majors” to optimize supply costs and resource allocation 2 Expanded self-owned LNG import, strengthened gas pipeline interconnection, and secured ensurance of gas supply 3 Integrated existing gas supply resources and facilities
Slide 17: "Gas+": Focus on Strategy with Steady Growth
“Gas+”: Focus on Strategy with Steady Growth Energy Sales Volume Taizhou TCM Qiqihar (Unit: billion kWh) 24% Hospital Wanda Plaza 0.51 0.41 1H2023 1H2024 Natural gas equivalent 41.0 51.0 Number of key hospitals in the Number of large commercial complexes （Unit: million m3) gas operating area: 2,400+
Slide 18: Business Review
Business Review ▪ Gas Business ▪ Renewable Energy 18
Slide 19: Profit Growth on Fast-track
Profit Growth on Fast-track Operational Data 1H2023 1H2024 Changes Grid-connected (GW) 1.1 2.1 1.0 GW PV Generation (billion kWh) 0.28 0.68 143% Gross Margin (RMB/kWh) 0.34 0.30 0.04 RMB/kWh Decreased sunlight hours Financial Data (RMB million) BU Profit Contribution 62 223 259% PV Power Generation
Slide 20: PV Power Generation & Services
PV Power Generation & Services: PV Power Generation Volume Grow Rapidly and PV Services Begin Contributing Profit (Unit: RMB million) 250 200 195 Profit from PV power generation reaching 1 RMB181 million. Prolonged rainy and cloudy weather in 1H2024 severely impacted power +254% 150 generation drivi
Slide 21: Energy & Carbon Management Services
Energy & Carbon Management Services：High Growth in Electricity Sales, and Micro-grids (EaaS) Business Ready to Take Off (Unit: RMB million) 30 28 Electricity sales to industrial customers 1 surged to around 1,000, with sales volume reaching 3.2 billion kWh +300% 20 Micro-grid (EaaS) business of “PV
Slide 22: Upgrade from PV Investment to "Investment + Service"
Stringent Risk Control: Upgrade from PV Investment to “Investment + Service” Strategy High-quality Development 1. Source additional capital, Establish a healthy cash-flow model, AuM enlarge scale and reduce adjust annual PV grid-connected scale to Model equity stake 500 MW Leverage on our leading po
Slide 23: ESG
ESG s235 AREA BRAG Towngas Smart Energy Company Limited 23
Slide 24: 1H2024: ESG Performance
1H2024: ESG Performance The Group’s Carbon Reduction Initiative • Promote coal-to-gas conversion • Dispose of municipal solid waste • Build distributed PV generation projects • Produce sustainable aviation fuel (SAF) and green methanol • Switch to energy-efficient gas equipment International Ratings
Slide 25: Aligning with ESG Trends to Advance Biodiversity
Aligning with ESG Trends to Advance Biodiversity HKCG New Energy • Hong Kong’s first symposium covering Development biodiversity and new energies • Supported by over 20 organisations from Marine Hong Kong and Chinese mainland Green methanol • Over 5,000 online and offline participants Land Hydrogen
Slide 26: Group Outlook and Business Guidance
Group Outlook and Business Guidance 26
Slide 27: 2024 Opportunities and Challenges
2024 Opportunities and Challenges Gas Business • Vigorously cultivate C&I customers and accelerate “Gas+” business development; gas volume expect to grow by 7%. • C&I cost pass-through in time; speed up residential cost pass-through; dollar margin expect to raise by 2 cents/m³. • Towngas will take a
Slide 28: 2024 Business Guidance
2024 Business Guidance Gas Business Renewable Energy City Gas Sales Volume Accumulated PV Grid-connected 17.6 billion m3 7% 2.3 GW 0.5 GW Customers 17.57 million Power Generation Volume 0.8 million 1.65 billion kWh 1X City Gas Dollar Margin* 0.57 RMB/m3 0.02 RMB/m3 *Note: excluding wholesale Towngas
Slide 29: Thank You
s235 AREA BRAG Towngas Smart Energy Company Limited THANK YOU
Slide 30: Disclaimer
Disclaimer This presentation and corresponding discussion may contain certain forward-looking statements, including statements regarding our intent, belief or current expectations with respect to Towngas Smart Energy’s businesses and operations, market conditions, results of operation and financial
Towngas Smart Energy Company — H1 2024 Earnings Presentation on 6ix