Enn Energy Holdings Limited · HKEX:2688
Enn Energy — H1 2015 Earnings Presentation
33 slides from Enn Energy's earnings presentation, January 2016
Slide 1: Analyst/Investor Presentation
Analyst/Investor Presentation January 2016
Slide 2: Contents
CONTENTS 1. Investment Highlights 2. Operational Review 3. Financial Highlights 4. Appendix
Slide 3: Favorable Industry Policies
Favorable Industry Policies Establish an Ecologically-balanced Society “The Opinion on Advancing the Establishment of Ecological Civilization” requires local governments to take stringent measures to improve the quality of air, water and soil. Coal-to-gas Conversion “400,000 steam tonnes of obso
Slide 4: Optimize Mature Businesses
Optimize Mature Businesses Coal-fired Deepen Gas Penetration (Residential Customers) Gas-fired Flexible Marketing Strategies (C/I Customers) Expand Operational Areas Push Forward the Use of Natural Gas as Transportation Fuel Implement “Excellent Management” Program to Enhance Operating Eff
Slide 5: Expand Emerging Businesses
Expand Emerging Businesses Energy Trading Business: Grasp All Downstream Opportunity LNG Distribution for Upstream Suppliers 1. Distribution of LNG imported by Sinopec and CNOOC 2. Distribution to 90 Sinopec’s vehicle gas stations Online Natural Gas Trading Platform To provide seamless natural g
Slide 6: Expand Emerging Businesses (Cont'd)
Expand Emerging Businesses (Cont’d) Distributed Energy Projects: Multi-energy Supply to Gain More Market Shares Increase overall energy efficiency through cascade Changsha Huanghua Airport use of energy by combining cooling, heating and power 2 projects in operation with energy utilisaiton rate
Slide 7: Explore New Business Opportunities
Explore New Business Opportunities Explore and develop electricity sales business in Kunming High Tech Zone in Yunnan and Zhaoqing New Zone in Guangdong as pilot projects Over 11.4mil connected residential households offer potential for the sales of gas appliances Provide vehicle customers wit
Slide 8: Operational Review
CONTENTS 1. Investment Highlights 2. Operational Review 3. Financial Highlights 4. Appendix
Slide 9: Key Operational Data
Key Operational Data 1H2015 1H2014 Change Coverage & Gas Penetration Rates of PRC Projects Number of project cities 146 140 6 Connectable urban population coverage ('000) 65,625 61,645 6.5% Connectable households coverage ('000) 21,875 20,548 6.5% Piped gas (including natural gas) penetration rate (
Slide 10: Key Operational Data
Key Operational Data 1H2015 1H2014 Change Gas Infrastructure Length of intermediate & main pipelines (km) 29,637 25,179 17.7% Natural gas processing stations 155 141 14 Combined daily capacity of natural gas 80,005 59,298 34.9% processing stations ('000 m3) CNG refuelling stations 294 277 17 LNG ref
Slide 11: Natural Gas Pricing Reform
Natural Gas Pricing Reform Shanghai Petroleum & Natural Gas Exchange Commenced trading on 1 July 2015 The Group procured 939mil m3 of piped gas at 8% discount to corresponding city-gate price in 2015 Aim at becoming the pricing hub in China and Asia Latest non-residential gas tariff cut Effe
Slide 12: New Projects Development
New Projects Development 4 New Projects located in 4 provinces were acquired Total 146 Projects spanning across 17 provinces, autonomous regions and municipalities Province Project Connectable Total connectable population Population 65,625,000 Guangdong Dongguan Dongkeng Town 100,000 (東莞東坑鎮) Guangxi
Slide 13: New Projects Development
New Projects Development Project Dongguan Dongkeng Wuzhou Imported Renewable Qingyuan County Western Shangrao Economic Town (東莞東坑鎮) Resources Processing Park Industrial Zone B Development Zone (梧州進口再生資源加工園區) (清苑縣西部工業區B區) (上饒經濟開發區) Province Guangdong Guangxi Hebei Jiangxi Connectable Population 100,0
Slide 14: North America Refuelling Business
North America Refuelling Business Gas Sales Volume (‘000 DGE) Payback calculation for LNG trucks Average diesel price1 (USD/gallon) 2.5 Average LNG price2 (USD/DGE) 2.3 Spread (USD/DGE) 0.2 Additional saving with tax rebate 0.7 Average miles travelled (miles/year) 100,000 LNG consumption (DGE/year)
Slide 15: Financial Highlights
CONTENTS 1. Investment Highlights 2. Operational Review 3. Financial Highlights 4. Appendix
Slide 16: Financial Highlights
Financial Highlights (RMB million) 1H2015 1H2014 Change Revenue 15,887 14,351 10.7% Gross Profit 3,243 2,938 10.4% EBITDA 3,086 2,668 15.7% EBIT 2,555 2,255 13.3% Profit attributable to owners of 1,227 1,214 1.0% the Company EPS - Basic (RMB) 1.13 1.12 1.0% 15
Slide 17: Revenue Breakdown
Revenue Breakdown 2014 1H2015 2013 1H2015 1H2014 Core Operating Segments Change (RMB mil) (RMB mil) Gas connection 2,557 2,122 20.5% Sales of piped gas 9,625 9,070 6.1% Vehicle gas refuelling 1,959 1,810 8.2% stations Wholesale of gas 1,553 1,139 36.3% Revenue attributable to gas sales accounted f
Slide 18: High-Quality Customer Mix (By Revenue)
High-Quality Customer Mix (By Revenue) Residential customers Vehicle gas refuelling stations Commercial / Industrial “C/I” customers Wholesale of gas 1H2015 2014 2013 Gas connection Gas sales 17
Slide 19: Margin Analysis
Margin Analysis Gross profit margin Net profit margin 20.4% (1H2014: 20.5%) 9.8% (1H2014: 10.7%) Margins analysis Gross profit margin: Stripping out impact from North America refuelling business, gross profit margin in 1H2015 was 20.6%, remained stable compared with the same period of last year Ne
Slide 20: Financial Resources and Liquidity
Financial Resources and Liquidity (RMB billion) At 30 Jun 2015 At 31 Dec 2014 Change Cash on hand 6.33 10.62 -40.4% A/R Days 16 15 1 Total Debts 14.26 14.50 -1.7% - Short-term loans 1.50 1.53 -2.0% - Long-term loans 2.35 2.67 -12.0% - 10-year bonds 4.52 4.52 − - Convertible bonds 3.47 3.36 3.3% - 5-
Slide 21: Refinancing Plan
Refinancing Plan As of 30 Jun 2015 Refinancing Plan (RMB billion) Total Debt 14.26 Short-term loans: • We have RMB6.33 billion cash on hand, which is enough to refinance the short-term Subsidiary level 1.50 loans loans • 5-year medium term notes which will be expired in 2017 at 5.55% per annum • 7-y
Slide 22: Debt Structure Analysis
Debt Structure Analysis Debt Structure Reduced to US$65 million after the repurchase exercise in Oct RMB Loans US$ million 2015 21.0% USD Loans 79.0% After the repurchase of US$400 million bond, remaining US$ debt amounted to US$1,461 million, representing around 64% of total debt. 21
Slide 23: CAPEX
CAPEX 4.23 4 3.57 3.15 3.5 3 2.65 RMB billion 2.5 2.10 1.69 1.69 2 1.42 1.28 1.5 1.02 1.13 1 0.5 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 1H2015 Capex incurred during the period excluded the RMB4 billion investment in Sinopec Marketing The Group was free cash flow break-even in 1H2015
Slide 24: Appendix
CONTENTS 1. Investment Highlights 2. Operational Review 3. Financial Highlights 4. Appendix
Slide 25: Latest Benchmark City-gate Price
Latest Benchmark City-gate Price Province From 1 April 2015 From 20 Province From 1 April 2015 From 20 November 2015 November 2015 onward onward Unit: RMB (RMB/m3 Incl. 13% VAT) Henan 2.71 2.01 Beijing 2.70 2.00 Hubei 2.66 1.96 Tianjin 2.70 2.00 Hunan 2.66 1.96 Hebei 2.68 1.98 Guangdong 2.88 2.18 Sh
Slide 26: Economics of Natural Gas as Transportation Fuels
Economics of Natural Gas as Transportation Fuels Payback calculation of a CNG taxi Payback calculation of a new LNG truck Total number of CNG stations by ENN 294 Total number of LNG stations by ENN 249 Average gasoline price (RMB/litre) 6.1 Average diesel price (RMB/litre) 5.7 Average CNG price (RMB
Slide 27: Gas Delivery Process
Gas Delivery Process Vehicle & ship gas users 26
Slide 28: 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 29: North America Refuelling Business
North America Refuelling Business 28
Slide 30: Conversion factors
Conversion factors Conversion of NG to Fuels other fuels in terms of Coal Fuel oil LPG Diesel Gasoline Electricity same heating capacity Heating capacity 4,500kcal/kg 10,800kcal/kg 11,000kcal/kg 10,400kcal/kg 10,264kcal/kg 860kcal/kWh 1 cubic meter of NG* = 2.0kg 0.83kg 0.82kg 0.87kg 0.88kg 10.47kWh
Slide 31: Awards & Honors
Awards & Honors 2015 All-Asia Executive Team Ranking: 2013 China’s Best CEO Best CFO, Sell Side Rank no. 2 & Buy Side Rank no. Forbes 2012 Asia’s Fab 50 3 (Power Sector) China Affiliate of the 2014 All-Asia Executive Team Ranking: Balanced Scorecard “Star Organisation of Strategy Execution in China”
Slide 32: ENN Energy – Share Price Performance
ENN Energy – Share Price Performance Market Capitalization (as at 14 August 2015): HK$48.7 billion 4,500 ENN Energy 4,000 3,500 3,000 2,500 2,000 Hang Seng China Enterprise Index Hang Seng Index 1,500 1,000 500 0 ENN Energy HSI HSCE 31
Slide 33: 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