Towngas Smart Energy Company Limited · HKEX:1083
Towngas Smart Energy — Towngas China Company — H1 2020 Earnings Presentation
24 slides from Towngas Smart Energy's earnings presentation, 2020
Slide 1: Towngas China 2020 Interim Results Presentation
Towngas China (1083.hk) 2020 Interim 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 68.21% • Major city-gas company in Towngas China mainland China (1083.hk) 3
Slide 4: 2 projects added, total in 21 provincial regions
Heilongjiang 2 projects added, total 128 projects in 21 provincial regions Jilin Liaoning Hebei Total Inner Mongolia Beijing projects New Projects Shanxi City-gas 98 - Shandong Midstream 4 - Shaanxi Henan Distributed 1. Eastern Park of Tongling Economic and Technological Anhui Jiangsu 19 Development
Slide 5: Project count growth 2006 to 2020 YTD
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 YTD 25 37 40 47 61 66 74 87 97 102 104 105 115 126 128 140 Injection from HKCG 2 120 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: 1H2020 key highlights
Operating Profit before Finance Costs: HK$824Mn -18% Gas Sales Volume Total Projects Total Customers New Connections -2.6% +2 +0.3Mn +0.36Mn 7
Slide 8: 1H2020 results versus 1H2019
(HK$ Mn) 1H2020 1H2019 Change Turnover Gas Sales 4,810 5,619 -14% Connection Fees 753 893 -16% 5,563 6,512 -15% Operating Profit 824 1,003 -18% Corporate Overheads & Finance Costs (243) (247) - Profit Attributable to Shareholders 581 756 -23% Basic EPS (HK cents per share) 20.23 26.89 -25% 8
Slide 9: Average gas margin FY2019 and 1H
FY2019 1H 7.40 -4.1% -4.5% 7.20 7.00 FY Average 6 months 6.80 6.91 Average 7.04 6.60 6.40 6.20 6.00 2019 Source: Corporate data 9
Slide 10: Financial position, credit ratings and share data
TCCL (1083 HK) 30 Jun 31 Dec 30 Jun 31 Dec Change Change 2020 2019 2020 2019 HK$ Bn HK$ Bn Total assets 38.2 38.2 0% Share price (HK$) 3.50 5.40 -35% Net asset value 19.8 20.3 -3% Market cap. (HK$ Bn) 10.0 15.5 -35% Cash and Bank 2.4 2.0 +22% No. of Shares (Bn) 2.87 2.87 - Total borrowings 10.5 10.2
Slide 11: Gas Sales Volume (Bn m³)
(Bn m³) 1H19 1H20 Change Industrial 3.21 3.25 +12% Commercial 0.96 0.70 -27.2% Residential 1.45 1.51 +4.4% DES 0.04 0.05 +27.4% Total 5.66 5.51 -2.6% 12 11.1 10.0 10 8.4 Gas Sales Volume (Bn m³) 8 7.1 6.5 6.6 5.9 6 5.3 5.65 5.51 4.7 4.0 4 3.2 2.7 2.1 2 0 2007 2008 2009 2010 2011 2012 2013 2014 2015
Slide 12: Gas Sales Volume Mix and Productivity 1H20
Gas Sales Volume Mix (%) Productivity Customers No.(LHS) Gas Volume/Employee (RHS) DES Residential Commercial Industrial (Mn) (‘000 m³) 16 501 550 488 14 500 27% 12 450 26% 400 10 350 1H19 1H20 8 300 17% 57% 13% 59% 6 11.0 10.7 250 4 200 2 150 0.6% 1% 0 - 1H19 1H20 * All JVs (100%) 12
Slide 13: Manufacturing PMI and real estate investment
Investment of Real Estate , Manufacturing PMI Accumulated Growth Rate(%) 55 15 52.0 10.9 10.6 10.5 10.5 10.3 10.2 9.9 50.8 50.6 50.9 51.1 50.2 50.2 50.0 10 49.4 49.7 49.5 49.8 49.3 50 5 1.9 -0.3 45 0 -3.3 -5 -7.7 40 -10 35 35.7 -15 -16.3 -20 '19… 30 Jan-Nov Jan-Sep '20 Feb Jan-Jul Jan-Dec Jan-Mar Ja
Slide 14: Consumer Price Index and retail sales
Total Retail Sales of Consumer Consumer Price Index(%) Goods, Growth Rate(%) 6 15 5.4 5.2 9.8 10 7.6 7.5 7.8 8.0 8.0 7.2 5 4.5 4.5 4.3 5 3.8 4 0 -1.8 3.3 -2.8 3.0 2.7 2.8 2.8 3 2.5 -5 -7.5 2.4 -10 2 -15.8 -15 1 -20.5 -20 0 -25 '19 '19 '19 '19 '19 '19 '19 '20 '20 '20 '20 '20 '20 '19 '19 Jul '19 '19 '
Slide 15: Better unit gas margin
Better unit gas margin LNG Import Price (Rmb/ton) • Warmer winter 3,033.0 2,846.4 2,799.8 2,528.8 • Winter city-gate price hike 2,344.0 ended on 20 Feb, earlier than before • The average city-gate price increment is less than corresponding period last year '20 Jan-Feb '20 Mar '20 Apr '20 May '20 Jun
Slide 16: City-gas business opens up to foreign investors; national pipeline company
City-gas business fully open up for foreign investors • Lifted the restriction on majority foreign ownership for cities with population >500,000 • Eliminate the risk of taking away majority shareholding status when the city expands • City gas business will be more market oriented Setting up National
Slide 17: 7% ROA on city gas profits; 10% margin on connection fee
7% ROA on city gas profits • Apply to city-gas operation only • Most JVs have not reached that level • This policy is difficult to apply nationwide, in particular rapid changes in business environment 10% margin on connection fee • The latest general guideline issued by NDRC is quite liberal • Provi
Slide 18: Russian NG supply started in Dec 2019
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 Number of projects 24 >26 South-Western Volume (Bn m³) 2.6 4.8 Southern Volume Growth
Slide 19: Urbanization keeps property market momentum and gas consumption
Urbanization of 1% point per year keeps Population property market momentum and gas consumption 2,000 (Mn) 59.6% 60.6% 57.3% 58.5% 54.8% 56.1% 52.6% 53.7% 49.9% 51.3% 1,500 48.3% 47.0% 1,000 61% 500 47% - 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Urban Rural Urbanization% 19
Slide 20: Green Energy Integrated Services
• Green Energy Integrated Services Green Energy Integrated Services • Enhance energy efficiency with Business Growth more gas sales 3,500 • Projects Central space heating Central steam supply for industrial parks 2,000 Air-conditioning 1,500 Electricity 1,200 Pipelines for steam supply fro
Slide 21: Gas storage in Jintan, Jiangsu
Gas storage in Jintan, Jiangsu • 4 caverns in operation • Dual sources of supply: CNPC and Sinopec • To meet peak demand in winter • Sharing investment cost among JVs Jintan Underground NG Storage • National pipelines facilitate free flow of NG Project Information Cumulative • Phase 1-1 capacity: (3
Slide 22: Business Plan
Business Plan Chronic Health & Disease Wellness Smart High-tech Management Safety Medical Management Home Health Equipment Home Service Food Wearable Insurance Home- Towngas Health Hospital Smart Choice based Gas Home elderly care Monitoring Service Kitchen Service Helper service Devices Service Gas
Slide 23: Thank you
12MM IRD cf> Steere Towngas China Company Limited Thank you
Slide 24: Key Reforms: More Opportunities for Renewable Energy
Key Reforms in the following areas: Sales Technology More Opportunities for Supply System Wind Power and Solar Power Generation 管住中間、放開兩頭 Renewable Energy • Establish national and provincial independent power trading centres Decentralized Energy Systems • Progressive opening up power g
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