Wed Jun 19, 2019 17:19
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CHINA RES POWER (836)

Principal Activities

The Group is engaged in the development, construction and operation of power plants, including large-scale efficient coal-fired generation units, wind farms, hydro-electric plants, gas-fired power plants and photovoltaic power projects as well as construction and operation of coal mines.

Latest Results

The Group's profit attributable to shareholders for the year ended 31-12-2018 amounted to HKD 3.95 billion, a decrease of 14.6% compared with previous corresponding period. Basic earnings per share was HKD 0.8263. A final dividend of HKD 0.203 per share was declared. Turnover amounted to HKD 76.94 billion, an increase of 4.9% over the same period last year, gross profit margin up 0.5% to 46.9%. (Announcement Date: 22 Mar 2019)

Business Review - For the year ended December 31, 2018

The Group is engaged in the development, construction and operation of power plants, including large-scale efficient coal-fired generation units, wind farms, hydro-electric plants, gas-fired power plants and photovoltaic power projects as well as construction and operation of coal mines.

In 2018, due to slow capacity growth in thermal power generation and higher demand for electricity, the average utilisation hours for thermal generation units in China increased by 152 hours or 3.6% year-on-year to 4,361 hours. In addition to the power plants of the Group being large-scale efficient generation units, the Group also adopts internal management measures, enabling the Group to outperform every year. The average full-load equivalent utilisation hours of the subsidiary coal-fired power plants of the Group which were operational for the full year of 2018 reached 4,976 hours, representing an increase of 0.2% as compared to 4,964 hours in 2017, and exceeding the national average utilisation hours for thermal power plants by 615 hours.

In 2018, the average utilisation hours for wind power generation units in China reached 2,095 hours. Wind farms of the Group are mainly located in regions with low curtailment including eastern, central and southern China. The average full-load equivalent utilisation hours of our wind farms which were operational for the full year of 2018 reached 2,314 hours, exceeding the national average level for wind power generation units by 219 hours.

Generating capacity

As at 31 December 2018, the Group’s total attributable operational generation capacity was 37,438MW, of which, attributable operational generation capacity of the Group’s coal-fired power plants amounted to 29,815MW, accounting for 79.6%, and wind, hydro, photovoltaic and gas-fired capacity together accounting for 20.4%, representing an increase of 3.0 percentage points from the end of 2017.

During the year, the Group accelerated the development and construction of clean renewable energy. During the year, the generation capacity of newly commissioned wind and photovoltaic power projects reached 1,187MW and 173MW respectively. At the end of 2018, the Group’s attributable operational wind power generation capacity reached 6,816MW and wind power capacity under construction was 2,864MW; attributable operational photovoltaic generation capacity reached 448MW and photovoltaic capacity under construction was 8MW; attributable operational hydro-electric generation capacity reached 280MW and hydro-electric capacity under construction was 107MW.

During the year, the Group did not commission any new coal-fired power units.

Gross and net generation volume

The total gross generation volume and the total net generation volume of the Group’s subsidiary power plants amounted to 166,342,161MWh and 157,018,636MWh respectively in 2018, both representing an increase of 2.3% as compared to 2017, excluding the gross generation volume and the net generation volume of CR Liuzhi Power Plant, which was reclassified as an associate in December 2017.

In 2018, the total net generation volume of subsidiary power plants that participated in direct power supply (including bilateral long-term agreements and on-grid competitive bidding) amounted to 70,246,030MWh. The average tariff (exclusive of tax) of the direct power supply volumes was at a discount of approximately 9.7% as compared with the average approved on-grid tariff, which was lower than that for 2017.

Fuel costs

In 2018, due to the policy of reducing overcapacity in the coal industry, improvement in macro-economic growth and impact of restrictions on coal imports, the domestic coal prices remained at high levels throughout the year. Average unit fuel cost of the Group’s subsidiary coal-fired power plants was RMB220.5/MWh, representing a year-on-year increase of 3.1%. Average unit cost of standard coal was RMB729.1/tonne, representing an increase of 4.0% as compared to 2017.

In 2018, the average net generation standard coal consumption rate of the Group’s subsidiary coal-fired power plants was 299.54g/kWh, representing a decrease of 3.62g/kWh or 1.2% from 303.16g/kWh in 2017.

Environmental expenses

In 2018, the total amount of environmental expenses incurred by the Group’s subsidiary coal-fired power plants was RMB113 million, representing an increase of 6.8% as compared to 2017, which was mainly due to the change in the levy rates of some regions after the tax-for-fee reform.

As at the end of 2018, 24,643MW of two coal-fired units of the Group completed the installation for ultra-low emission reduction, accounting for approximately 98% of the attributable operational generation capacity of our subsidiary coal-fired power plants, further reducing the emission of sulfur dioxide, nitrogen oxide and particulates.

Coal mine operations

In 2018, the subsidiary and associate coal mines of the Group produced a total of approximately 15.11 million tonnes of coal (aggregation of each mine’s production volume), representing an increase of 0.6% as compared to 2017, of which, 13.02 million tonnes and 2.09 million tonnes of coal were produced by the subsidiary coal mines and the associate coal mines, respectively.

During the year, the Group transferred to Guoyuan Company, the equity interest in China Resources Coal and the four coal companies under China Resources Coal, namely Ruihua Energy, CR Liansheng, CR Shanxi and CR Taiyuan, and the Group also transferred its equity interest in CR Daning to CR Holdings thereby withdrawing from its entire coal operations in Shanxi.

Capital expenditure

In 2018, the cash capital expenditure of the Group amounted to approximately HK$17.56 billion, of which, HK$9.68 billion was used in the construction of wind farms, photovoltaic power plants and hydro-electric plants, HK$1.61 billion was used in upgrading the operating coal-fired power units for ultra-low emission reduction, safety and energy-saving and heat supply technology, approximately HK$5.24 billion was used in the construction of coal-fired power units, approximately HK$1.04 billion was used in the upgrade and construction of coal mines.

Business Outlook - For the year ended December 31, 2018

The power consumption in China in 2019 is expected to maintain a low to medium growth rate, with an overall ample power supply nationwide and more excessive supply in some regions.

In 2019, total volume of eliminated overcapacity of coal is expected to be reduced and advanced production capacity will be released into the market to ensure sufficient supply of coal. The growth in demand for coal will be affected by energy structure adjustments therefore is expected to slow down. Supply and demand of coal is transitioning from a period of tightness to a more balanced environment, as such, coal prices are expected to come down.

The Group expects to commission an attributable operational generation of 1,857MW of coal-fired and gas-fired power generation units including: 1x1,000MW ultra-supercritical generation unit in Caofeidian (Phase II), Hebei, 51% owned by the Group; 1x350MW heat and power co-generation unit in Yundong, Hebei, 90% owned by the Group; 2x660MW ultra-supercritical coal-fired power generation units of Wujianfang in Inner Mongolia, 70% owned by the Group; and 108MW gas-distributed engergy project in Changzhou, Jiangsu, 100% owned by the Group.

The Chinese Government has established the policy of on-grid tariff reduction to achieve grid-parity for wind power by 2020. In 2019, the Group will focus on continuing to accelerate the development and construction of wind power projects, with the aim of completing its major construction projects by the end of 2021. The Group targets to grow its clean energy business, primarily in wind power, to reach approximately 28% of its total attributable operational generation capacity by 2020.

As the Chinese power industry is under reform and will continue to upgrade, the Group will actively monitor the market and seek for development opportunities arising from the gradual liberalisation of the power retail business and new power distribution networks, and focus on the development of its power retail business and integrated energy services such as energy efficiency services and energy storage.

The cash capital expenditure of the Group for 2019 is expected to be approximately HK$19.0 billion, including approximately HK$13.7 billion for the construction of wind farms, photovoltaic power plants and hydro-electric power plants; approximately HK$1.3 billion for technical upgrades such as energy saving and efficiency improvement of coal-fired power units; approximately HK$3.0 billion for the construction of coal-fired power units; and approximately HK$1.0 billion for the transformation and construction of coal mines. The Group will control the pace of its capital expenditure based on macro-economic conditions of China, in particular domestic demand and supply of electricity, government policies for energy and related industries and the Group’s strategies, and make prompt and necessary adjustments based on external market conditions and general policies of the government.

Source: China Res Pow (00836) Annual Results Announcement

Business Nature

The Group is a fast growing independent power generation company incorporated in HK in August 2001 to invest, develop, own and operate large coal-fired power plants in the more affluent regions in China. As of 30 September 2003, the Group owns five power plants in commercial operation which give an attributable installed generation capacity of 1,545,MW and seven power plants under construction with an attributable installed generation capacity of 2,893 MW.

Prospect

The Group will continue to grow rapidly in the next couple of year. It aim to maximise its operation synergies in the areas of coal procurement, financial management, project development and human resources management, and maintain its leading position in the construction and operation cost in the power industry, in order to continue to deliver sustainable earning growth and create value for its shareholders.

Chairman
Li Ru Ge
Contact Info
Company Address:
Rooms 2001-2002, 20th Floor, China Resources Bldg, 26 Harbour Road, Wanchai, HK
Web: http://www.cr-power.com
Quote
HSI: 28,202.14 703.37
11.28
0.06 (0.5%)
As of16:15 19 Jun 2019
Open: 11.38 52Wk High: 16.28
Day High: 11.4 52Wk Low: 10.2
Day Low: 11.22 P/E: 13.651
Prev. Close: 11.22 Yield: 2.908%
Volume: 10.6M
Mkt Cap: 53.97B
Turnover: 119.64M NAV: 14.58
Quotes are delayed by at least 15 minutes.
Contact CHINA RES POWER
Company Address:
Rooms 2001-2002, 20th Floor, China Resources Bldg, 26 Harbour Road, Wanchai, HK
Web: http://www.cr-power.com

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