Longyuan Power Group Corporation Limited convenes the 2018 interim results conference in Hong Kong on 22, Aug. Qiao Baoping, Party Secretary and Chairman of CHN Energy Group and Chairman of Longyuan Power, attends the meeting and delivers an important speech. Chen Bin, Chief Accountant and Member of the Party Group of CHN Energy and Chairman of the Supervisory Committee at Longyuan Power, attends the meeting as a guest. Huang Qun, Executive Director and Deputy General Manager of Longyuan Power, introduces the company's operating results in the first half of 2018. The meeting is also attended by others including Heads of relevant departments of CHN Energy, as well as directors, supervisors, secretary of the board of directors and chief accountant of Longyuan Power. Other participants also attend the conference including Bloomberg, Ta Kung Pao, ASSTOCKS and other 13 mainstream financial medias, as well as representatives and analysts from more than 170 international investment institutions including Goldman Sachs, SBC (Swiss Bank Corporation), J.P. Morgan Chase & Co., Bank of America Merrill Lynch, Citibank and Morgan Stanley.
In his speech, Qiao Baoping pointed out that under complex domestic and international economic situation in the first half of the year, Longyuan Power took the initiative to respond to the new situation of electric power reform and development, fully grasped the national policy on new energy development, conscientiously implemented the strategic deployment of CHN Energy Group, strengthened management, deepened reform and innovation, and maintained a sound momentum of business development.
In the first half of 2018, Longyuan generated 13.363 billion yuan in operating revenue, with an increase of 8.5 percent year-on-year. The profit before tax reached 4.372 billion yuan, with a year-on-year increase of 28.3%, which was the best performance showed in the same period. Net profit of attributable equity holders reached 3.193 billion yuan, with a year-on-year increase of 28.0% and earning per share of 0.3823 yuan. The company has achieved good results in the following aspects: Firstly, it has strengthened safety management, promoted management improvement and greatly increased wind power generation. In terms of system construction, education and training, special inspection and safety culture, the company has made great efforts to conduct supervision and inspection on safety production, improve employees' safety awareness, refine job safety responsibilities, strengthen the implementation of enterprise responsibility system, and ensure the stability of the company's safety situation. The company has continuously improved the equipment management ability and innovated the wind power equipment maintenance system. The company has strengthened equipment reliability management, made solid progress in the construction of intelligent wind farm, reinforced the management of equipment defects, optimized and refined the standard assessment, strictly implemented dual controls on grid curtailment rate and limit, and has achieved practical results on grid curtailment. In the first half of 2018, the company recorded total power generation 25.830 billion kilowatt-hours, including 20.789 billion kilowatt-hours of wind power generation, with an increase of 21.55% over the same period of last year; average wind power utilization hours reached 1,181 hours, with an increase of 151 hours over the same period of last year, 38 hours higher than the average utilization hours in the industry.
Secondly, we have strictly followed our strategies, highlighted quality benefits and pushed forward the optimization of the distribution of wind power. The company innovated its thoughts on development, implemented the layout optimization strategy, achieved the development pattern that is characterized by expansion nation-wide and dispersion provincially", carried out the wind power work in 31 provinces and regions, covering the whole country (except Hong Kong, Macao and Taiwan).At the same time, the company has enlarged the proportion of projects in low wind speed areas and non- electricity restricted areas, and continuously optimized the layout of wind power. In the first half of 2018, in the wind power project approval plan of the provincial energy bureaus that have issued the wind power construction plan for 2018, the company had nine projects included with a total capacity of 490 MW, all locating in the non-power-restricted areas. An additional 330 MW of wind power projects were approved. As of June 30, 2018, the company had wind power projects of 7.48 GW approved but not yet put into operation.
Thirdly, the company has implemented strict quality management, strengthened environmental control and put great efforts to build high-quality projects. The company steadily promoted the construction of wind power projects. By implementing a series of measures including scientific optimization design, strengthening supervision and enhancing equipment supervision, the company has solved problems found through timely coordination, which ensures the quality of the project. In the process of construction, the company has strengthened risk management and control of project environment, strictly implemented measures of environmental protection and water conservation, and built ecological wind farms nationwide and realized green and sustainable development. In June 2018, the wind power project of Shandong Longyuan with an installed capacity of 98.2 MW in Yushan and Qingyun Towns, Linshu County, the wind power project of Guangxi Longyuan with an installed capacity of 48 MW in Liujing Town, Heng County and the wind power project with an installed capacity of 47.5 MW in Beibao Town, Chongming County, Shanghai of the Group obtained the "China Quality Power Project Award". This award is the highest prize for project quality in the power construction industry in China, and the company is the new energy company with most awards granted in 2018. As of June 30, 2018, the company holds 20,520 MW of installed capacity, including 18,395 MW of wind power holding capacity, 1,875 MW of thermal power holding capacity and 250 MW of other renewable energy holding capacity.
Fourthly, the company has adopted innovation marketing strategy, implemented measures to maintain high quantity while controlling the price, and its economic benefits have steadily increased. In the first half of 2018, the average on-grid tariff of all power generation businesses of the company reached RMB 455/MWh (excluding VAT), down 1 yuan/MWh. The company's average on-grid tariff (excluding VAT) for wind power reached 478 yuan/MWh, down 8 yuan/MWh from a year earlier, mainly due to improved power rationing, prompting an increase in electricity sales from the same period in 2017 in regions with low electricity prices and an increase in electricity sales from the same period of last year in regions where wind power is traded. The average coal power on-grid tariff was 336 yuan/MWh (excluding VAT), down by 2 yuan/MWh year-on-year. This is mainly due to the increase of direct power supply and the increase of benchmark electricity price for desulfurization and denitration coal-fired units.
Fifthly, the company has conducted innovation fund management, strictly controlled fund risk, enabling the company to maintain an advantage among its peers in terms of capital cost. Facing the external financial situation of "deleveraging, stressing on regulation", the company has fully expanded the financing channel, unceasingly innovated the fund management mode, enabling the company to effectively control the capital cost. The company has continued to expand financing channels, successfully hold the third green energy financing summit, strengthened links with major financial market partners, enabling the company to sufficiently receive more credit granting from financial institutions; the company has unswervingly made great efforts to deepen financing innovation, promote recycled factoring business and asset securitization, provide supply chain financial and other innovative products, revitalized stocks should receive new energy subsidies, optimize liquidity indicators; optimize the fine operation of funds to realize the full coverage of large-sum fund revenue and expenditure plan at home and abroad, and explore the time value of funds; strengthened fund risk management and control, and expanded long-term financing ratio to ensure the safety of the capital chain.
Sixthly, the company has implemented innovation-driven strategy, strengthened the transformation of achievements, and continuously improved the ability of science and technology support. Under the new situation, the company has continued to promote technological innovation in light of the new requirements for scientific and technological innovation put forward by CHN Energy Group. Focusing on the company's development needs, the company has implemented the principle of scientific research serving production to keep a close eye on the quality of the projects. A total of 6 independent innovation and technology projects have been approved by CHN Energy Group, the largest in all years. In the first half of the year, the scientific and technological achievements were fruitful. As of the end of June 2018, the company obtained one newly authorized invention patent and 18 utility model patents. Two standards, the "Guidelines on Vibration Evaluation of Wind Turbine" and the "Post-evaluation Procedures for Photovoltaic Power Station Equipment", in the energy industry prepared by the company were approved by the NEA for implementation. So far, a total of 42 national and industry standards have been formulated by the company.
Seventhly, the company has strengthened investment risk control, steadily expanded overseas markets and continuously enhanced international competitiveness. The company thoroughly implements the risk prevention and control requirements of SASAC, and steadily carried out overseas business according to the deployment of CHN Energy Group. The company strengthened project risk assessment, and actively expanded the wind power market along the "Belt and Road" including the Central and Eastern Europe, Central Asia and the American countries. In the first half of 2018, Devlin Wind Farm in Canada recorded total power generation of 146 GWh. As of 30, June, it has maintained safety production for a total of 1,307 days. The 244.5 MW project in De Aar, South Africa maintained a sound operation in safety production for 181 days. The production and operation indicators performed in good conditions, and the accumulated power generation reached 350 GWh.
At the press conference on the interim results, Longyuan Power specified that in the second half of this year it will further study and carry out the guidelines set forth in the 19th National Congress of the CPC. Under the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, it will unswervingly adhere to the leadership of the Party, strengthen the Party's construction, adhere to the general work guideline of making progress while maintaining stability, adopt a new vision for development, innovate the management system and mechanism, promote the improvement of quality and efficiency in a solid manner, so as to achieve high-quality development, and ensure the accomplishment of the annual goals and tasks. In the second half of 2018, the company will focus on the following tasks: first, to consolidate and build a solid foundation for safety production; second, to comprehensively enhance electric power saving; third, to strengthen asset management; fourth, to improve the quality of early work; fifth, to create high-quality projects; sixth, to adhere to the innovation-driven strategy; seventh, to deepen strict governance of enterprises in accordance with the rule of law; and eighth, to comprehensively strengthen party building.