On March 31, Longyuan Power convened the Annual Results Release Conference of 2020 via teleconference in Beijing, and more than 200 analysts and investors attended the conference.
In 2020, Longyuan Power (the Company for short) seriously observed the overall work requirement “Stable-yet-progressive”, insisted on the new development notion, planned as whole and pushed ahead with pandemic control and operation & development work, and promoted the Company’s development into the world first-class enterprise in all aspects. As a result, the Company hit a historical high in multiple indicators and carved out a new pattern for reform and development. By December 31, 2020, Longyuan Power’s installed capacity had totaled 24,681MW, including 22,303MW in wind power, 1,875MW in thermal power, and 503MW in other renewable energies. In 2020, the Company’s operating revenue totaled CNY 28.667 billion, implying a year-on-year increase of 4.1%, with pre-tax profits of CNY 6.922 billion (a rise of 7.3% on a yearly basis) and net profits attributable to equity holders of CNY 5.025 billion (a rise of 10.0% on a yearly basis), which all reached the highest level in recent years.
Precise control over work safety, double victories in combat to pandemic and stabilization of output. Longyuan Power organically integrated safety and environmental protection oversight with pandemic prevention and control, and scientifically deployed, planned as whole, and pushed ahead with all tasks. Presently, the Company’s safety and environmental protection work keeps stable, with pandemic being under effective prevention and control. Focusing on digital transformation of production, the Company promoted reform in production organization mode, clarified the three-step goal (namely, Shoring up data foundation, realizing preventive maintenance, and achieving reliability and harmony in source grid), completed total data collection at wind turbines and booster stations, successfully put into production the new monitoring center, and created the new-type operation and management model featuring front-office monitoring on duty and back-office data analysis. To push ahead with the reform in regional operation inspection mode, the Company has set up 15 regional maintenance center and realized unattended operation in 30 wind farms. By keeping on stressing equipment renovation, the Company has greatly improved its equipment’s operation health level, with units’ unplanned downtime decreasing 86% from the beginning of the year. To actively cope with adverse influences of the pandemic for the year, the Company adopted multiple measures, for example, it formulated the administrative measure for electricity restriction, organized thematic analysis on electricity restriction, made innovations in annual assessment of marketing, and sorted out UHV transmission channels, etc. As a result, the Company’s electricity restriction was kept at a relatively low level. In 2020, the Company completed generating capacity of 53.066 billion KWH in total, of which, its generating capacity in wind power totaled 43.683 billion KWH, representing a year-on-year increase of 7.25%. Amid the backdrop that average wind speed decreased on a yearly basis, the Company’s average use time of wind power reached 2,239 hours, a rise of 50 hours from the same period a year earlier.
Optimize the acquisition of resources and achieve leap-forward development in both wind power and PV sectors. In 2020, the Company newly signed agreements for wind power and PV development of 51,590MW, nearly four times that in the same period a year earlier, of which, the wind power totaled 18,990MW, and the PV power totaled 32,600MW. In addition, the Company’s approved (recorded) projects totaled 3,169MW, hitting a historical high, of which the approved wind power amounted to 819MW, and the recorded PV power amounted to 2,350MW. Meanwhile, the Company procured levelized cost & bidding quota of 1,990MW, nearly seven times that in the same period a year earlier, of which, the wind power totaled 940MW, and the PV power totaled 1,050MW. Under the uniform deployment of China Energy Investment Corporation, the Company actively pressed ahead with planning and design of two Ten-Million-KW base projects. To be precise, the first batch of projects have been subjected to the feasibility study and review, and other projects have been placed on the Energy Cooperation Plan of the National Energy Administration and 14th Five-year Plan of the State Grid Corporation of China. In the meantime, the Company strengthened the acquisition of high-quality resources, autonomously planned 27 medium/small-scale base projects, and made historic breakthrough in reserve of new resources during this year.
Stabilize quality and quicken the progress in project management, protect environment and ensure steady cost and timely production: in 2020, the Company’s overall safety situation for project construction kept steady, with project quality and environmental protection level being advanced little by little. Throughout the year there were no significant or even more serious safety/quality/environmental protection accidents or group events that impact the social stability, there were no cases of COVID-19 infection, and the construction cost was controllable and under control. Under the influence of the COVID-19 pandemic, resumption of the overall project construction was postponed by more than 2 months. However, thanks to planning in advance before the resumption, scientific organization after the resumption, and active coordination during the resumption, the Company raised the hoisting and installation efficiency, and caught up with the node schedule, which laid a firm foundation for timely fulfilment of its production and electricity price stabilization task. Meanwhile, the Company further strengthened the project’s environmental protection work, fully completed the ecological optimization to these wind power projects that are distributed in 18 provinces, as well as planted 530,000 trees and 4.49 million shrubs. In addition to strictly implementing the “Three-Simultaneous” requirements about conservation of water and soil, the Company did a good job of acceptance and recording for water & soil conservation and environmental protection in accordance with laws, as well as achieved green and sustainable development. Statistical data show that the Company put into production projects of 2,523.6MW all the year round, hitting a historical high.
Adjust down tax rate, promote marketing, and keep steady the overall electricity price: in 2020, the Company’s average on-grid power tariff in power generation business was CNY 463/MWH (exclusive of VAT), a rise of CNY4/MWH from the same period a year earlier. Specifically, its average on-grid power tariff in wind power was CNY 487/MWH (exclusive of VAT), a rise of CNY 5/MWH from the same period a year earlier, which was mainly attributed to downward adjustment of VAT rate and increase of sales of the offshore wind power electricity at relatively high price from 2019; its average on-grid power tariff in thermal power was CNY 325/MWH (exclusive of VAT), a fall of CNY 11/MWH from the same period a year earlier, which was mainly attributed to increase of trading proportion of thermal power electricity and downward adjustment of the VAT rate.
Optimize stock liabilities amid the backdrop of QE and expand financing channel to highlight cost advantage: in 2020, affected by the pandemic, the national monetary policy?was moderately loose. By seizing this opportunity, the Company strengthened the management and control over intensive financing, made overall planning for the operation, as well as displaced and optimized the stock liabilities with interest to save financial costs. By virtue of the fund plan coordination mechanism based on the headquarters vertical management, the Company conducted ridged fund plan management to keep on raising the fund utilization efficiency and maximize the fund’s time value. In terms of financing, the Company focused on domestic and overseas capital markets to further expand the financing channel: it successfully issued 18 super?& short-term commercial papers, 2 medium-term notes, and 3 renewable green corporate bonds, so that the Company’s cost of funds was competitive in the industry all the year round. In addition, the Company successfully issued a bond at US$ 300 million, with a coupon rate of only 1.5%, and the IPO price was the minimum in recent 10 years as compared to other Asian bonds of the same rating and term. Among the super & short-term commercial papers issued by the Company there are two papers for pandemic prevention and control, which exemplifies the Company’s responsibilities and obligations to win the battle for pandemic prevention and control. Besides that, the Company actively revitalized the stock assets through financial instruments in the open market, for example, it successfully issued one asset-backed security (ABS) at CNY 713 million.
Make intensified efforts in development of core technologies and make breakthroughs in quality and quantity of technological achievements: the Company implemented a series of deployments of the national development strategy for technological innovations, as well as laid more stress on technological innovation. Last year, the Company put on record 31 technological innovation projects, implying a sharp rise of the number of such projects from the same period a year earlier. So far, 9 industrial standards including Codes on operation safety of offshore wind farm, which were authored mainly by the Company, have been approved and released by the National Energy Administration, thus there are a total of 75 national industrial standards in which Longyuan Power plays a vital role or partakes. Among them, 31 standards have been released, marking the Company firmly occupies the commanding height of industrial technologies. Particularly, the Company took part in preparation of the IEC International Standard PT 62862-1-4 (Section 1-4: Thermal Insulation of Photo-thermal Power Station) and made breakthrough in formulation of international standards. In 2020, the Company newly registered 21 technological patents, including 3 authorized patents for invention and 18 patents for utility models. Moreover, the Company issued 60-plus dissertations on a variety of technical journals and took part in the “Key Technologies and Engineering Application of Renewable Energy Independent Power Supply System in Qinghai-Tibet Region” project, which was conferred upon the Second Prize of the National Award for Progress in Science and Technology. It is worth pointing out that the Company’s technological achievement “Research and Application of Key Technologies for Smart Wind Power Operation based on Group-level Big Data” was subjected to technical appraisal by Chinese Society for Electrical Engineering and China Electricity Council and rated “International Leading”.
Stress overseas pandemic prevention and control, ensure operation, quicken to make deployment, and seek to make breakthroughs: the Company actively overcame adverse influences resulting from the COVID-19 pandemic, persisted in implementing the “Go Global” strategy, carried out business exploitation step by step in countries along the Belt & Road, and made active achievements in all work. In Ukraine, the Company’s Yuzhne Wind Power Project was successfully launched, and the project construction was in an orderly progress, with hoisting and installation of the first wind turbine being completed. In addition, proposal for a batch of wind power and PV projects (including Ukraine South Wind Power Project) have been approved. Presently, the Company is actively tapping potential of key markets including Central and Eastern Europe, Southeast Asia, and Latin America, etc., in efforts to achieve regional progressive development and make breakthroughs in key markets. Moreover, the Company stressed management to overseas assets, effectively prevented and controlled spread of the pandemic and risks in production, and deepened the cooperation and exchange, so that its projects in service are running well. Specifically, Longyuan Power Canada Dephlin Wind Power Project completed generating capacity of 282 GWH throughout the year, overfulfilling the annual plan, with annual utilization time of 2,845 hours and accumulative work safety duration of 2,222 days; Longyuan Power South Africa De Aar Wind Power Project completed generating capacity of 752GWH throughout the year, with annual utilization time of 3,075 hours and cumulative work safety duration of 1,157 days.
In 2021 and for some time to come, the Company will follow the Xi Jinping’s Thought on Socialism with Chinese Characteristics for a New Era to further implement the new development notion, actively merge into new development pattern, earnestly put into practice China Energy’s “One Goal, Three-oriented and Five-centered, Seven First-class” development strategy, and focus on the overall goal of developing into the world first-class new-energy company with global competitiveness. Meanwhile, the Company will keep taking high-quality development as the theme, building of value-oriented enterprise as the orientation, faster face in digital transformation as the foothold, and more stress on all-around leadership by the Party as the foundation, to accelerate establishment of scientific, full-fledged, and high-efficiency management system. Also, the Company will seize opportunities, work in a down-to-earth manner, and strive to achieve high-quality development and make more contributions to the Group’s development towards the world first-class demonstration enterprise. To ensure completion of the business goal for 2021, the Company will prioritize the work below: enhance the bottom line and redline consciousness, and strengthen the management and control over safety and environmental protection; have a correct knowledge about development opportunities, and make the new energy business stronger, better, and bigger; strengthen the production and operation management, and strongly improve quality and efficiency and stabilize the growth; keep on deepening the reform and making breakthroughs, and further raise the management efficiency; insist on the innovation-driven strategy, and quicken the pace to foster new kinetic energy for growth; bring into full play the guiding role of the Party Building, and pull together for the common goal.