Puxing Clean Energy Announces 2019 Annual Results and Proposed Change of Company Name

Net Profit increased by 20.3% to RMB 54.85
million

Declared a final dividend of HK$0.04

Financial highlights:

RMB’000	For the year ended 31 December
	2019	2018	Change
Revenue	292,209	281,625	+3.8%
Profit from operations	101,612	93,733	+8.4%
Profit attributable to equity shareholders of the Company	54,854	45,580	+20.3%
Basic/diluted earnings per share (RMB)	0.12	0.099	+21.2%
Final dividend (HK$)	0.04	0.035	+14.3%

 

HONG KONG, CHINA – Media OutReach – 31 March 2020 – Puxing Clean Energy Limited (“Puxing Clean Energy” or the
“Company”, together with its subsidiaries, the “Group”; stock code: 00090), one
of the leading clean energy providers in Zhejiang Province, is pleased to announce
its annual results for the year ended 31 December 2019 (the “Year”).

 

Revenue of the Group for the Year amounted to
RMB292,209,000, representing an increase of 3.76% as compared with the previous
year which was attributable to the decrease in output VAT rate applicable to
the main business of the Group and an increase in the heat selling price during
the Year. Benefiting from the decrease in finance expenses and the positive
influences of adjustments in VAT rates during the Year, the profit attributable
to equity shareholders of the Company for the Year was RMB54,854,000,
representing an increase of 20.35%. The basic and diluted earnings per share of
the Company amounted to RMB0.12 (2018: RMB0.099). The Board recommended the
payment of a final dividend of HK$0.04 per share (2018: HK$0.035) for the Year,
representing an increase of 14.29%.

 

With the overall economic restructuring and the structural
adjustment in electricity procurement demand of Zhejiang Province in 2019, the
relevant government departments in Zhejiang Province optimised and adjusted the
annual production plan of the Group’s four power plants to meet the maximum
demand within the power grid during the Year. The Group’s overall power
generation in 2019 decreased by 5.07% to 84,015MWh as compared to 88,505MWh in
the previous year. Meanwhile, in view of the overall decrease in electricity
generation during the Year, the consumption of natural gas for electricity
generation decreased by 8.82% to 19,293,888m³ from 21,160,000m³
in the previous year.

 

As export enterprises for the Year had less demand for heat
consumption under the influence of Sino-US trade war, the Group’s heat sales
volume during the Year decreased by 6.41% to 97,639 tons. In order to increase
profit from the heating business, the Group raised the heat selling price
during the Year. The average selling price of steam for the Year (inclusive of
VAT) was approximately RMB322.28/ton, representing an increase of 18.84% as compared
to that in the previous year. During the Year, benefiting from the rise in heat
selling price, notwithstanding the heat sales volume decreased by 6.41% to
97,639 tons, the revenue from sales of heat for the Year increased by 10.97% to
RMB28,740,000 with an increase in the gross margin of 7.05 percentage points to
10.23%. Given the decrease in heat sales volume during the Year, the
consumption of natural gas for heating decreased by 7.89% to 9,175,600m³.

The Group’s photovoltaics production volume was
approximately 645MWh for the Year (2018: 420MWh), of which approximately 89MWh
(2018: 75MWh) was sold to the power grid. During the Year, the Group saved
power consumption cost of RMB302,000 (2018: RMB185,000) from the above
photovoltaic power generation, and realised a revenue from sales of electricity
of RMB174,000 (2018: RMB106,000).

 

During the Year, the Zhejiang Provincial Development and
Reform Commission adjusted the volume tariff of natural gas power generating units
and gate station price for natural gas (inclusive of value-added tax (VAT)) in January,
April, November and December 2019, respectively. After several adjustments
during the Year, the volume tariff (inclusive of VAT) of each of Deneng Power
Plant, Bluesky Power Plant and Jingxing Power Plant under the Group was
adjusted from RMB0.79/kWh at the beginning of the Year to RMB0.686/kWh at the end
of the Year, representing a decrease of approximately 13.16%; the volume tariff
(inclusive of VAT) of Anji Power Plant was adjusted from RMB0.73/kWh at the
beginning of the Year to RMB0.626/kWh at the end of the Year, representing a
decrease of approximately 14.25%; the price of natural gas (inclusive of VAT)
of power plants under the Group was also lowered from RMB3.27/m³ at
the beginning of the Year to RMB2.88/m³ at the end of the Year,
representing a decrease of approximately 11.93%; the capacity tariff (inclusive
of VAT) of the power plants remained unchanged.

 

During the Year, due to the rise in average natural gas price
(inclusive VAT) for the Year, the Group’s average unit fuel cost for power
generation was approximately RMB587.99/MWh (2018: approximately RMB524.93/MWh),
representing an increase of 12.01% as compared to the previous year; the
average unit fuel cost for heating was approximately RMB240.76/ton (2018:
approximately RMB219.93/ton), representing an increase of 9.47% as compared to the
previous year. The fuel costs for the Year amounted to RMB72,908,000, representing
an increase of 5.05% as compared to that in the previous year. Fuel costs
accounted for 98.51% of the related revenue (i.e. volume tariff revenue (excluded
revenue from photovoltaics power generation) and revenue from sales of heat),
representing a decrease of 3.29 percentage points as compared to 101.80% in the
previous year.

 

To better reflect the Group’s vision of developing into an integrated
energy supplier, the Board proposed to change the name of the Company from “Puxing
Clean Energy Limited” to “Puxing Energy Limited” and to change the dual foreign
name in Chinese of the Company from “普星潔能有限公司” to “普星能量有限公司”. The proposed change of company name is subject to the shareholders’
and the Registrar of Companies in the Cayman Islands’ approval.

 

Mr. Wei Junyong, Chairman of Puxing Clean Energy, concluded,
“We believe that the natural gas power generation business is still a promising
industry in the next five to ten years. As an enterprise with its core development
of providing integrated energy, we wholeheartedly embrace the great energy era
and will transform into an integrated energy supplier based on the core philosophy
of ‘Energy + Technology’ to develop diverse energy businesses and instill new
energy into the Group for enhancing its long-term growth potential and value to
shareholders. In the coming years, apart from focusing on expanding its installed
capacity and heating business, the Group will pursue new businesses such as
auxiliary power service, energy contracts management and energy storage as its
future development goals in order to maximise benefits and returns to
shareholders with its utmost efforts.”

 

About Puxing Clean Energy

Puxing
Clean Energy is a leading clean energy provider in Zhejiang Province. It is
mainly engaged in development, operation and management of natural gas-fired
power plants. Presently, the Group owns four natural gas-fired power plants with
a total installed capacity of approximately 458MW (including 578kW rooftop
photovoltaic power generation facilities installed in 2018) and a maximum heating
capacity of approximately 160 tons per hour.