Strengthen coal-fired power synergy and deepen industrial upgrading Guodian builds a world-class comprehensive power company

Guodian Power has won the Golden Bull Listed Company Award 11 times and won the special award of the 20th Golden Bull Award-China Listed Company Golden Bull Foundation Evergreen Award. A reporter from China Securities News recently interviewed Feng Shuchen, general manager of Guodian Electric Power, on hot topics in company operations and capital operations that the market is concerned about.

In recent years, coal prices have been at a relatively high level, and coal power companies have generally weakened performance. As a leading company in the thermal power industry, Guodian Power has achieved bucking growth in revenue. Feng Shuchen told a reporter from China Securities News that Guodian Power’s controlling shareholder Guodian Group completed the merger and reorganization with Shenhua Group in 2018, and coal power strategic synergies have gradually emerged. At present, the reorganization of Guodian Power and China Shenhua is advancing rapidly. After the establishment of the joint venture company at the end of this year, the company’s installed power generation capacity will exceed 80 million kilowatts, achieving a leap-forward growth. At the same time, Guodian Power vigorously develops wind power, hydropower and other clean and renewable energy sources, vigorously implements thermal power industry upgrades, and promotes “safety” The construction of a "type six" green coal-fired power station featuring high efficiency, environmental protection, low carbon, flexibility, and intelligence will realize the growth of both corporate economic and social benefits. At present, the company's installed hydropower, wind power, and photovoltaic power generation capacity has exceeded 1/3 of the company's total installed capacity; the thermal power sector has basically achieved full coverage of high-quality production capacity and ultra-low pollutant emissions. In the future, the company will coordinate the dual “engines” of industry and capital, make full use of the domestic and international capital markets, and accelerate the construction of a world-class comprehensive electric power company with global competitiveness.

 

Restructuring brings opportunities for leapfrog growth

"After the merger and reorganization of Guodian Group and Shenhua Group to establish the National Energy Group, the strategic synergies of coal power have gradually emerged." Feng Shuchen said, "The reorganization is conducive to alleviating the long-term contradiction between coal and power and achieving synergy between upstream and downstream industries. The company currently supplies coal for electricity Both volume and price are relatively stable, which is conducive to stabilizing the company’s operating performance."

As fuel costs account for a large share of the cost of thermal power companies, thermal power companies and coal companies often show performance seesaw effects. With the advancement of supply-side structural reforms, some small coal mines that did not meet the standard have been closed, and total coal output has declined. The regional and seasonal imbalance of supply and demand in the coal market has led to a relatively high level of coal prices in the past two years. Overlapping the structural surplus of thermal power industry capacity, thermal power companies generally have weak performance.

Guodian Power's performance is remarkable. In the first three quarters of 2018, the company achieved operating income of 48.059 billion yuan, a year-on-year increase of 8.53%; net profit attributable to shareholders of listed companies was 2.514 billion yuan, a year-on-year increase of 8.7%. The cash flow is in good condition. The net cash flow generated by the company's operating activities in the first three quarters reached 13.964 billion yuan.

"After the reorganization, the company will have more room for scale development." Feng Shuchen said, "According to the National Energy Group's strategic positioning of Guodian Power, Guodian Power is the integrated platform for the group's thermal power, hydropower and other conventional power industries. The National Energy Group plans to make five During the year, all eligible thermal power installed capacity will be injected into Guodian Power."

"Our reorganization with China Shenhua is advancing rapidly. After the establishment of the joint venture company at the end of this year, the company's installed capacity will increase from 54 million kilowatts to approximately 80 million kilowatts, achieving a scale leap." Feng Shuchen said.

"The substantial increase in installed capacity brings cost and scale advantages, and Guodian Power's competitiveness in the regional market is expected to be improved quickly." Feng Shuchen said.

Market participants believe that with the resolution of competition in the same industry, the formation of complementary industrial advantages, and the promotion of resource sharing, technological integration, and management coordination, Guodian's power market competitive advantages will be further highlighted.

Data shows that after the completion of the joint venture company's reorganization, Guodian Power's total assets will increase to 361.437 billion yuan, an increase of 30.63%; net assets will increase to 114.331 billion yuan, an increase of 54.49%, and the company's capital strength will be significantly enhanced. It is worth noting that after the reorganization, the company's asset-liability ratio will drop to 68.37%, a drop of 4.88 percentage points, and the asset structure will be further optimized.

"In the future, we will continue to deepen business cooperation, promote the integration of the industry within the group, promote the complementary development of various sectors, and further promote the synergy of coal and electricity." Feng Shuchen said.

 

Smart power generation enhances core competitiveness

Although in the traditional power industry, Guodian Power has always spared no effort in intelligent construction and strive to build the core competitiveness of the enterprise. In the monitoring room on the 20th floor of Guodian Power’s Beijing headquarters, a large wall-sized screen displays real-time production pictures and data of the company’s power plants and coal mines. The staff pays close attention to all kinds of information, and will deal with emergencies quickly.

"In recent years, the company's informatization and automation levels have continued to improve, and the construction of smart power plants has begun to take shape." Feng Shuchen said, "The Internet, big data, and artificial intelligence technologies are applied to the field of power generation. The company is located in Dongsheng Power Plant in Inner Mongolia and North China. The University of Electric Power and other universities and scientific research institutions have cooperated to launch the world's first intelligent distributed power plant control system, the intelligent DCS system, which is in a leading position in the world."

"The intelligent DCS system is to implement some control algorithms that could not be achieved in the past in this system to improve total factor productivity. The intelligent system has been put into trial operation and is constantly improving." Feng Shuchen said, "The company has a background in vigorously promoting the construction of smart power generation. In recent years, the identification of thermal power has changed. In the past, thermal power was positioned as a basic power source. Now it is required to transform thermal power to basic power plus peak-shaving power."

Feng Shuchen further explained, "The power consumption on the demand side of the power consumer has peaks and valleys, but the power supply equipment must be reliable and stable at all times. Electricity production, supply and marketing are completed at the same time, and cannot be stored. In the past, pumped storage power plants were mainly used to solve grid peak regulation. The problem is that the cost is too high and the capacity is limited. At present, in order to effectively use wind power and other new energy power and reduce wind and solar abandonment, thermal power must assume the dual role of basic power and peak-shaving power."

At the same time, the company actively promotes refined coal blending to achieve the optimal combination of coal sources and coal types, and strives to reduce fuel costs; projects such as digital coal yards, unmanned bucket turbines, and unmanned laboratories are also actively promoting. The main economic and technical indicators of the company's fuel have reached the advanced level of the industry. In addition, the company has achieved remarkable results in the construction of smart hydropower and smart wind power.

According to the person in charge of the relevant department of Guodian Electric Power, “The company's subsidiary Guodian Daduhe Company has built a river basin hydropower'one hub, multiple centers, four units' smart hydropower architecture, which has realized the automation of risk identification, intelligent decision-making management, and independent correction and upgrading. Smart operation form."

The person in charge said, “Many of the company’s wind power companies have adopted remote centralized monitoring systems to monitor the operation of wind turbines, fault alarms, production reports, performance analysis, benchmarking management, and single-machine management. Intelligent tracking of wind, video tracking and alarm of wind turbine."

"As a future-oriented company, Guodian Power will further increase investment in the construction of intelligent power plants and accelerate the pace of intelligent construction." Feng Shuchen said.

 

Increase the proportion of clean renewable energy power generation

Guodian Power’s performance has grown against the trend, in which industrial structure adjustment and optimization have played a significant role. Increasing the proportion of clean and renewable energy power generation and optimizing the thermal power business "two legs" complement each other.

"Hydropower, wind power and other new energy power generation business has become the company's main profit force." Feng Shuchen said, "The company has been vigorously developing clean and renewable energy power generation business in the past few years. Wind power started from scratch and has reached 5.7 million kilowatts of installed capacity through more than 8 years of hard work. At the end of this year, it will exceed 6 million kilowatts. Hydropower has grown from an initial installed capacity of more than 3 million kilowatts to the current 13.8 million kilowatts. Together, the installed capacity of hydropower and wind power has reached 37% of the company's total installed capacity. This ratio Ranked among the best among domestic listed power companies."

According to data, in the first three quarters of this year, Guodian Electric Power completed a total of 158.269 billion kWh of power generation, an increase of 5% year-on-year. Among them, hydropower and wind power generation have grown rapidly. The hydropower companies under their subsidiaries have completed a total of 37.705 billion kWh of power generation, a year-on-year increase of 15.55%; wind power companies have completed a cumulative power generation of 9.922 billion kWh, a year-on-year increase of 28.33%.

"Hydropower and wind power are more obviously affected by seasonal factors, and the status of thermal power as a basic power source cannot be shaken." Feng Shuchen said frankly. In the first three quarters of this year, Guodian Power’s thermal power companies grew steadily, generating 110.405 billion kilowatt-hours of electricity.

The business data reflects the background of structural excess capacity in the thermal power industry and increasing environmental pressures. Eliminating outdated thermal power units, promoting the upgrading of the thermal power industry, and reaching a leading level in terms of energy saving and environmental protection, for thermal power leading power companies, not only relates to the market prospects, but even involves the survival of the company.

"The company's thermal power construction has been adhering to the path of high-efficiency and green development for many years, and has made a lot of investment in equipment upgrades, reducing coal consumption, reducing pollutant emissions, and strengthening environmental protection." Feng Shuchen said, "The company's coal power equipment level is constantly improving. Regarding the transformation of stock assets, we will eliminate outdated production capacity. This year, the company has 3 old units with a single unit capacity of 200,000 kilowatts, which have been in operation for more than 30 years, are undergoing shutdown procedures; the company’s new generation units must be selected with high efficiency, energy saving and environmental protection. Capacity units. In 1997, the company’s largest coal-fired generating units at the initial stage of development was only 50,000 kilowatts. Now the proportion of coal-fired units with an installed capacity of more than 600,000 kilowatts has exceeded 60%, and the proportion of coal-fired units with a single unit capacity of more than 1 million kilowatts has reached 26 %."

“In 2017, the coal consumption of Guodian Power’s power supply reached 299.55 g/kWh, a decrease of 13.7 g/kWh compared with 2011, reaching the leading domestic level. The energy consumption level of Guodian Power’s Jiangsu Taizhou Phase II thermal power unit is currently the world’s best.” Feng Shuchen said.

"By the end of the year, all of the company’s thermal power units in operation will achieve ultra-low emissions, and emission indicators such as nitrogen oxides, sulfur dioxide, and soot concentrations will meet the emission standards for gas-fired units, and the coal-fired energy-saving and emission-reduction upgrade and transformation action plan will be realized two years in advance. Determined goal." Feng Shuchen said.

The effect of optimizing the regional layout of the industry on the company's operating efficiency cannot be ignored. In addition to actively promoting hydropower and wind power projects in the southwest and northwest with sufficient hydropower and wind resources, Feng Shuchen said that Guodian Power has two priority principles for the selection of the regional layout of thermal power: "First, it is advantageous to build plants in power load centers. Electricity consumption. In recent years, Guodian Power has invested in the construction of a number of thermal power plants in some northern cities. In addition to power supply, they provide centralized heating for the cities, which is beneficial to people’s livelihood and environmental improvement, and is in line with the national industrial policy guidance. The second is in large coal bases or The construction of a batch of coal-electricity integration projects in the power transmission base can not only guarantee the supply of coal and alleviate the regional imbalance of supply and demand in the coal market. At the same time, it will help the country's strategy of power transmission from west to east and from north to south."

Use the capital market to form power support

In 1997, when it was first listed, Guodian Power’s operating income was about 200 million yuan and its total assets were 380 million yuan. By the end of 2017, the company had annual revenue of nearly 60 billion yuan and total assets of 274.1 billion yuan. Over the past 20 years, the company's revenue and total assets have expanded hundreds of times.

"With the strong support of the controlling shareholder, the company gave full play to the capital market financing advantages, and the accumulated financing amount reached 50.81 billion yuan. The financing method used all financing tools that the capital market can provide. Through financing to accelerate the development of high-quality projects, and actively acquire high-quality assets , To achieve rapid growth in both scale and efficiency. The core competitiveness of the company continues to increase, and Guodian Power has become a model of capital operation of A-share companies, especially in energy companies." Feng Shuchen said.

Regarding the difficult and fruitful exploration in the capital market over the past 20 years, Feng Shuchen cherishes everything: “In 2008, the company successfully issued the first domestically traded convertible bond financing; in 2010, it completed the largest-scale power refinancing project in the A-share market at that time and made it public. Raised funds of 9.57 billion yuan. In the case of a lack of money in the market, we still did it. It was not easy. At that time, some of the fast-growing businesses of the company particularly needed financial support. With this financing, we installed the excellent assets of the group company Entered a listed company and invested in some new high-quality projects. Capital market financing played an important role in the critical period of the company’s development."

Feng Shuchen pointed out, “Since then, the company successfully introduced the National Social Security Fund as a strategic investor and became the company’s second largest shareholder. This was the first investment of the Social Security Fund in the power infrastructure industry at that time; In addition, the company has tried a number of asset securitization projects. In 2016, the company’s Ningxia New Energy Co., Ltd. carried out asset securitization operations and successfully issued the first domestic asset securitization product for wind power tariff income rights. The project won Comment on the '2016 China Asset Securitization of the Year Award'. The reorganization and merger of Guodian Group and Shenhua Group, which was completed in 2018, has brought a full range of historical opportunities to Guodian Power."

The outstanding performance of Guodian Power in the capital market has provided strong impetus and support for the company's development. The company's installed power capacity has grown from more than 100,000 kilowatts at the beginning of its listing to 54 million kilowatts at present, achieving exponential growth. At the same time, it has developed from a single thermal power company in the past to a large-scale comprehensive power listed company integrating thermal power, hydropower, wind power, photovoltaic power generation, coal mining, and chemical industry.

According to reports, the company has successively won the Shanghai Stock Exchange’s Outstanding Restructuring Case Award and the Capital Operation Award, and has won 11 Golden Bull Award listed company awards, and won the 20th Golden Bull Award Special Award-China Listed Company Golden Bull Foundation Evergreen Award. The company became the only domestic traditional energy company to be selected by Forbes as the world's most trusted company, ranking No. 225 on the list.

Looking forward to the future, Feng Shuchen said, “The reorganization of the group has brought many opportunities for Guodian Power. I believe that the company has a lot to do in the capital market and will make full use of the capital market to achieve faster and better development, and continuously improve the company’s core competitiveness and sustainable profitability. Accelerate the pace of building a world-class comprehensive electric power company with global competitiveness in an all-round way, create more generous returns for investors, and make greater contributions to the high-quality development of China's economy."

This article is transferred from China Coal News Network

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