On 18 March, Binhai Investment announced its annual results as of 31 December 2020 with a year-on-year revenue rise of 3% to HK$3,654 million as compared to 2019. Despite a temporary slowdown in growth rates when facing the challenging headwinds in light of COVID-19 pandemic, the fundamentals of growth in the natural gas consumption remained unchanged. Due to the diminishing purchasing costs of piped natural gas, the Company saw a rise of about 15% in its gross profit as compared to 2019, reaching approximately HK$603 million. Meanwhile, overall gross profit margin leaped from roughly 15% in 2019 to around 17%. During the period, profit attributable to owners of the Company also shot up by an impressive 338% to approximately HK$355 million. Basic earnings per share were approximately HK$29 cents, with a final dividend of HK$0.079 per share as proposed.
With regard to the security of supply from gas sources, the Group succeeded in creating synergies in resources with its upstream suppler, namely Sinopec, by introducing Great Wall Gas, a wholly-owned subsidiary of Sinopec, as the second largest shareholder of the Company in the first half of 2020, which is expected to underpin the competitive position of the Group within the industry. Such move will also foster the continuous optimisation of gas connection and supply from the primary gas source or the dual gas sources supply in the Company’s subsidiaries in other cities. Going beyond its core function in safeguarding the sufficient peak shaving capacity over winters, this move is expected to lower the purchasing costs of gas, thus inflating the Company’s profit from gas.
As to enterprise operation, the Group had 184,000 regular customers from the construction and gas pipeline installation service segment in 2020, representing a year-on-year decline of 8%; sales volume of piped natural gas was 1,763 million cubic metres, representing a year-on-year decrease of 7.9%; among which, sales volume of pipeline gas had reached 1,020 million cubic metres, representing a year-on-year increase of 2%. During the year, 743 million cubic metres of natural gas pipeline delivery were achieved, representing a year-on-year decline of 18.8%.
Sales of piped natural gas: contributing 80.3% to the total revenue
For the year ended 31 December 2020, the consumption of piped natural gas by domestic and industrial users amounted to approximately 9,866x106 and 25,950x106 mega-joules respectively. During the period, the sales income of the Group from pipe natural gas recorded a growth of roughly 1% to about HK$2,936 million (2019: HK$2,893 million).
Construction and gas pipeline installation service: contributing 17.1% to the total revenue
The Group constructs gas pipelines for its clients and connects such pipelines to its main gas pipeline networks. The Group then charges construction and gas pipeline installation service fees from industrial and commercial customers, property developers and property management companies. As of 31 December 2020, the aggregate length of gas pipeline networks owned by the Group was approximately3,355 kilometres. During the year, the construction and gas pipeline installation service fees received by the Group amounted to approximatelyHK$626 million, representing a growth of approximately 12% (2019: HK$561 million).
Gas passing through service: contributing 1.9% of the total revenue
The Group transports gases for clients through gas pipeline networks and charges passing through fees. During the year, the volume of gases transported by the Group for its clients reached 743,247,108 cubic metres, whereas its gas passing through service income amounted to approximately HK$71 million (2019: HK$81.40 million).
Looking forward to 2021, when the global economy may continue to face high uncertainties under the new wave of worldwide COVID-19 infections and virus mutations, China may possibly brace for some impacts on its domestic economy; however, it has also achieved an accelerated progress in its natural gas market reform. Thanks to the market-driven city-gate prices, the liberation of LNG market prices, the progressive improvement of gas transmission and gas peak shaving mechanisms, together with the official establishment and operation of the national pipeline company, advancements and opportunities in construction, storage and transport are surely guaranteed. Apart from these, the year of 2021 is expected to bring in more opportunities for the expeditious and sustainable growth in upstream, midstream and downstream segments such as purchasing, storage, transport and sales of natural gas. While making continuous efforts to adhere to the guidelines of China’s14th Five-Year Plan on Energy（《十四五能源規劃》）and move towards the “2060 Carbon Neutral Target” （《2060 年碳中和目標》）, the Group will closely catch up with the direction and pace of transition within the energy industry. Leverage on the existing geographic advantages of its operations, the Group will continue to push forward the construction of natural gas pipeline networks and its business developments for optimising the layouts and structures of energy production, thus ensuring a higher efficiency of allocation for its oil and gas resources. The Group will also focus on sustaining the revenue growth of its existing core businesses, while being all set for the comprehensive roll-out of any value-added businesses.
In the future, with the strong backing of the two cornerstone shareholders, namely Tianjin TEDA Investment Holding Co., Ltd. and Great Wall Gas, the Group will further integrate its resources and edges to underpin its core businesses, and in the meantime, develop its integrated energy business in a proactive manner. Through unceasingly exploring every potential opportunity emerged on the market, the Group will improve its strategic layout of the regional development throughout the country for achieving a leapfrog development in the scale of its operations.