Interpretation of the Work Report of the Big Five Power Group in 2012

In the past month, Datang, Huadian, Huaneng, Guodian and China Power Investment have all announced the work report and work focus of the group this year. As the one-year leading development plan, in the context of the expected decline in electricity consumption of the entire society this year, the increase in emission reduction pressure in the thermal power industry and the existence of various uncertainties, it is helpful to analyze the work reports and work priorities of the five major groups in 2012. We have a macro and overall grasp of the development trend of the thermal power industry this year. In addition, the work reports of the five major groups also reflect the various groups’ predictions and responses to the macroeconomic and political situation of the country this year.

The macroeconomic over-quantification insufficiency is in contrast with the work report of the five major power generation groups in 2011. The 2012 report is more macroscopic, and the quantification of various work objectives is not as significant as in 2011. 2011 was the first year of the “Twelfth Five-Year Plan”. Each group has set development goals for the period. Among them, the Datang Group's 2011 work report has established seven specific goals during the “Twelfth Five-Year Plan” period, including: strengthening and expanding the main power generation industry, accelerating the development of the coal industry, steadily developing the coal chemical industry, accelerating the development of the financial industry, and advancing Science and technology environmental protection industry, vigorously develop the trade logistics industry, and accelerate the expansion of international business. Huadian, Huaneng and Guodian also quantified their targets in addition to the key work. Huaneng Group's performance targets in 2011 include: the completion of 600 billion kwh of power generation; completed coal production of 60 million tons; completed operating income of 260 billion yuan; completed profit of 8 billion; approved power project 12 million kilowatts; installed capacity of 980 Million kilowatts; additional coal mine capacity of 19.7 million tons / year and other specific provisions. Guodian Group's overall work requirements for 2011 include: 323.5 g/kWh for power coal consumption; less than 863,000 tons of dioxide* emissions; 86.9% for 300,000 kilowatts and top-fired generators; new hydropower, wind power, etc. The proportion of energy and renewable energy reached 21.5% and other specific indicators.

Relatively speaking, the safety production, operation management, and technological innovation covered by the 7 or 9 priorities listed in the work report of the Big Five Group in 2012 are related to energy conservation, emission reduction, innovation, party building, and corporate culture construction. Consistent with the general direction of the previous year, but did not specifically quantify the goals.

There are no major changes in the priorities of the five major groups in 2012. They still focus on the seven major aspects of operations, management, safety, energy conservation, structural adjustment, technological innovation, and party building. At the same time, there are five major commonalities in these seven areas:

Emphasizes work safety and party building work. These two items have always been the key tasks of each group, and this year is the year when the commemoration of the commemoration of the *****. To meet its smooth convening, this year's work safety and party building work is even more important.

Emphasis on capital operation and management. In 2012, each group took capital operation as one of the key tasks. On the one hand, it strengthened the control of debt ratio and the prevention and control of risks. On the other hand, it improved the capabilities of the group. In addition, the high importance attached to management is another common feature of this year's work report of the Big Five Group. Datang Group has established this year as the “Year of Management Improvement”; Huadian Group has proposed “the Year of Enhanced Management Efficiency”; Guodian Group regards “strong management” as The overall requirements of the Group's work this year; CPI investment management as one of its overall goals of "three grasps, three guarantees" (grasping management, grasping reforms, grasping development, ensuring growth, keeping safety, and ensuring stability) this year.

Emphasize economic benefits. The main industry thermal power of the five major groups has been losing money in recent years. Datang Group pointed out in the report: “In 2011, the thermal power company of the Group suffered a loss. In December after the second tariff adjustment, 43 thermal power companies were still in a loss month, and 60 companies were in a loss-making state for the whole year. 29 asset-liability ratios exceed 100%.” The economic benefits are undoubtedly the lifeline of the company. In 2012, the five major groups emphasized the enhancement of economic efficiency. Among them, Datang and CPI have clearly positioned themselves to focus on economic efficiency. Datang stated in its work report that “emphasizing economic efficiency as the center has a special significance in the present. The purpose is to further strengthen the awareness of efficiency of leading groups and employees at all levels and fully understand the relationship between economic benefits and the rise and fall of enterprises. The company's lifeline is more consciously focused on improving economic efficiency and carrying out various tasks."

Emphasize the transformation of development and innovation. The transformation approach and reform and innovation focus on the industrial structure, institutional mechanisms, and scientific and technological capabilities. They are three more macroscopic and broader aspects. However, as the five major power companies that continue to develop into comprehensive groups, these three aspects determine the long-term The development and benefits. Therefore, in this year's work report, these three aspects will continue to be included in the Group's priorities and emphasized without exception.

Emphasize steady development and cost control. Another common aspect of this year's five major group work reports is the steady development and cost control. Datang Group proposed to "strictly control all costs and expenses", and at the same time called for "adjusting profitability and effectively controlling the scale of investment"; Huadian Group proposed to "control the scale of investment and optimize the investment structure. It does not meet the transition requirements and does not have a competitive advantage. Projects that do not produce effective returns must be carefully sorted out. The retreats must be resolutely postponed, and the suspension of construction must be resolutely halted.” And “Increase revenues and reduce expenditures to deepen overall budget management.” Guodian Group made clear its goal of maintaining goals, stabilizing development, and controlling scale as one of the general requirements for the Group's work this year.

The strategic extension is still a bright spot. In addition, from the work report of this year's Big Five Group, we can also see three trends of future development. These three trends can be summed up in terms of “gender and gender”, namely: comprehensiveness and internationality. Among them, comprehensive emphasis is placed on the improvement of the power generation industry and non-power generation industries.

The new energy and clean energy development will be integrated into the group's comprehensive development plan. As China attaches importance to and promotes new energy and clean energy power generation, in recent years, the five major groups have all expanded to other energy power generation fields other than thermal power generation. It is involved in hydropower, wind power and nuclear power, with the largest share of hydropower. As the most rapid development of clean energy, China Electric Power Investment Co., Ltd.’s general manager Lu Qizhou said that in 2012, China Power Investment plans to exceed 20 million kilowatts of installed hydropower capacity.

As a transformation priority, the development of new energy and clean energy has become a hot topic in the development of the top five groups in recent years. This year, each group did not emphasize the separate development of new energy and clean energy, but integrated it into the overall development plan as another pillar to enhance the overall strength of the Group's power generation industry.

Strengthen the development of non-power generation. The non-power generation sector will become one of the key components of the future planning of the five major power generation groups and will be the only choice for the development of comprehensive group companies. Among them, in addition to the coal mining and transportation extending to the upper reaches of the industrial chain, the financial and capital sectors have received widespread attention from the five major groups. The most prominent is the Datang Group’s work report, which states that it is necessary to “further increase the operation of listed companies in the capital market.” At the same time, it states that it is necessary to use capital holding companies as a platform to expand the scope of financial services and lose no time in entering trusts and securities. In other fields, we will expand the financial industry."

Create an international group. The international roads of the five major groups can be summarized as "repairing internal forces" and "going out". The former intends to build itself into a world-class enterprise; the latter intends to expand its business overseas and conduct transnational operations. Huaneng Group proposed to build a “world-class enterprise” and actively implemented the “going out” strategy, stating that this year it must “strively do a good job in overseas investment, general contracting of projects, technical services and international trade to ensure that the Batam project is put into operation on schedule and steadily and orderly advance south The Soviet project will coordinate the construction of Erler, Jenningsskaya, Bali and other projects.” Guodian Group put forward the goal of “building a number of domestic first-class, internationally-renowned related industrial clusters”.

From the above interpretation of the 2012 annual report of the five major power generation groups, we can see that we are still cautious about the main groups of thermal power plants, and we will actively expand other businesses on the one hand; on the other hand, we will establish safety, energy conservation, and stability as thermal power industry. The keynote of this year's development is to actively strive for policy-supported “multi-line” development. Due to the huge share of the thermal power industry of the five major power generation groups in the entire field of thermal power, it can be expected that this year's thermal power in China as a whole will also be based on stability.