Friday, November 27, 2020
 
Columnist
Martin Hennecke
 
HAITIAN HYDRO
HKEx Stock Code : 08261 
 
Corporate Profile
The Group is engaged in the operation and management of small hydropower plants in China which were either developed by itself or acquired from other parties.

Business Review - For the year ended December 31, 2012

The shares of the Company were successfully listed on GEM on 6 July 2012. The Company and its subsidiaries (hereinafter collectively referred to as the ‘‘Group'') are principally engaged in the operation and management of small hydropower plants in the People's Republic of China (the ‘‘PRC'') which were either developed by itself or acquired from other parties. As at 31 December 2012, the Group possessed three wholly-owned operating hydropower plants namely, Ma Tou Shan Hydropower Plant, Qianping Hydropower Plant and Jiulong Hydropower Plant which are located in Fujian Province, the eastern part of the PRC. The operational details of the hydropower plants are listed as below:

Ma Tou Shan Hydropower Plant (福安市馬頭山水電站)

Ma Tou Shan Hydropower Plant is located on Qianyang Stream of Saijiang Basin (賽江流域茜洋溪) in Xibing Town (溪柄鎮), Fuan City (福安市) of Fujian Province. With a total installed capacity of 11.25 MW, Ma Tou Shan Hydropower Plant commenced power generation for sale in June 2007. Ma Tou Shan Hydropower Plant is an impoundment dam reservoir hydropower plant which is built with a water diversion structure (dam) spanning the river and a water conveyance facility (tunnels and penstocks) which conveys water to the powerhouse. The powerhouse contains two 5.0 MW and one 1.25 MW vertical water turbine generators (直立式水輪發電機組). The reservoir has a design of a total capacity of approximately 9,980,000 m3, which possesses the function of ‘‘seasonal adjustment (季調節)'', i.e. the reservoir could store excess water in the high precipitation season for the use of electricity generation in low precipitation season during the same year.

The Group has also derived income from sales of carbon credits, known as CERs, from Ma Tou Shan Hydropower Plant that has been registered as a CDM project with the CDM Executive Board in February 2009 and has commenced to generate income from it since 2009. The income recorded from the sales of CERs for the year ended 31 December 2011 and 2012 were approximately RMB1.9 million and nil respectively. As a result of National Development and Reform Commission (‘‘NDRC'') of the PRC and related PRC authorities promulgated the CDM Measures (Revised) on 3 August 2011, any entity which becomes a foreign-owned enterprise upon the change in shareholding subsequent to the approval by NDRC will be disqualified automatically in CDM project. The Group would not recognise any income from sales of CERs subsequent to 31 December 2011 unless advice can be obtained from NDRC that the operating company will not be disqualified from CDM project.

Qianping Hydropower Plant (周寧縣前坪水電站)

Qianping Hydropower Plant is located on the Longting Stream (龍亭溪) of the Muyang Basin (穆陽溪 流域), Zhouning County (周寧縣) of Ningde City (寧德市) in Fujian Province. With a total installed capacity of 10 MW, Qianping Hydropower Plant commenced power generation for sale in June 2008.
Qianping Hydropower Plant is an impoundment dam reservoir hydropower plant which is built with a water diversion structure (dam) spanning the river and a water conveyance facility (tunnels and penstocks) which conveys water to the powerhouse. The powerhouse contains two 5.0 MW horizontal water turbine generators. The dam controls a catchment area of approximately 44 km2. The reservoir has a design of total capacity of approximately 3,340,000 m3, which possesses the function of ‘‘seasonal adjustment (季調節)'', i.e. the reservoir could store excess water in the high precipitation season for the use of electricity generation in low precipitation season during the same year.

Jiulong Hydropower Plant (周寧縣九龍水電站)

Jiulong Hydropower Plant is located at Qibu town (七步鎮), Zhouning County (周寧縣) of Ningde City (寧德市) in Fujian Province. It comprises cross stream hydrological works which divert the water from upstream of Bapu Stream (八蒲溪), a tributary of Muyang Stream (穆陽溪), into Qibu Stream (七步溪). Jiulong Hydropower Plant has a total installed capacity of 5.0 MW. It commenced power generation for sale in April 2003. Jiulong Hydropower Plant was acquired by the Group in May 2010.

Jiulong Hydropower Plant is an impoundment dam reservoir hydropower plant which is built with a water diversion structure (dam) spanning the river and a water conveyance facility (tunnels and penstocks) which conveys water to the powerhouse. The powerhouse contains two horizontal water turbine generators (.式水輪發電機組). The dam controls a catchment area of approximately 46 km2.

The reservoir has an adjusted capacity (水庫調節庫容) of approximately 59,000 m3, which possesses the function of ‘‘daily adjustment (日調節)'', i.e. the reservoir could store excess water in the high water hours for the use of electricity generation in low water hours during 24 hours.

Extension Development of Jiulong Hydropower Plant

To strengthen the future cash flow and further expand our operation, the Group plans to develop an additional hydropower plant in Bapu Stream (八蒲溪), Zhouning County, Fujian Province, the PRC. The Group was granted the development right by the relevant authority to develop additional hydropower plants in Bapu Stream for an operating period of 50 years. Such additional hydropower plant is regarded as an extension of the existing Jiulong Hydropower Plant as it will make use of the water resources of the same river, Bapu Stream, as Jiulong Hydropower Plant.

In September 2012, the preliminary preparation works for Jiulong Hydropower Plant extension project have been initiated and it is expected that the mainframe construction will start in third quarter of 2013. Depending on the construction progress, the directors of the Company believe the mainframe construction will be completed in fourth quarter of 2014 and the project will start to contribute revenue to the Group in 2015.

Acquisition of Hydropower Plants

As a core of expansion strategy, the group continues to seek to acquire small and medium-size hydropower plants with attractive return and appreciation potential. As at the date of this announcement, the Group has identified a few potential hydropower plants in Fujian Province and is currently conducting preliminary reviews and feasibility studies. It is expected that negotiation will be initiated for the target hydropower plants and an acquisition will be concluded in the first half year of 2013.

Business Outlook - For the year ended December 31, 2012

Looking ahead, the Group will continue to seek and acquire small and medium-size hydropower plants with promising outlooks and appreciation potential. Since the ‘‘Twelve Five'' plan has encouraged the development of hydropower, improved the tariff setting mechanism and facilitated the continuous and healthy development of small hydropower plants, the Board believes that small and medium-size hydropower plants have greater potential for future developments and investments, and will continue to present the Group with unprecedented development opportunities and benefits. As such, the Group will strive to optimize the operation and management of its existing projects and accelerate the acquisition of and facilitate the operation and management of newly-acquired projects, in an effort to improve the performance of its existing businesses.

Source: Haitian Hydropower (08261) Annual Results Announcement
Chairman Lin Yang Issued Capital (shares) 1,000M
Par Value HKD 0.01 Market Capitalisation (HKD) 610M
 
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