On April 29, Luen Mei Quantum (600167) (hereinafter referred to as the Company) published its 2020 annual report. During the reporting period, the Company realized operating revenue of RMB3.598 billion, growing by RMB202 million over the previous year; it made a net profit attributable to the shareholders of the Company of RMB1.685 billion, up by RMB93 million over the previous year. Last year during normal prevention and control of the Covid-19 pandemic, it achieved steady growth in operating revenue and net profit attributing to the shareholders of the Company. It proposed a cash dividend of RMB4 per 10 shares (inclusive of tax). It proposed paying RMB915 million in total cash dividends (inclusive of tax), accounting for 54.30% of the net profit attributable to the shareholders of the Company and 61.95% of its net profit available for distribution.
The Company attaches great importance to the return on investment for its shareholders and is willing to share prosperity with them. Here is how the Company defined the percentage of total cash dividends for the years from 2020 to 2022: “If the Company has no major investment plan, large cash payouts, or other matters, in each of the three consecutive years to come, the proportion of profit used by the Company to pay cash dividends shall not be less than 50% of the profit attributable to the shareholders of the Company for the year.”
During the reporting period, the Company continued expanding in its main business of clean heating. While it has a plan for a total heating area of 152.32 million square meters, it achieved a heating area of 68.15 million square meters in 2020, up by 23.5 million square meters over the previous year. It realized an internetworked area of about 88.85 million square meters, growing by 41.9 million square meters year on year. The total heating area was expected to double.
In its efforts to foray into other fields, in the first half of 2020 the Company signed a project agreement with the government of Sujiatun District, Shenyang City. Under the agreement, the Company would invest in and build an integrated heat/electricity generation project in Sujiatun District, with the total investment estimated at RMB2.1 billion. The project would cover the area starting from 3rd Ring Road, Shenyang in the north and ending at Airport North Road in the south. It would be primarily responsible for supplying centralized heat for Sujiatun District, Hunnan New Town, Airport Area, National Games Village, Shenyang National University Science & Technology Town, and so forth.
While steadily increasing the heating area in North China, the Company took the first step to enter the “warm winter & cool summer” market in South China – NECC (Shanghai) Central Energy Station Joint Operation Project. As a “cooling/heating/electricity” integrated natural gas distributed energy system, the project was characterized by high energy efficiency, and its technical standards and market benchmark effect would help the Company to achieve great development in the clean energy market.
As shown in the annual report, the Company had cash and cash equivalents amounting to RMB6.048 billion by the end of 2020 – a compelling advantage in funds. Leveraging its experience in the industry and technological and fund advantages, the Company is active in making deployments in the fields of biomass energy, geothermal energy, and hydrogen energy and in such businesses as industry energy efficiency technology and the energy storage industry chain. Integrated with the existing urban centralized heating network, it seeks to build a smart energy utilization and management system for multi-network convergence.
On this basis, the Company will mainly be oriented toward large public building energy service in core cities, distributed clean heating in the mid-stream and downstream of the Yangtze River area, industrial parks, and so forth. Taking multi-energy complementary, digitally-driven, clean and low-carbon technical measures, it will actively develop a new integrated energy business and cultivate new areas for profit growth.
In the field of hydrogen energy, the Company will create an independent hydrogen business unit. It will focus on the technological paths for peak carbon dioxide emissions and carbon neutrality; using green hydrogen production as the point of entry, it will actively deploy a hydrogen industry chain such as the building and operations of hydrogen storage facilities and hydrogen filling stations, which will serve as the strategic direction for its business upgrade in the middle and long term.
As for geothermal energy, a relevant person from the Company said that the Company is exploring technological means critical to solving urban energy problems. In “ground source heat pump + smart operations” mode, it will provide “warm winter & cool summer” quality service for large public buildings and upscale residential buildings in cities. In “mid-/deep-layer non-interference geothermal heating technology + smart operations” mode, it will provide clean heating service for cities in North China.
According to our source, the Company’s fully-owned subsidiary Guohui Environmental Protection New Energy Co., Ltd. began to deploy a smart heating system in 2018. Through IoT technology, it upgraded all the heating stations in the covered area and set up a central database, laying a solid foundation in hardware and software.
The Company’s subsidiary Guohui Environmental Protection New Energy Co., Ltd. provides heating service for an area of more than 10 million square meters through a heating pipe network in a total length of 122.6 kilometers. Since 2018, Guohui began to build its smart heating system, 90% of which is now automatic. Besides, through IoT technology, it upgraded all the heating stations in the covered areas and set up a central database. Meanwhile, with a university it jointly developed a smart heating load prediction and decision-making and control system, which was officially put into service in November 2020.
The Company especially set up Luen Mei Smart Energy Technology Shenyang Co., Ltd. in order to build a sustainable innovation mechanism and consolidate all its patented technologies. Luen Mei Smart Energy is devoted to technological R&D and innovation for energy use and management. By using IoT, Big Data, and AI technologies, it carries out end-to-end management and control over the whole process of “source, network, station, and household”. It seeks to achieve digital smart upgrades from various links such as energy production, transmission, trading, consumption, and supervision and improve the operation and management efficiency of the system. With demand deciding energy supply and production, it hit its target of energy efficiency, quality improvement, and efficiency enhancement to the greatest extent. According to relevant persons from the Company, this year it will invest at least RMB10 million in transforming and upgrading the smart heating network in the Shenyang area in order to further reduce energy consumption and carbon emissions.
（source：China Securities Journal）
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