(1) Summary of Huaneng International’s 2001-2003 annual reports
Analysis of each item in the financial statements
Based on the latest report data of 2003 Analysis Basics.
1. Asset analysis
(1) First of all, the company's total assets reached more than 53 billion, which is very large, an increase of about 11% compared with 2002, and an increase of about 2% in 2002 compared with 2001. , which is related to Huaneng’s series of acquisitions in 2003. It can also be seen that the company has accelerated the pace of expansion.
The vast majority of the assets are fixed assets, which is related to the characteristics of the industry: it can be seen from the notes to the accounting statements that power generation facilities account for a very high proportion of fixed assets, accounting for approximately 92.67% of fixed assets.
(2) The balance of accounts receivable is large, but no provision for bad debts has been made, which does not comply with the principle of prudence.
The notes to the accounting statements state that the company's provision for bad debt provisions for other receivables is based on 3% of the balance of other receivables. The aging analysis shows that the portion accounting for 42% of other receivables is Accounts receivable that have not been recovered for more than two years. According to my country's tax laws, receivables of foreign-invested enterprises that have not been recovered for more than two years can be treated as bad debt losses. The recoverability of this part of receivables is questionable and should still be treated as such. Recording bad debts at a rate of 3% is not in line with the company's current asset status. Other receivables over 2 years ago total 87,893,852 yuan, and the provision for bad debts is too low.
(3) Intangible assets are negative. The notes to the statement show that it is mainly due to negative goodwill. Huaneng International has carried out large-scale acquisitions of power plants from its parent company, Huaneng Group, and transferred a large number of high-quality Huaneng International has gained a lot from these acquisitions. When Huaneng International was listed in New York in October 1994, it only owned five power plants: Dalian Power Plant, Shang'an Power Plant, Nantong Power Plant, Fuzhou Power Plant and Shantou Gas Turbine Power Plant. After nine years of development, Huaneng International has acquired power plants from Huaneng Group. , expanded its scale. However, due to the impact of related-party transactions during the acquisition, Huaneng International was able to acquire the assets of Huaneng Group at a price lower than fair value, thus generating negative goodwill. This was due to related-party transactions, so when conducting financial statement analysis The influence of this factor should be eliminated.
(4) Long-term investment. We noticed that the company's long-term equity investment increased significantly in 2003. This was mainly due to Huaneng's acquisition of Sheneng 25's equity in April 2003 and the increase in investment income from Shenzhen Energy Group and Rizhao Power Plant.
2. Analysis of liabilities and equity
Huaneng International's current liabilities have dropped significantly compared with the end of 2002, mainly due to the repayment of part of the due loans.
The main maturity dates of Huaneng International’s long-term borrowings are concentrated in 2004 and after 2011. In these two years, the company has greater repayment pressure and needs to raise a large amount of funds and maintain high liquidity. to meet maturing debts, which requires the company to make timely arrangements for fund raising. Among them, long-term loans that will mature within one year are 2799487209 yuan, and the company's existing monetary funds are 1957970492 yuan, so there is a certain amount of repayment pressure.
Huaneng International, a company listed in three places, issued 350 million A-shares domestically, of which 100 million legal person shares were allotted to major shareholders. This part of the stock was allotted to Huaneng Guodian at the market price. Although The "Letter of Intent" contains this sentence: "Huaneng International Power Development Company has made a written commitment to subscribe in full at the price determined for this public offering. This part of the shares will not be listed for circulation until the country promulgates new regulations on the circulation of state-owned shares and legal person shares. "But considering the special nature of this part of the stock, the possibility of circulation is still very high.
This financing model of Huaneng International was also used when it issued additional foreign shares in March 1998. In this model, on the one hand, Huaneng International buys power plants from major shareholders, and on the other hand, the major shareholders purchase power plants from major shareholders. When Huaneng International bought stocks, neither party actually paid much cost. Only through this method, Huaneng International completed the task of asset reorganization while ensuring that the control position of the major shareholders was not shaken.
3. Income and Expense Analysis
(1) Huaneng International’s main income comes from the deduction of value-added tax collected through various local or provincial power companies to produce and transmit electricity to end users. The subsequent electricity bill income. According to the records of actual grid electricity or electricity sold at the end of each month, bills are issued and revenue is recognized when power is transmitted to the grid controlled and owned by each power company. Therefore, the level of electricity prices directly affects Huaneng International's income. With the comprehensive rollout of my country's power system reform, electricity prices have gradually transitioned from the original planned price to "separating the factory from the grid and bidding for the Internet". The monopoly of the power industry will also be broken, so it will be difficult to obtain monopoly profits. The domestic power industry has now formed a new structure consisting of the State Electricity Regulatory Commission, the five major power generation groups and the two major power grids. The five major power generation groups have divided the power generation assets of the original State Power Company into five shares and hold them equally in each region. Now they are held in each region across the country. The market share occupied by the five major groups in each region is approximately 20%. As the flagship of Huaneng International, one of the five major power generation groups, Huaneng International has continuously acquired power plants owned by its parent company to increase power generation and seize market share, thereby forming a scale advantage.
(2) Since Huaneng International is a foreign-invested enterprise and enjoys the country’s preferential tax policies, the tax income it brings is approximately 400 million yuan.
(3) The revenue and costs in 2003 increased significantly compared with 2002. This was mainly due to the above-mentioned acquisition of several power plants and their inclusion in the scope of merger of Huaneng International. However, from a longitudinal analysis, although revenue increased by 26% compared with last year, main business costs increased by 25%, main business taxes and surcharges increased by 27.34%, and administrative expenses increased by 35%, all of which were higher than the growth of revenue. rate, indicating that Huaneng International's costs still have room for decline.
(3) Ratio analysis
Financial ratio analysis table
Indicators 2003-12-31 2002-12-31 2001-12-31
Liquidity ratio ?
Current ratio 1.01 0.88 1.07
Quick ratio 0.91 0.77 1
Long-term solvency ?
Assets Debt-to-equity ratio 0.33 0.38 0.42
Debt-to-equity ratio 0.26 0.31 0.35
Interest coverage ratio 12.5 9.09 5.26
Operating capabilities
Receivables Account turnover rate 9.96 9.91 12.6
Inventory turnover rate 19.41 13.32 13.97
Total asset turnover rate 0.46 0.39 0.34
Profitability
Return on assets () 12.71 8.56 9.35
Return on equity () 15.87 10.11 12.31
Gross sales profit margin 28.85 27.83 27.96
Net sales profit margin 23.24 21.8 22.99
Return on equity 18.56 14 15.71
1. Liquidity ratio
(1) Current ratio = current assets/current Liabilities
(2) Quick ratio = Quick assets/Current liabilities = (Current assets - Inventory)/.Current liabilities
The company's current ratio first fell and then rose from 2001 to 2003. However, there is a big gap between the absolute standard of 2:1 and the industry average of about 1.35, which deserves vigilance. Especially in 2004, there was a small peak in Huaneng's repayment. There were many loans due, so preparations must be made in advance. . The company's quick ratio and current ratio have similar development trends. And the value of 0.91 in 2003 is close to 1, which is similar to the industry standard, indicating that there is less inventory, which is also related to the characteristics of the power industry.
2. Asset management ratio.
(1) Inventory turnover rate = cost of goods sold / average inventory.
(2)A Accounts receivable turnover rate = net sales revenue/average accounts receivable.
B Accounts receivable turnover days (average collection period) = 360/accounts receivable turnover rate.
(3) Asset turnover rate = net sales revenue/average total assets
The company’s asset management ratio dropped slightly in 2002 compared with 2001, and was the highest in 2003. Among them, inventory The turnover rate in 2003 exceeded the industry average, indicating that the ability to manage inventory has been enhanced, the material flow has been accelerated, and the inventory is small. The accounts receivable turnover rate is much higher than the industry average, indicating that funds are recovered quickly and sales are running smoothly. The company's total assets grew rapidly in 2003, and its net sales revenue also grew rapidly. Therefore, the asset turnover rate showed a rapid upward trend and was at the leading level in the industry. This shows that the company's asset utilization efficiency is very high, and the expansion of scale has brought more benefits. High returns to scale and healthy development.
3. Debt ratio.
(1) Asset-liability ratio (debt ratio) = total liabilities/total assets.
(2) Multiple of interest earned = profit before profit and tax / interest = (technetium tax on net profit interest) / interest
(3) Long-term debt to equity ratio = long-term debt / Owners' Equity
The company's debt ratio has been decreasing year by year mainly because the company borrowed a large amount of loans and foreign debts to build power plants in the early days of its establishment. As the power plants were put into operation and made profits, the company's debt ratio was gradually reduced by repaying principal and interest. It is also related to the continuous capital increase and share expansion of enterprises. Moreover, companies with a good development trend in the interest earned ratio indicator have sufficient ability to repay interest and principal. Long-term solvency is in the leading position in the industry,
4. Profitability ratio.
(1) Net sales profit margin = net profit/net sales revenue
(2) Gross sales profit margin = gross profit/net sales revenue
( 3) Return on assets = profit before profit and tax / average total assets
(4) Earnings per share = return on equity = (net profit - preferred stock dividend) / average common stock equity
(5) Net interest rate on assets = (net profit - preferred stock dividend) / average assets
The company's profitability index values ??are basically higher than the industry average and are in a leading position, especially asset income rate has a considerable advantage. Various indicators showed a slight decrease in 2002 compared with 2001, which may be related to the substantial price increase of coal and other resources. There was substantial growth in 2003, which shows that the company's mergers and acquisitions and other measures in 2003 achieved good results and benefits.