Business summary
Chuncheng Thermal Power of Jilin Province is a heating service provider in Jilin Province. As of 2018/12/31, the group's heating service area was about 38.5 million square meters, accounting for about 6.3% and 15.4% of the total heating service area in Jilin Province and Changchun City, respectively. The Group also provides integrated heating-related services, including engineering construction (such as heating facility construction, pipeline installation, boiler installation, heat exchange station installation, heating facility maintenance and construction management), engineering maintenance (such as cleaning, installation, maintenance and replacement of heating facilities), design services (such as construction projects for heating networks, design and provision of consulting and technical services for heat exchange stations and boiler houses), and electrical and instrument maintenance services. On March 31, 2019, the Group signed a new contract value of RMB 172 million for construction, maintenance and design projects, while the contract value for uncompleted projects was RMB 4.44.
Competitive advantage
The largest heating service provider in Jilin Province in 2018
The Chinese market occupies a leading position in the market
The heat comes entirely from local thermal power plants, which is cost effective
Risk Factors
If there is a shortage, interruption or temporary suspension of heating in a thermoelectric plant, it will be significantly affected
No long-term heat purchase agreement has been settled with the thermoelectric plant
Use of proceeds
About 41% are used to enhance intelligent heating network systems
Approximately 41% will be used to upgrade and replace existing grade 1 pipe networks and heating installations
Approximately 13% of the heating service area of the expansion group was used
Approximately 5% is used as general working capital