In terms of electricity supply and demand, the China Electricity Council predicted that the year-on-year growth in total national electricity consumption would slow down steadily to approximately 5.5% for 2019. At the same time, the national electricity supply and demand would reach equilibrium in general, and certain regions would suffer
from insufficient supply temporarily. In order to seize opportunities amid intensifying competitions, the Group
will continue to strengthen the development and operation of the renewable energy business, enhance the
marketing of direct electricity sales and seek to increase electricity and heat transmission.
In terms of reform progress, the market-oriented reform of the power industry in China will proceed and the reform of state-owned enterprises will keep advancing. With the aim of optimizing the management structure and
operating mechanism of state-owned enterprises, the State-owned Assets Supervision and Administration
Commission of the State Council promulgated and implemented the "Work Program of ‘Double Hundred Action’
in State-owned Enterprise Reform" (國企改革「雙百行動」工作方案) so as to increase the vitality and efficiency
of state-owned enterprises. As of now, the Group has established a special group to closely follow up on the issue.
The Group considers, management enhancement, revenue boost and expenditure reduction are the main focuses in improving operating results amid a relatively stable macroeconomic and power supply and demand
environment, while adaptation to reforms is the key to more efficient operation under the context of
comprehensively advancing reforms. With the target of becoming one of the leading clean energy enterprises
globally, it is also the Group’s long-term strategy to achieve high-quality growth by staying committed to the
development of clean energy and comprehensive intelligent energy. The priorities of the Group for 2019 include
Enhance operation management for higher efficiency on all counts. The Group will make greater efforts in the marketing of electricity sales, through which it will further increase direct trade of electricity in the more
market-oriented environment. Moreover, it will implement strict control over fuel cost and cost of capital,
and improve the labor productivity of staff simultaneously.
Control the debt leverage and prevent operational risks. The Group will control capital expenditures and strengthen the cash flow. It will ensure a sound capital structure by introducing strategic investors at the
subsidiary level as appropriate and keeping the debt ratio at a reasonable level.
Maintain the established strategy and insist on transformational development. The Group will continue the transformation towards a clean energy enterprise and secure the development of top-notch clean energy
projects, which will create advantages in scale and quality for clean energy operation. Besides, it will dispose
of some of its equity interests and assets of coal-fired power subsidiaries, lower the proportion of coal-fired
power installed capacity and optimize the installed capacity structure. It will expand the scope of
comprehensive intelligent energy services, steadily promote project development and optimize corporate
governance on an ongoing basis. Leveraging on the reform of state-owned assets and enterprises in China,
the Group will improve internal systems and mechanisms, and nurture a high-caliber workforce.