Earnings Call: Q1 2007

Apr 25, 2007

Earnings release

Good evening, ladies and gentlemen. [Foreign language] Thank you for joining Huaneng Power International telephone conference today on the company's results for the first quarter of 2007. My name is Raymond Hill from RICE Communications, your moderator for this conference. [Foreign language] Before the conference starts, let me first introduce the company senior management members who are with us this evening. [Foreign language] Vice Chairman Mr. Huang Long. [Foreign language] 大家好。 Vice President and Company Secretary Mr. Huang Jian. [Foreign language] 大家好。 Chief Accountant Ms. Zhou Hui。总会计师周辉女士。周总，你好。大家好。 Securities Representative and General Manager of the Capital Market Department Ms. Jia Wenxin. [Foreign language] 你好，大家好。 And also we will have our company interpreter Mr. Jing Jun. [Foreign language] 好。 Well, we will first have Vice Chairman Mr. Huang Long brief you on the results, and then it will be the Q&A session for all of you to ask questions to management team. [Foreign language] I will now call upon Mr. Huang. [Foreign language] 女士们，先生们，大家好。欢迎大家参加华能国际电话会议。我先简要地向各位介绍一下公司刚刚公布的2007年一季度的经营业绩。按照中国会计准则计算，2007年第一季度公司实现合并主营业务收入111.83亿元人民币，同比增长10.32%；可供股东分配的净利润12.05亿元人民币，同比增长了5.73%；公司各运行电厂累计完成发电量388.67亿千瓦时，同比增长7.61%。 Good evening, ladies and gentlemen. Welcome to the conference call hosted by Huaneng Power International. I will start with an introduction of the just-released results of the company from the first quarter of 2007. Under Chinese accounting standards, the company realized a consolidated operating revenue of CNY 11.183 billion in the first quarter of 2007, representing an increase of 10.32% year-over-year. Net profit attributable to equity holders was CNY 1.205 billion, an increase of 5.73% over the same period last year. On a constant basis, the company's operating power plants accomplished a power generation of 38.867 billion kWh, representing an increase of 7.61% over the same period of last year. 2007年一季度公司电量收入、可供股东分配的净利润均比2006年一季度有不同程度的增长。电量方面，由于社会用电需求的持续增长，公司新投产机组获得了市场空间。按照可比口径，剔除四川水电，公司售电量同比增长7.47%，但是公司电量增长幅度低于全国平均增长幅度。公司售电单位燃料成本较上年同期增长9.22%，公司在电量和燃料价格控制方面面临较大的经营压力。 In the first quarter of 2007, the company recorded various degrees of increase in output, revenue and net profit attributable to equity holders. On output, due to the continued increase in demand for electricity, the company's newly commissioned units gained market share. On a comparable basis, that is by stripping out Sichuan hydropower, the company's outputs increased by 7.47% compared with the same period last year, but the growth in outputs was lower than that of the nationwide average. The unit fuel cost in the first quarter increased by 9.22% compared with the same period last year. The company faces significant operating pressure with respect to power outputs and the fuel cost control. 展望全年，公司仍有信心把握机遇，克服困难，确保在生产经营等各方面完成全年目标，为全体股东带来持续稳定增长的回报。接下来，我和我的同事愿意回答各位的问题。谢谢大家。 Looking ahead, the company is still confident in its ability to meet production and operational targets by seizing opportunities and overcoming difficulties, and bring sustainable, steady and increasing returns to the shareholders of the company. Now, my colleagues and myself are ready to take your questions. Thank you. Thank you, Mr. Huang. [Foreign language] Now it's time for questions. If you'd like to ask a question, please push 1 on your telephone pad, and you may also push star and 0 for operator assistance at any time. [Foreign language] We already have first question from Mr. Pierre Lau, Citigroup. [Foreign language] Pierre, please go ahead. Hello, Pierre. 喂。 [Foreign language] Please go ahead. OK。管理层你们好，我是刘显达，花旗银行的。我有两个问题。第一个问题，我想请教在今年第一季度我们购买的合同的兑现率是百分之几？第二个问题是我们今年第一季度有多少煤炭从合同来，谢谢。 I have two questions. The first question is the management talk about the contract fulfillment rates in the first quarter of 2007. The second question is that how much coal supply in the first quarter came from annual contracts? 请周辉总会计师回答一下这两个问题。一季度我们一共采购煤炭1826.5万吨，其中合同供货1071万吨，占58.6%，市场是755.5万吨，占41.4%，合同的兑现率为80%。 In the first quarter of 2007, the company procured a total of 18.265 million tons of coal, of which 10.71 million tons of coal was procured through annual contracts, and annual contracts purchased accounted for 58.6% of the total coal supply, and the contract fulfillment rates in the first quarter was 80%. OK. Pierre, you have any further follow-up questions? No。谢谢。 Thank you, thank you for joining us。下个提问是信诚基金管理的崔洪建先生。崔先生请。你好，我是信诚基金的崔洪建，我有两个问题想提问一下。我想问一下，因为我们电量的增长实际上包括了06、07年第一季度，是不是一部分新投产机组，如果说相同可比机组发电量大概增长了多少？ My question is that in the first quarter, outputs also included the contribution from newly commissioned units. I would like to ask if we strip out contributions from the newly commissioned units. On same time basis, how much did outputs grow in the first quarter? 这个问题请黄建先生回答一下。我们今天现在所说的利用小时都是按照加权平均的利用小时计算的。那么股份公司如果不含上海南京东电厂，一季度的平均利用小时是1315个小时，比去年同期降低了156个小时。 The utilization hours we provided are weighted average numbers. If we strip out Shanghai CCGT plant, then the average utilization hours in the first quarter was 1,315 hours, which was 156 hours lower than the same period of last year. 崔先生。我还有第二个问题。好。我想问一下，今年华能国际07年预计后面到07年年底，还有多少装机容量可以投产？ My second question is the capacity addition in the rest of year. 预计在今年底还有3800兆瓦的新机容量要投产。 We expect that before the end of 2007, we are going to have 3,800 megawatts of new capacity coming on stream. 大概是个什么样的构成情况呢？就是每个机组构成情况。都是燃煤机组，大部分都应该是60万千瓦级的。好，谢谢。还有100万千瓦级的。 All these projects are coal fired and with capacity ranging from 600 megawatts to 1,000 megawatts. 谢谢，谢谢崔先生。The next question comes from Mr. Yang Ming from 申银万国。申银万国的杨明先生，有请。杨先生你在吗？杨先生？Regina，Regina Parker。Regina。我想问问杨先生有没有问题？我们可不可以继续下一位？ Regina, if not, we go ahead for the second question from JP Morgan M&A. Is it OK? 喂？喂？你是？喂？你是杨先生吗？不是，我是—— 你的提问的时间了。喂，我是摩根大通。哦，摩根大通的M&A。对，对不起。李先生请呢。我有三个问题，第一是关于第一季度的标煤单价是多少，跟去年同期比较，增长了多少。第二是关于煤电联动，想听一下黄组长的最新看法，会不会可能六七月会启动。最后就是在上海的燃气的电厂，想了解一下第一季度补贴的金额是多少。I have three questions. The first is the management gave the standard coal price in the first quarter. How does that compare with that of the first quarter of last year? The second is that the management provides updates on the fuel cost pass-through. Would that happen in June or July of this year? Third question is regarding Shanghai CCGT plant. Could you provide the number for the subsidies in the first quarter of this year? 请周辉女士回答第一个和第三个问题，请黄建先生回答第二个问题。 2007年一季度的标煤单价是CNY506.64。单位来电成本CNY168.76，同比单位来电成本上升了9.22%。 The standard coal price in the first quarter was CNY 506.64 per ton. Unit fuel cost was CNY 168.76 per kilowatt hour, an increase of 9.32% compared with the same period of last year. 上海来电一季度盈利CNY2,700。补贴收入。补贴收入CNY 1.31亿。 CNY 1.31亿。 The subsidy to Shanghai PD in the first quarter was CNY 131.1 million. 关于煤电联动，今年煤炭大会结束以后，中电联已经给国务院打了报告，要求启动煤电联动。那么目前的情况是，国家发改委正在统计一季度全国煤炭涨价的情况，那么是不是能够启动煤电联动，现在还没有新的消息。 On the question of fuel cost pass-through. After the conclusion of the coal purchase conference early this year, China Electricity Council submitted a proposal to the State Council for tariff adjustments under the fuel cost pass-through policy. Right now, NDRC is collecting data with respect to coal price increases in various regions, and there's no new message as to when or if they come to initiate fuel cost pass-through. 李先生。 [Foreign language] Another question is that management previously provided a projection for unit fuel cost as around 5% for the whole year of 2007. Will that target still hold? 目前这个目标还没有变。 At present, we still hold on to this target. 谢谢。谢谢。 Mr. Lee, [Foreign language]. The next question comes from Morgan Stanley, Miss Helen Wang. [Foreign language]. 黄经理你们好，我有三个问题，第一个就是我想问一下，你们的营业成本，因为中国只提供了一个总的数字，可不可以提供一下燃料、维修、人工，还有付给母公司的服务费分别是多少？一个分解的数字。第二个问题就是我想问一下，我有听说国家发改委应该会在07年一季度批准09年开工的机组的情况，从公司这方面了解，公司方面有没有有关09年开工的项目得到批准？这是第二个问题。第三个问题就是，公司的发电量的增幅是低于全国的平均的水平，这样就意味着华能的市场份额在下降。那就是说公司对这个情况会不会采取一定的措施进行改善？然后还有一个就是那个燃机，一季度说是有盈利。对不起，可不可以重复一下这个数字，盈利多少？谢谢。 Four questions. The first question is the management provides a breakdown of operating expense in the first quarter of maintenance, labor, and service fee paid to HIPDC. Second question is that it is reported that in the first quarter of 2007, the NDRC is going to approve projects that are scheduled for groundbreaking in 2009. Any information regarding the approval of those projects? The third question is that in the first quarter, the company's output growth was lower than that of nationwide average. The company market share declined. What measures will the company take to consolidate its market share going forward? The fourth question is, could you repeat the profits number for Shanghai CCGT plant? 第一个问题和第四个问题，请周女士回答一下。我先说蓝计的盈利是CNY 2,700万。 The profit of Shanghai CCGT in first quarter was CNY 27 million. 关于成本的分项，燃料CNY 61.85亿，成本工资CNY 4.69亿，折旧CNY 17.15亿，维修CNY 2.76亿。HIPDC的输电服务费CNY 3,500万，其他费用CNY 2.9亿，财务费用CNY 1.24亿。 The operating expenses in the first quarter were as follows: fuel expense CNY 6.185 billion, maintenance CNY 276 million, labor CNY 469 million, depreciation CNY 1.715 billion, service fees paid to HIPDC CNY 35 million, financial expense CNY 424 million, other expenses CNY 2.9 billion. 关于发改委核准项目的问题，目前发改委只核准07年开工的项目。 On question of NDRC approval for projects. Right now, NDRC has only approved projects for groundbreaking in 2007. 第三个问题请黄建先生回答一下。公司发电的增长量低于全国增长量，当然是意味着市场份额在减小。但是一季度的数据并不能说明这是一个趋势，也不能代表全年。我们公司一季度发电量增幅不理想，有些具体的原因。一呢，主要是新机组在去年底投产的比较多，还需要在今年的一季度做一些实验，影响部分电量。另外，珞璜和玉环电厂的送出由于我们提前投产，所以在送出方面没有相应的提前，所以送出方面受到一定的影响。另外，在福建、河北地区，我们的装机都比较大，气候今年不太利于火电发电。还有就是一季度的检修比去年有比较大幅度的增加。那么这些因素，希望在未来的时间里逐步地克服。 The growth rate in output in the first quarter by the company was lower than the nationwide average. Of course, that caused the decline in market share of our power plants. However, there are specific reasons for such decline, and these reasons include: firstly, most of the newly commissioned units commenced operation in the second half of last year. Therefore, in the first quarter, we need to do some tests on some of those units. Secondly, Yuhuan and Luohuang, which commenced operation last year ahead of schedule. Therefore, the transmission infrastructure was a bit lagging behind. That has caused some constraints for Luohuang and Yuhuan to reach full output. Thirdly, the weather conditions in Hebei province and Fujian province were not particularly favorable for our coal-fired units, and the company has relatively large exposure in those two provinces. Fourthly, maintenance in the first quarter of this year was considerably bigger than that of same quarter last year. That also caused the decline in outputs. All these factors, we believe, will gradually be mitigated in the rest of the year. 我这里也补充一句，公司是有信心并且有具体的方案，把在一季度失去的部分份额，在剩下的三个季度中间把它给补回来。 What I would like add here is that the company is confident and are taking steps to take back those lost market share in the rest of the year. 好，谢谢。好，谢谢你啊。谢谢你的参加。谢谢。 The next question comes from 华夏基金 Miss Lin. 华夏基金的林京小姐. 你好，管理层，我这边想问一个问题，就是有关于电量调度新规则的问题。因为新的规则是以节能还有环保的这个原则来优先调度一些能耗比较低的机组。我想问问这个新的政策对于公司所在电厂的各个区域，对我们公司电厂的发电量的影响是什么样的？ I'd like to ask a question about the new dispatch rules, which I expect to feature energy saving and environmental protection. Priorities will be given to those who are more environmentally friendly and more efficient units. How will that impact the company? 请黄建先生回答。那么新的调度规则，现在目前还没有出台，政府的有关部门正在研究，我们也正在跟踪这件事情。那么如果实行节能调度呢，我想我们公司的机组，煤耗方面和环保方面，应该说在国内都是处于一个比较领先的水平的，总体来说对公司是有利的。 The new dispatch rules have not come up yet. At present, we know that it is still under study by closely holding development. If the new dispatch rule is implemented, it will be positive for the company, given that in terms of coal rates and environmental protection, we are one of the lead performers in the industry. 但是我想指出的就是，我们公司应该是以往年度的利用小时都是比全国高不少的。即便是今年这一季度的情况，我们的利用小时还是比全国的平均水平要高一些。所以事实上节能调度的有些对利用小时的一个倾斜，我们公司事实上在以往年度应该是已经享受到这方面的这个好处了。所以真正实行节能调度，是不是能够进一步提升我们的利用小时，还是不太确定。 But I would like to point out the fact that in previous years, the average utilization of our power plants were always higher than the nationwide average. Even in the first quarter of this year, the decline of utilization of our units, we are still higher than the nationwide average. That means some of the priorities or benefits from the new dispatch rules have already been enjoyed by the company in the past. If the new dispatch rule is implemented, it is uncertain whether that will significantly improve the company's utilization rates going forward. 谢谢黄建总。金小姐, thank you. The next question comes from SinoPac Securities, Wendy Huang. 黄小姐, 永丰竞争救援的黄小姐. 各位管理层，大家好，我是黄勇。我有一个问题想请问，我在公司一季度的报告里面有看到，公司今年一季燃料成本是上涨9.2%，然后管理层有说公司在燃料价格控制方面会面临比较大的压力。那刚才在会议里面，管理层就说对全年燃料成本会维持5%的增长，目标是不变的。那我想问一下，管理层会采取什么样的燃料成本的控制措施来达到这个目标？还是管理层预期未来煤炭价格会疲软？谢谢。 In the company's first quarter reports, we read that unit fuel costs increased by 9.2%. The company faced pressure with respect to fuel cost control. Just now, the management stated that the project target of 5% still hold. What I would like to ask is that what measures will the company adopt to control the increase in fuel costs in the rest of the year? Or that the company anticipates softening of coal price down the road. 我们在这个年度业绩披露的时候，我们当时说，我们希望能把今年的燃料成本的涨幅控制在5%左右。当然我们也知道，不同的电力公司有不同的预期。 At the time when we released our annual results, we said that the company expected to keep the unit fuel cost increase at around 5%. We understand that different IPPs have given different projections for the year. 当然，今年合同的煤价已经签订，应该来说上涨的幅度还是比较高的。 As we have already signed the majority of our annual contract for the year, there was a considerable increase in price. 我们的分析主要是我们寄托于在现货市场上。我们的分析，我们也希望在现货市场上的煤价可以在未来的时间里头往下走。 Our assumptions is based on the spot market price. We think and hope that going forward, the spot market price will continue to decline. 因为我们想到过去几年里，在煤炭方面的投资是非常巨大的。在煤炭方面的投资的煤矿，应该来说实际上从去年开始到今年都是应该开始生产煤炭，所以煤炭的供应量应该是增加的。 In the past few years, huge amount of investment went into coal mining and believe some of the coal mines will start production, thereby increase supply to the market. 第二，由于投产机组的大量增加，利用小时会下降。这样子对煤炭的需求，应该来说由于利用小时的下降，应该也是有缓解的可能。 Secondly, as installed capacity continues to grow, utilization is declining, and that will cause demand for coal to ease. That will also help in a certain way to contain the fuel cost increase. 第三，我们也在努力地寻求在海外购煤的机会。去年的话，我们从国外购买了200万吨非常好的煤炭。我们今年仍然要加大这方面的工作力度。 Certainly, we are actively looking for coal sources from abroad. Last year, we imported 2 million tons of coal from abroad, and we will redouble our efforts in this regard. 第四点，我们也得给自己制定一个比较高要求的目标，这样的话使公司上上下下都努力朝这个目标去做最大的努力，争取最好的结果。 Fourthly, we want to set high targets on us so that the company from management down to the staff will make concerted efforts to realize our goal and to seek the best possible outcome. 方小姐，问题。谢谢。我还有紧接的一个问题。刚才管理层有说合同煤是上涨得比较多的，那可不可以问一下，大概跟去年比的话，大概上涨了百分之多少？然后如果展望全年来讲的话，管理层大概计划合同煤跟现货煤的比例大概会维持在多少？ I have a follow-up question. Just now you mentioned that contract price have risen by a considerable margin. Do tell us what is the percentage increase in the first quarter regarding contract coal and for the full year, what will be the split between contract versus spot? 请周经理回答一下。从Q1的合同煤来看，价格是上升了10.83%。 In the first quarter of this year, average contract price increased by 10.83% compared with the first quarter of last year. 那么从全年的订货情况来看，已经签订的合同是在了全年煤炭需求量的81%。我们全年需求量是7,600万吨。那么这个价格是比去年上涨了8%，这个指的是出厂价或者平常价，不含运费。 The expected coal requirement for this year is 76 million tons. We have secured annual contracts for 81% of that amount, and the average contract price increased by 8% compared with that of last year. This average price refers to the ex-plant price or FOB price including transportation. 那么我们05年的合同兑现率是82%。如果我们按同样的合同兑现率来计算的话，那么合同的供货量达到65%，市场就是35%。 In 2006, the contract fulfillment rate was 82%. If we apply similar fulfillment rate for this year, it means that for the full year, 65% of the coal requirements will actually be met by annual contracts, with the remaining 35% of coal requirements to be met by spot market purchase. 谢谢。谢谢，可以了。谢谢你，谢谢你参加。Now we come back to the gentleman from 申银万国。刚才杨先生，申银万国的现在还在。杨先生，请你，你的提问时间。不好意思，刚才我走开了一下。各位老总晚上好，我有几个比较小的问题，特别想请教一下周总。在一季度的时候，咱们整个按照新的会计政策调整以后，对咱们特别是利润表的影响有多大？第二个问题是，从汇兑损益的角度来看，对我们一季度的业绩影响有多大？目前的负债结构里面，外债的结构是怎么样的？还有一个小问题是第三个问题，四川水电今年一季度的状况跟去年相比是怎么样的？谢谢。 I have a few minor questions. First question is that, how did the new accounting standards affect the company's profit loss in first quarter? The second question is the exchange gain or loss and the debt structure of company is mostly dominated. The third question is company how about Hydro in the first quarter of this last year? 好，这个新会计准则对增加盈利。 The new accounting standard in the first quarter resulted in an increase in that of CNY 180 million. 在这个方面，现在是根据新的会计制度，我们禁止了对某公司素材采购当所产生的投资金额、相当于利益三一点标，这个增加盈利不进行。 The new accounting four areas. The first of generated by the company's previous acquisition and by CNY 31 million. 那么今年一季度汇兑收益是CNY 3,800万。 Realized gain of CNY 38 million this quarter. 然后从负债的结构来看，我们负债总额是456亿，一季度末456亿，外债折合人民币是不到50亿，49.73亿。 At the end of the first quarter, the company's total debt was CNY 45.6 billion, of which CNY 473 million debts are denominated in foreign currencies. 四川水电的收益，去年因为我们是公司拥有60%的股权，一季度的盈利是5,700万。去年。对，去年。 In the first quarter of 2007, when we had 60% interest in hydropower, the share of profits in the first quarter was CNY 57 million. 07年1月份，我们现在是拥有49%的股权，所以这个盈利是CNY 2,200万。 In the first quarter of 2007, as our interest in Sichuan hydropower increased to 49%, our share of profits was CNY 22 million. 刚才讲到对盈利增加的影响，里头我后面好像没说，刚才讲了第一部分，第二部分是由于新的会计准则，对于金融资产要按公允价值来计量。所以我们对公司持有的长江电力的认股权证，以期权定价模型，公允价值来计量，增加了盈利是CNY 1亿1,300万。 CNY 1亿1,300万。对。 The second area of impact from a new accounting standard was the mark-to-market gain of CNY 113 million from our investments in China Yangtze Power, due to the introduction of fair value concepts in the new accounting standard. The third area is that new accounting standard for the capitalization of interest for general borrowings. As a result, the net profit increased by CNY 33 million. The fourth area is due to the different kinds of treatment for deferred taxation. As a result, an increase in net profit resulted in an increase on the net by CNY 3 million. I have three questions. First question is that could the company management talk about the current situation in northeastern China? Could you provide the settlement tariff of each of the power plants the company has in the north of China? Second question is that, just now you mentioned for the rest of the year, it expects 3,800 megawatts on new capacity to come on stream. That a bit exceeded our company's earlier forecast. Could you elaborate a little bit on those projects under construction and scheduled for completion this year? The third question is that could you repeat the first two parts of the impact from the adoption of new accounting standards? To answer your first question, there is no new development with respect to the northeastern China power market. There is no sign that they are going to restart the power pooling. The settlements of the power plants here are still based on the methods put forward jointly by NDRC and SERC last year. For the company, overall tariff increased by 5.46% compared with the same period of last year. It was mainly due to the carryover effects of the tariff hike last year. As to the new capacity coming on stream in the rest of the year, they include Yingkou 2 by 600 megawatts, Qinbei 1 by 600 megawatts, and we will make our best effort to ensure that Yuhuan Phase II by 1,000 megawatts will come online before the end of the year. Therefore, we are looking at 3,800 megawatts for the rest of 2007. 对，第一个就是按照新的准则，我们停止了从母公司收购资产当中所产生的股权投资差额、商誉以及负商誉的摊销，增加盈利CNY 3,100万。第二点是按照这个新准则，对于金融资产按公允价值计量的有关规定，我们对公司持有的长江电力的认股权证，以期权定价的模型公允价值来计量，增加盈利CNY 1,300万。 Due to the introduction of new accounting standard, company cease the amortization of both positive goodwill and negative goodwill from the past M&A activities. That has resulted in increase in net profits of CNY 31 million in the first quarter. Second, due to the new accounting standards requires that financial assets to be recognized at their fair value. We realized a mark to market gain of CNY 113 million from our stock warrants in Changjiang Power. 吴先生可以吗？可以的，谢谢。谢谢你，吴先生。谢谢。 [Foreign language] The next question comes from Deutsche Bank, Mr. Michael Tang. Michael. 黄总你好，我的问题是这样的，刚才说到玉环两台1000MW的，这是我理解是玉环二期。但是现在这个项目发改委还没有核准，你们有信心在年底就能让它投产吗？这是第一个问题。第二个问题，我能问一下一季度母公司华能集团的总的利润情况是多少，可以吗？好，谢谢。这个你问的问题是很有意思的一个问题。我们实际上的话，我们认为很快就会核准，所有的文件都已经具备。我们想的话，还是能够尽努力投产的。第二个，还没翻呢。 Another question. 第二个什么问题？第二个问题是华能集团的利润情况，一季度的。华能集团的。华能集团。一季度，不错吧，这个。开会还没出来。华能集团的一季度的利润还没出来。好的。李先生，你要翻译吗？李先生。 I have two questions. The first question is regarding the Yuhuan units 3 and 4. We are confident that we will complete the construction of these two units before the end of the year, according to the rules and in accordance with relevant rules and regulations. The second question regarding the net profit generated by China Huaneng Group in the first quarter. Huaneng Group hasn't released its results in the first quarter of 2007. OK. The next question is a follow-up question from Morgan Stanley, Miss Helen Huang. [Foreign language] 就是管理层刚刚你们有提到那个利用小时是今年一季度是下降156个小时，我刚刚算了一下，大概就是下降11%，那这个幅度是比全国平均的幅度是要稍微高一点。能够说一下，就是说是哪些省份的利用小时下降比较厉害吗？谢谢。 Earlier, the management mentioned that in the first quarter of this year, utilization hours dropped by 156 hours, which was approximately 11% and it was a bit higher than the nationwide average. Could you provide some color as to which provinces saw the biggest drop in utilization hours? 请黄先生回答一下。那么一季度全国的火电的平均利用小时是同比下降了84个小时，那么我们公司情况确实比他们要严重一些。那么下降的比较多的这些省份，主要是我们在河北南网，在福建罗源，还有山东德州电厂下降了比较多一些。 In the first quarter of this year nationwide, utilization hours dropped by 84 hours and the drop we recorded was a bit higher than that. The worst performing provinces include Hebei South Grid, Fujian Luoyuan and Dezhou Power Plant in Shandong Province. 好，谢谢。好，谢谢你黄小姐。The next question comes from Lehman Brothers, Walden Xin. 下一个提问是雷曼兄弟的申先生，是吗？申。申先生，对不起，请你提问。谢谢。各位老总，我有一个问题，就是关于最近电监会好像提出了要加速国家的电力改革，其中有两点，就是输配电分家，还有另外一点就是将来用电大户可以直接去电厂去购买发电量。我想问一下，这个影响，管理层觉得对华能是有利还是没有影响呢？谢谢。 Recently, the State Legislative Commission stated that there should be an acceleration of the pace of power industry reform in China, especially in two areas. Firstly, there should be a separation of transmission and distribution. Secondly, bilateral transactions are going to be introduced to allow large business customers to buy directly from power generators. How will that impact the company? Is that going to be favorable or unfavorable to the company's operations? 请黄建先生回答。输配分开和直供电都是中国电力体制改革的一些内容。从目前看，进展的速度并不是像预想的那么快。最近电监会有一个叫19号文，正在研讨过程中，要推进这项工作，我们也正在跟踪。我们还是很希望能够输配分开，这样的话能够使电网的运作更加透明。 The separation of transmission and distribution and the introduction of bilateral contracts are part of the package of power industry reform in China. As we understand, these reform initiatives are not progressing as fast as people expected. Currently, there's a whole document number 19, which is under discussion by the government, and there's indication that they want to push forward these reform initiatives. We are closely monitoring the department. On our part, we'd like to see the separation of transmission distribution, because that will help to improve the transparency of the transmission companies. 输配分开按照电监会的计划，大概是要花五年的时间完成这项工作。关于直供电，应该说在各地都有部分电厂和用户开展直供电。但是我们公司的看法，直供电这项业务一定要得到电网的支持，我们才能做这项工作。当然电网公司对这个事情不是很热心的，所以在得不到电网大力支持的情况下，我们公司会很谨慎。 According to the plan of SERC, it will take about five years to complete the separation of transmission and distribution. As to the bilateral transaction, currently it is being practiced at a local level with a limited scale. Our view is that for the bilateral transactions to work, we need support of the power grids. Right now, the grid companies are not very enthusiastic about bilateral transactions; therefore, we'll be quite cautious in pursuing that opportunity. 申先生，你有跟进的提问吗？有一个跟进的提问，想多问一句，关于今年电监会会不会有一些竞价上网的试点呢？ One follow-up question is that this year, will SERC initiate another pilot power pooling? 黄建刚。据我们了解，电监会目前推动竞价上网的重点是华东地区，但是现在一季度没有开展，估计在稍后的时间可能会启动这项工作。 To our knowledge, the key focus of SERC regarding power pooling right now is eastern China. There was no power pooling in East China in first quarter of this year. We expect the power pooling to start later this year in eastern China.