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大众公用(1635.HK/600635.SH):三十余载深耕公用事业,以长期主义铸就稳健成长之路

Public Works (1635.HK/600635.SH): Deeply involved in utilities for more than 30 years, forging a path of steady growth with a long-term approach

Gelonghui Finance ·  May 16 20:24

Recently, the utility sector has performed brilliantly, drawing enthusiastic attention from the market. Industry experts have pointed out one after another that as China's economy enters a new development model, utility enterprises may gradually transition to marketization in the future and gain vitality.

On May 16, Dazhong held a press conference to have in-depth exchanges on issues of public concern.

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This established utility company was founded in 1991 and went public in 1993, making it one of the first public utility companies to be established and listed. Over the past 30 years, Volkswagen Public Utilities has experienced cycle ups and downs, passed various tests, and showed great resilience.

Yang Guoping, chairman of Volkswagen Public Service, said in an interview with the media that in 2022, due to the epidemic, the company lost its first loss since its establishment, but the main utility business maintained steady development. In 2023, the company achieved a year-on-year increase of 223 million yuan in net profit and loss attributable to shareholders of listed companies after deducting non-recurring gains and losses, an increase of 74.81%! This achievement is also the second highest point achieved by the company since listing, and is only slightly lower than the highest data in 2016.

Yang Guoping said that seizing the opportunities of the times and highlighting strategic leadership is an important reason for public utilities to achieve steady development.

I. Review: Actively Embrace Trends and Build Core Competitiveness

Yang Guoping pointed out that since its launch, Volkswagen Public Utilities has experienced two important transformations, from “Pudong Volkswagen” to “mass science and innovation” to “mass public use,” and has established a two-wheel drive development strategy for utility investment and financial venture capital.

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For more than 30 years, public utilities have taken advantage of the situation, followed the trend, and actively embraced the trend. Volkswagen Public Utilities started as the first taxi company in Pudong, Shanghai, then followed the pace of reform and opening up to achieve transformation and upgrading, gradually laying out utilities such as urban gas, municipal facilities, and environmental protection industries.

In addition to firmly grasping the opportunities of the times, adhering to a correct and sustainable strategy is another important reason for the success of public utilities.

Yang Guoping pointed out that adhering to the business strategy of “seeking progress through stability, focusing on stability”, the company conducts analysis and research on external situations such as the macro situation, competition situation, regulatory environment and industry development trends, formulates development plans suitable for the enterprise, leverages the company's centralized control and business support capabilities, continuously improves corporate governance, and promotes steady growth and healthy development in the two main industries of utility investment and financial venture capital.

It is based on this strategic positioning and business philosophy that Volkswagen Public Utilities has been able to maintain its competitive advantage and achieve an everlasting foundation.

II. Prospect: Start from “new” and forge ahead

Yang Guoping also revealed the company's development strategy for the next few years. The company plans to strengthen investment in the main utility industry by further adjusting the industrial investment layout to consolidate its momentum for sustainable development.

In the utility sector, the company will continue to increase the proportion of investment in major projects and actively expand investment and acquisition opportunities for high-quality projects, with a particular focus on gas engineering, sewage treatment, waste solid waste treatment, and the extension of the upstream and downstream industrial chains. The company remains optimistic about investment opportunities in China's energy and environmental protection industry, and promises to pay close attention to changes in the industry market, make careful judgments, and seize investment opportunities suitable for the company.

In the gas sector, various subsidiaries under Volkswagen Public Utilities will seize the opportunity of business market recovery and steadily increase market growth. The company will improve the quality of basic services, strengthen safety and security, and deepen extended services, while actively seeking diversified and intelligent development paths. In order to support this goal, the company will further increase investment in existing gas companies to increase the momentum for enterprise development.

In the environmental protection industry, the company actively pays attention to merger and acquisition opportunities for environmental treatment projects, including upstream and downstream sewage treatment companies, technology companies, and fields such as solid waste treatment, hazardous waste treatment, and air pollution prevention.

Yang Guoping placed special emphasis on the importance of intelligence and digitalization. In the gas sector, public utilities will carry out safety inspections to ensure service quality and safety. In the environmental sector, the company plans to achieve intelligent management by establishing energy consumption and equipment management systems, which will help reduce operation and maintenance costs and ensure the continuous and stable operation of environmental facilities.

Furthermore, the company will actively pay attention to digital transformation and explore how to integrate advanced technology into traditional industries to break through industry bottlenecks and improve efficiency. Green energy service utility projects will also be one of the company's future focus areas.

3. Adhere to the long-term values of sustainable development

Public utilities adhere to the long-term principle, which is reflected not only in focusing on the long-term development of the company itself, but also in the company's commitment to implementing the concept of sustainable development and actively assuming social responsibility.

On the one hand, the company has achieved good results in ESG (Environmental, Social and Corporate Governance).

Public Utilities's ESG practices and disclosure work began early. The “Public Utilities Environmental, Social and Governance (ESG) Report” has been disclosed to the public for 7 consecutive years, showing all stakeholders its ESG initiatives in operation and management. In 2023, the company was awarded the “2023 ESG Best Practice Case for Listed Companies” by the Chinese Shanghai Association and selected as one of the “Top 50 Carbon Neutrality Awards in the 1st Guoxin Cup • ESG Golden Bull Award”. ESG governance was widely recognized by all parties.

“We know that public awareness of environmental protection and sustainable development continues to rise, which means investors will gradually begin to expect companies to assume their due sense of social responsibility and use their resources to make due contributions to the sustainable development of society and the environment. In future markets, a company's performance in terms of sustainability may directly or indirectly influence investors' decisions.” Yang Guoping said in an interview with reporters.

The fourth meeting of the 12th board of directors of the company deliberated and approved the change of name of the Board Strategy Committee to the Board Strategy Development and ESG Committee, further reflecting the importance the company attaches to ESG work.

On the other hand, Volkswagen Public Utilities insists on providing stable returns to investors.

According to statistics, since its listing in 1993, the company has raised a total capital of about RMB 2,614 billion (of which the net capital raised from the H-share listing is approximately RMB 1,478 billion), and the cumulative cash dividend amount is approximately RMB 2.4 billion. Among them, since listing on H shares in 2016, the company has paid dividends a total of 8 times, and the cumulative cash dividend amount has exceeded RMB 1.2 billion.

“Dazhong Public Utilities has always had a good history of dividends and insists on repaying the trust and support of shareholders and investors through continuous and stable dividends.” Yang Guoping said. He further revealed that the company maintained a share payout ratio of close to 40% for most of the years after listing. Even under the special circumstances of loss of profits in 2022, the company insisted on dividends, demonstrating the company's sincerity and high sense of responsibility towards shareholders and investors.

“In the future, when formulating an annual dividend plan, the company will comprehensively consider its own profit level, capital expenditure arrangements, and debt repayment capacity, take into account investor returns and company development, and enhance dividend stability, sustainability and predictability.” Yang Guoping revealed.

The company provides investors with stable returns, which is not only a financial act, but also achieves an organic combination of shareholders' interests and social responsibility, and establishes a good corporate image and social reputation. Through this approach, the company has established a long-term and stable enterprise development model, promoted healthy interaction between enterprises, shareholders and society, and promoted its own development in a more sustainable and healthy direction.

At this news media conference, Dazhong Public Utilities showed the outside world its deep strength and determination to develop in the field of utilities. We expect Volkswagen Public Utilities to continue to maintain a steady development trend in the future and create more value for shareholders and society.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
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