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CORPORATE PRESENTATION

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CORPORATE PRESENTATION Powered By Docstoc
					China Power International Development Limited


             Corporate Presentation

                September 2006
Agenda


               Company Overview

         2006 Interim Results Highlights


         Business Review and Updates


                Future Outlook


                     Q&A


                                           2
Company Overview
Company Snapshot


   Flagship company of China Power Investment Corporation (CPI
              Group) – one of the five national Gencos


       A leading China IPP incorporated in HK over 10 years



    Experienced Management Focus on Corporate Governance



    A member of Hang Seng China-Affiliated Corporation Index



                                                                 4
Shareholding Structure

                                       One of the 5 national Gencos
                                       Over 30GW controllable installed
                      CPI Group        capacity spanning 24 provinces
                                       Having succeeded all the nuclear power
Mainland                               assets from former SPCC
China
Hong Kong
                                       Investment holding company
                   CPI Holdings (HK)   New project Incubator company




                            63.7%      Flagship of CPI Group, platform for
     Public
                                       overseas financing
                                       Only Hong Kong based among 5
           36.3%                       national Gencos
                     China Power       Preferential right to develop and
                                       acquire power assets
                                       A member of Hang Seng China-
                                       Affiliated Corporations Index


                                                                                5
Our Quality Asset Portfolio
Net Ownership Capacity (MW)                                                               O    Operational Power Plants
                                                                                          Pingwei:               1,230 MW

                                                                                          Yaomeng:               1,210 MW

                                                                                          Shentou I:             1,200 MW

         M       Managed Power Plants                                                             :
                                                                                          Changshu:                615 MW

                                                                           M              Total:                 4,255 MW
        Qinghe:                  1,200 MW
                                                                  Liaoning
        Guixi:                     500 MW


        Shaxikou:           300 MW (Hydro)      O                                         Power Assets Under Call Option
                                             Shanxi                                       Shanghai Power:        1065.1 MW
        Wuhu:                      240 MW
                                                                  Jiangsu
        Hongze:                     18 MW     Henan G
                                                O                     M

                                                                          O
                                                          M       O
        Total:                   2,258 MW                                      Shanghai
                                                                                           G    Greenfield Power Plants
                                              Hubei   G       G    Anhui
                                                                                          Pingwei II:             1,200 MW
                                                          M

                                                      Jiangxi         M
                                                                                          Yaomeng II:             1,200 MW
                                                                  Fujian
                                                                                          Huanggang Dabieshan:    1,116 MW

                                                                                          Total:                 3,516 MW




                                                                                                                             6
2006 Interim Results Highlights
Operating Highlights

                                                                  1H06                             1H05       % of Change


Net capacity (MW)                                                    4,255                            3,055     39.3%

Gross generation (MWh)(1)                                    11,884,930                         7,402,816       60.5%

Average utilization hours(1)                                         3,265                            3,035      7.6%

Net generation (MWh)(1)                                      10,988,071                         6,928,642       58.6%

Average realized tariff
                                                                   226.72                           237.53       -4.6%
(RMB/MWh)(1)

                                              (1)
Unit coal consumption (g/KWh)                                      351.80                           340.26       3.4%




       (1)   Data does not reflect results of 50% owned Changshu but includes 2H05 results of Shentou I.
                                                                                                                            8
Earnings Highlights

 (RMB ‘000)                           1H06        1H05          % of Change

 Turnover and Other Income          2,532,139      1,673,828      51.3%

   Fuel Costs                       (1,512,896)   (1,000,140)     51.3%

   Other Operating Costs            (667,038)      (405,242)      64.6%

 Operating Profit                    352,205         268,446      31.2%

   Finance Costs                     (46,140)       (36,001)      28.2%

 Share of profit of associated Co     42,075          51,175      -17.8%

 Profit before taxation              348,140         283,620      22.7%

   Taxation                           41,509        (33,533)      23.8%

 Profit for the period               306,631         250,087      22.6%

 Profit to equity holders            307,213         250,312      22.7%

 Basic EPS (RMB)                    RMB0.10         RMB0.08        25%




                                                                              9
Business Review and Updates
Generation and Utilization Rates Analysis

                   Gross Generation(1)                                 Utilization Rate Analysis
(Gwh)                                                       %

                                                   11,885
                                  .5%
                              +60
                7,403
                                                                  71        75        77          59           63

                  1H05                              1H06        Pingwei   Yaomeng   Shentou I   Changshu     National
                                                                                                           Thermal Ave.

   Capacity increase from acquisition &
   technical upgrades
                                                                Except that of the associated Changshu
   Well positioned in power grids                               Power Plant, utilization rates of our power
                                                                plants were better than national thermal
   Strengthened production management                           average in 1H06.


(1) Data does not reflect results of 50% owned Changshu.
Source: Company date and China Electricity Council


                                                                                                                          11
Tariff Analysis

      (RMB/MWh)                      Yaomeng                                                (RMB/MWh)                              Pingwei


                             +6.94%              +7.39%                                                                  +2.51%             +8.87%
          +25.3%                                                                                  +9.62%

                    291.0             311.2              334.2                                                   319.0               327              356.0
  232.2                                                                                       291.0
  Pre 05           Pre 06             Post 06        Benchmark                               Pre 05             Pre 06             Post 06         Benchmark
Adjustment       Adjustment         Adjustment          Henan                              Adjustment         Adjustment         Adjustment           Anhui

                                                                                            (RMB/MWh)                           Changshu
    (RMB/MWh)                        Shentou I

                                                                                                                           +3.94%              +1.43%
                                             +16.04%                                                 +5.24%
                          +15.08%
          +25.73%

                                                         260.4                                  338.0              355.7              369.7              375.0
  155.1             195.0             224.4
  Pre 05           Pre 06             Post 06        Benchmark                                  Pre 05             Pre 06             Post 06        Benchmark
Adjustment       Adjustment         Adjustment         Shanxi                                 Adjustment         Adjustment         Adjustment         Jiangsu
           Note: (1) Includes VAT, effective June 30, 2006; (2) Benchmark tariff is the unified tariff for new plants in the same province. (3) 15 RMB/MWh
               extra tariff for desulphurization units
                                                                                                                                                                 12
Coal Cost Analysis

               Unit Fuel Cost                            Standard Coal Price

RMB / MWh                                 RMB / ton


150     144         142                    450
                                138                   424
140                                                             407
                                                                          391
                                           400
130

120
                                           350
110

100                                        300
        1H05     05 Average     1H06                  1H05   05 Average   1H06

      More balanced coal supply and demand

      Improved coal quality & strengthened coal cost control

      Benefiting from low coal cost of acquired Shentou I Power Plant

                                                                                 13
Operating Cost per MWh Sold

(RMB per MWh Sold)               1H06     1H05    Change                     Analysis


Fuel costs                      137.69   144.35    -4.6%   Lower coal consumption; Improved coal
                                                           quality; Low coal cost of Shentou I

Depreciation                     17.33    21.08   -17.8%   Light asset base of Shentou I



Staff costs                      13.83    16.76   -17.5%   Low staff cost of Shentou I


Repairs and maintenance           9.70     9.69     0.1%


Consumables                       3.40     2.82    20.2%   Higher unit consumables of Shentou I


Other operating expenses, net     16.5      8.1   102.3%   Higher emission charge and water usage
                                                           charge; Higher expenses for new plant
                                                           construction; Exchange loss, etc.
Total                           198.39   202.84    -2.2%




                                                                                                    14
  Operating Cost Structure Analysis


                       1H 05                                                      1H 06

               4.0 %
                                       Fuel costs
           1.4%
                                                                                8.3 %
                                                                        1 .7%
        4.8%
                                       Depreciation
    8.3%                                                          4.9%

                                       Staff costs              7 .0%

10.4%                                  Repairs & Maintenance
                                                               8.7 %

                                       Consumables

                               71.2%                                                      69.4%
                                       Other o perating
                                       costs,net




                                                                                             15
Financial Position & Use of Proceeds

                Debt to Equity                        EBITDA Interest Coverage
 (% )                                           (x)
                                 65.7%
                                                         8.5x
           52.9%
                                                                          5.1x




          31 Dec 05         30 June 06                   2005             1H06




                           Power plants under construction:     285 million RMB
         Use of
        Proceeds           General operating expenses:          28 million RMB

                           Total                                313 million RMB




                                                                                  16
Green Field Projects

   Pingwei II – Construction Site

                                                              Pingwei II
                                                               :
                                                     1H06 Capex:600 million RMB
                                                                         :
                                                 Expected Commissioning:Q2&3, 2007



                                                            Yaomeng II
                                                              :
                                                    1H06 Capex:507 million RMB
                                                 Expected Commissioning: Q1&2, 2008



                                                        Huanggang Dabieshan
                                                     1H06 Capex: 457 million RMB
                                                                        :
                                                 Expected Commissioning:Q3&4, 2008



               Confident for on-time completion with controllable cost

                                                                                      17
Future Outlook
Growth Roadmap

    MW
12000                                                          10,000+

10000
                                       +
                                  R 35%
                               AG          5,455+Acquisition
 8000                        C

                                4,255+Acquisition                            A cq uis ition
 6000                                                                        Con s tr uction
                        4,255
                                                                             IPO

 4000      3,010

 2000


    0
        IPO 2 0 0 4   2005          2006        2007           2008


 Develop and acquire power assets through the preferential rights granted by the parent
 Maximizing shareholder value is our first priority in choosing future acquisitions

                                                                                               19
Planning Power Plants for Future Expansion
                                                             Installed Capacity



                                                               P   Power Plants under planning
                                                              Pingwei III:         2×1,000 MW
                                       Liaoning
                                                              Yaomeng III:         2×1,000 MW

                                                              Changshu III:        2×1,000 MW

                      Shanxi                                      :
                                                              Wuhu:                 2×600 MW

                                                              Total:                 7,200 MW
                       Henan P         Jiangsu
                                   P
                                             P
                                 Anhui
                       Hubei             P        Shanghai



                               Jiangxi
                                       Fujian




                                                                                                 20
Separating Non-core Assets to Control Costs

             CPI Holdings (HK)



                                                Rationale of Restructuring
               China Power
                                                   Separate non-core business
                                                   Enhance productivity
                                                   Achieve cost savings through
                Pingwei & Yaomeng
                    Power Plant                    competition
                                                   Alleviate future labor cost
                                                   increase pressure

  Power             Repair &        Ancillary
Generation         Maintenance      Services




                                                                                  21
 Scheduling Technical Upgrades and Desulphurization

     Background                   Plan                   Benefits

   Government                                        Capacity increase:
                             Period: 5 years
requirement – Reducing                            5-10%
                            (2007-2011)
energy consumption Per                               Lower coal
GDP                                               consumption: 12~20
                            Target capacity for
                            Upgrades:             g/kWh
   Environment Pressure
                            3100MW
and Incentives – reducing                           Improved reliability
                            Desulphurization:
pollutant emissions and                           and safety
                            3800MW
implementing extra tariff                            Extra tariff hike &
for Desulphurization                              lower emission
                            Estimated Capex for
                             Upgrades :           charge
   Good timing – balanced
                             1.4 billion RMB
power supply and demand                              Payback period:
                             Desulphurization:
situation                                            6~9 years
                             1 billion RMB


                                                                           22
For any further questions, please contact:

Mr. Xinyan Zhao – Vice President
Mr. Rufeng Shou – Investor Relations


Tel:               (852) 2802-3861
Fax:               (852) 2802-3922
Email:             ir@chinapower.hk
Website:           www.chinapower.hk


                                             23

				
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