the hkiaat accounting and business management case
TRANSCRIPT
The HKIAAT
Accounting and Business
Management Case
Competition 2012-2013
Tertiary Institute Group
Institution: School of Continuing and Professional Studies,
The Chinese University of Hong Kong
Team members:
Wong King Hung, Kevin (Team Leader)
Lau Wang Yam
Li Lai Shan
To Ka Chun
Table of Contents
Executive Summary
I. Introduction
II. Current Business Situation
III. Financial Analysis
IV. Strategic Analysis
V. Conclusion
VI. Strategic Plan
VII. Implementation Plan
VIII. Financial forecasts
Appendices and references
Executive Summary
This report provides a comprehensive analysis and evaluation of The Hong Kong and
China Gas Company Limited (Towngas)’s operation efficiency, financial stability and the
formulation of business tactics. This report used various methods to analysis the energy
supplier’s performances including ratio analysis for analysing on financial aspect,
PESTLE, SWOT analysis and Porter Five Force analysis for analysing on business
aspect both internally and externally. Two set of questionnaires were conducted to
obtain valuable data for comprehend customers’ behaviour.
Results of the financial analysis show that HKCG has a strong financial position, good
current assets management and good ability to pay its current liabilities. Despite the
bright side of the financial position, HKCG has indications on gradual decrease of profits
due to increase in production costs and exchange rate loss. Results of business
analysis reveal massive opportunities in China’s market and slightly negative sign in
local market. The major strength of HKCG is that it has a large potential customer base
and diversified businesses. The major weakness is the slow growth in local market
which requires further investigation by the company and appropriate remedial actions.
The report ends with suggested strategic and implantation plans in response to the
findings. Major plans include launching marketing campaigns, improving customer
services and assisting restaurant alliance that are recommended in the territories.
Recommendations in mainland China include increasing number of gas station and
coverage of pipeline as well as developing new energy methane nitrate.
The limitations of this reports are the inadequate information and the information
lagtency, the company may disclosed inadequate information related to internal
business decisions as well as the extraction of statistic data may not be up-to-dated.
I. Introduction
The Hong Kong and China Gas Company Limited (Towngas) was founded in 1862. The
HKCG is a listed corporation which is one of the largest energy suppliers in Hong Kong.
The core business consists of the production, distribution and sale of gas, the sale of
gas appliances, as well as the comprehensive post-sale services. The company
established a high reputation in the city and supplies gas over 1.75M active users with
their pipeline network (Length: over 3,500km). Besides its core business, HKCG has
diversified its business into new eco-energies, telecommunications, building services as
well as engineering in recent years.
Having a vision of being the leading energy supplier in Asia with an environmental
friendly focus, the HKCG and its subsidiaries has stepped into the market in mainland
China. At present, HKCG is the largest piped town gas distributor which operates more
than 138 projects across 21 provinces serving nearly 15M customers in China.
II. Current Business Situation
Hong Kong Gas Market
Market Share
According to the Hong Kong Fact Sheet, we have
following findings on the market share of gas industry.
“Town gas and LPG are the main types of fuel gas used in
HK for domestic, commercial and industrial purposes.” [R2]
“Hong Kong has about 2.3 million gas customers in the
domestic, commercial and industrial sectors of which town gas and LPG respectively
accounted for 84.7% and 15.3% of total fuel gas sold in these sectors.” [R3]
The differences between the number of active users of Towngas and the number that
are provided by the government are Towngas potential customers. Towngas has about
1.75M customers while the government stated there
are 1.95M gas customers using Town Gas. Which
indicates that Towngas still has a limited room (0.2
million customers) to growth its customer base
Market Consumption “The total consumption of gas in 2011 increased by
2.1% compared with 2010. In 2011, 55.1%, 41.1%
and 3.9% of gas produced was consumed by
[R
[R4
domestic users, commercial users and industrial users respectively. Consumption of
gas grew at an average of 0.8% p.a. during 2006 - 2011.” [R5]
According to the data from HKES 2011 AR, gas in Hong Kong is mainly consumed by
domestic users and commercial users. Less than 5% of the consumption is used by
industrial users. The growth of gas consumption remains slow, which is affected largely
by the slow population growth and the economic activities in HK.
Market Segmentation
Domestic users consist of ordinary household family with gas supply.
Commercial users mainly consist of restaurants, dehumidifier in commercial buildings,
swimming pools’ heaters, hair salons, and laundry stores. Industrial users consists
mainly food processing factories.
PRC’s Gas Market
Market Consumption (by sales)
“In 2011, the Group sold a total of approximately 4.67BCM of piped gas, representing a
substantial increase of 15.9% against 4.03BCM sold last year.” [R6]
By sales, Towngas has the leading spot in selling piped gas to customers in China.
Market Share (Upstream Gas Sector)
“China’s upstream natural gas sector is dominated by three national oil companies
(NOCs): CNPC, Sinopec and CNOOC. CNPC now holds approximately 75% of
domestic gas resources and 80% of China’s pipeline network.” [R7]
According to the data from 2007 IEA report, three state owned companies manipulate
most of the upstream gas sector while the Town Gas (China) dominates in the
downstream business process in the industry with competitive advantages. Towngas
next mission is to capture some market share from the big three in upstream business
process so as to gain some flexibility on the pricing.
Market Structure
“Industrial gas sales grew by 410MCM, representing an increase to approximately 59.8%
in the total volumes of gas sold by the Group while commercial gas sales maintained
their level at approximately 14.5% of the total gas volumes sold during the year.” [R8]
“Residential gas sales in turn accounted for approximately 25.7% of total gas sold.” [R8]
Town Gas had targeted their first customers as residential users in the early years, they
further focus on commercial and industrial users currently. Following the 12th five-year
policy, to use cleaner energy source, Town Gas can benefit from the policy as people
and industries start turn to using more gas instead of coals.
III. Financial Analysis
Profitability
Based on ratio analysis, its
Profitability was decreasing
sustainably within previous 3
years; where the net profit ratio
was decreasing between 2004
-2011. It shows that the
operation expense had been increased rapidly since the sales revenue also
increased. As for return on fixed asset and
equity ratio, a declination has been started
since 2007.. The reason behind that is the
increase of operation expense.
Asset utilisation
As for inventory turnover, Towngas has
high turnover in the inventory; it is
improved from 2004 to 2011. Although the
inventory turnovers reduced significantly in 2009, this may be resulted as large quantity
purchases on inventories (fuel) in 2009. High turnover means the inventories can be
sold quickly.
Receivable turnover still remain
from 3 times to 5 times in the
recent years. Based on the ratio
analysis, Towngas will collect the debt once in an average of 3 months It is assumed all
the sale revenue is credit sale since Towngas always provide service before collecting
money.
However, the ability of using fixed assets is
worse than before in 2011. According to the
chart, the fixed assets turnover is 76% in
2011 but compare to the period of 2006-
2007 which had been recorded a high
turnover of over 100%. Based on such
findings, we have to do further investigation on the usage of fixed asset.[1]
[1]: Due to insufficient information from the
internal of company, we are limited to do so.
Liquidity
Based on the ratios, it
provides us information that Towngas has a quite flexible liquidity on using its capital. In
an ideal situation, current ratio and quick ratio should be 1.5 and 1 respectively.
Towngas didn’t make use of their money efficiently in the past. But now, Towngas has
been improved their
strategy on managing funds
and it still has the ability to
pay the debt, as the current
ratio is roughly the same as
the standard.
Debt utilization
Towngas debt utilisation has been worsen, based on our calculation. Towngas lent lots
of debt to construct its factories. The maximum acceptable debt to total assets ratio is
50%. The ratio in 2011 is around 45%. It shows that Towngas held lots of debts. This
may bring risk to the company.
For interest coverage ratio, the ability
of Towngas repay the interest on
outstanding loan is worse. In 2007,
the ratio is 27 times which was at the
peak; however it is 11times in 2011.
This point out that Towngas has to
take extra care on its outstanding loan.
IV. Strategic Analysis
Assumptions
1. Assume general public has misunderstandings on the pricing of town gas.
2. Assume general public seldom report the meter reading accurately and on time
3. Assume Hong Kong market size growth rate is similar to the growth of population
4. Assume active LPG users or active Town Gas users have high elasticity that
means they rarely change their gas provider.
5. Assume the younger generation uses less Town Gas than the older generation.
6. Assume Town Gas has good reputation in general public and business.
7. Assume higher income class uses lesser Town Gas
SWOT & PESTLE & related
Hong Kong Special Administrative Region
Strengths Weaknesses Opportunities Threats
Po
litic
al Government regulation Measures on enhancing
housing supply[2][3] Government subsidy
Eco
no
mic
AUD to HKD exchange rate remains high around 1AUD to 8-8.5HKD [4]
So
cia
l
Good reputation of companies Low number of complaints Most families use town gas
Most families think the price of coal gas is high.
Population growth:0.3%p.a. Trend of environmental care Trend of electronic service[5]
Tech
no
logic
al New SAP environment
[6] CLP has Ultra TEV
Monitor systems to serve Hong Kong customers.
Legal Limitation of emission
by Cap.311
En
viro
nm
enta
l Towngas involves in clean air charter
Fin
an
ci
al
Enough current asset to pay debt Have enough capacity to develop
Low gross profit ratio
Ma
rk
et
High market share of gas
Saturated market Planned new areas of supply in Hong Kong [7]
Saturated market
Pro
du
ct
Limited functions for coal gas
People’s Republic of China
Strengths Weaknesses Opportunities Threats
Po
litic
al
Improving social welfare [8]
Emission reduction in 12th five year plan [9]
Strategic emerging industries in 12th five year plan [10]
Urbanisation [11]
Encourage the development of information technology [12]
Government regulation
Eco
no
mic
China’s GDP growth slows to 7.6% but inflation rate maintains around 1.5 to 2.5 in recent years.[13]
AUD to CNY exchange rate maintain around 1AUD to 6.5CNY[14]
World interest rate maintains low(0.25%p.a. for U.S.A, 0.5%p.a. for HK)[15]
So
cia
l Obtain good image as a social responsible enterprise
The population grew to 1,354.04 million by 0.50%.
The changing cost of customer is high
Tech
no
logic
al
Introduce the technology using natural gas to produce coal gas. Introduce automated gas re-fill process to solve the peak-time demand for natural gas in taxi driver
Legal Introduction of Law of
the PRC on Prevention and Control of Water Pollution
The Air Pollution Control Law updated 2010
En
viro
nm
enta
l
Factories have trends to move into western china.
Ma
rk
et
Switching cost is quite high for customer
Hu
ma
n
Re
sou
rce
s Conflict of culture
between management and staffs
[2]: Increases potential customers
[3]: Increase demand
[4]: Increases the cost of purchasing raw material.
[5]: People would like to use apps to report meter
[6]: Increase productivity by >10%
[10]: Application of clean coal and development of coal based
chemical industry
[11]: Extends the coverage of water, gas, electricity and
communication network which require lots of infrastructure
constructions
[7]: Attracts new customers
[8]: The probability of using gas for the PRC citizens will
increase.
[9]: Promote low carbon energy in China.
[12]: Arise needs of services from Towngas Telecom
[13]: Increase the cost of purchasing raw material.
[14]: This can provide a stable environment to expand.
[15]: Can finance additional capital for expansion with a fixed
interest rate.
Porter’s Five Force Model of Gas industry
Threats of New Entrants
In HK, the threat of new entrants is low in the industry due to the high entry barrier as
the gas industry required specified distribution channels and assets like over 3,000 km
pipelines across town, plants, etc. Brand switching is difficult for customers as the cost
is higher than the benefit. Despite Town Gas has no legal protection from any exclusive
franchise arrangement, TG can still enjoy the high entry barrier in the industry and
continue to seek for any potential entrants by achieving its economies of scale in a
relatively small market.
In China, the threat of new entrants is higher compare to HK’s market. Despite the high
entry barrier, the upstream gas suppliers have adequate capital and technology to enter
the market and access to distribution channels. TG can take the advantage of CEPA
and good reputation among Chinese market as being a HK based company to gain an
edge over others new entrants. So far, the market share of Towngas in China is still
high for most downstream business for residential users.
Bargaining Power of Suppliers
In HK, the suppliers are mainly from Australia and Mainland China. The bargaining
power of suppliers is powerful as the crude oil and natural gas providers are
concentrated. However, TG can still enjoy the low price to purchase high quality gas
from the suppliers at least for three more years as TG entered into the fixed-price
contract with the suppliers few years ago when the economy was bad. In China, the gas
and oil suppliers are mainly from the three national corporations. The suppliers are
concentrated. The bargaining power of suppliers is powerful.
Bargaining Power of Buyers
In HK, the bargaining power of buyers is weak due to significant buyer switching costs
and fragmented buyers. Despite the product is standardised, the availability for
substitutes is low. The government monitors and ensures the price set at a reasonable
and affordable level by TG from time to time. In China, the bargaining power of buyers
is strong due to relatively low switching costs and high availability for substitutes.
Threats of Substitute Products or Services
In HK, the LPG is a substitute product that creates a threat to Towngas. Although town
gas is multi-purposed product which may use for cook, bath, etc. But the cost is higher
than LPG. So, some household with low income will choose to use LPG. In china, the
threat of substitute products is coal and other kinds of gas fuel. Coal is the major energy
resources in China less developed regions as coal is quite inexpensive compare to coal
gas. However, burning of coal creates serious air pollution to the environment, which is
less favourable in the urban regions. With the foresight of Towngas, its pipeline is
constructed mainly in urban areas, so that the threat arises from coal is minimised.
Rivalry among competitors
HK region’s direct competitor -
LPG providers.
According to the Register Gas Supply
Companies, there are over 100 companies
which registered for LPG cylinder
distribution in HK. There are several
reasons cause the customers to use LPG
instead of using town gas.
Unavailable - Some tong lau in old urban
areas do not have gas pipes and it is
difficult and unsuitable to install new pipes.
Therefore, it is not possible for residents in
HK region’s indirect competitors -
Electric company (CLP and HK Electric)
The electric companies are the principal
competitor of Towngas. The customers are
using electricity based on these following
reasons:
Convenient and high speed - Nowadays,
many families in HK possess different kinds
of electrical equipment at home for cooking
such as the rice cookers, microwave oven
and electric kettle. Although flame cooking
may be bring us more delicious dishes than
the dilapidated urban areas to use coal gas.
Only few choices remain for them to
choose. One of those is LPG, which is
convenient and simple to use.
Lower price - The cost of using LPG is less
than the cost of using coal gas. This is the
second reason that attracts customers to
use.
using the electrical equipment, these
equipment are not just convenient to use,
and they can assist people cook easily and
quickly.
Energy efficiency - According to the
information of a company that promotes
electric cooking; over 80% of heat is
transferred for cooking when applying
commercial electric cooking. And over 40%
of heat is lost to surroundings for gas
cooking.
PRC’s region direct competitor - China Gas
China Gas is the main competitor of Towngas which provides natural gas and LPG
services in China. It contains an enormous customers data based. Although Towngas’
total customers in China are more than China Gas, the number of China Gas’ current
customers is still numerous. It covers most of the other customers who don’t use
Towngas’ services.
V. Conclusion
The HKCG shows strong financial position yet with minor areas require remedial actions.
The company has numbers of opportunities for growth in China. Overall, the company
has a positive outlook with good prospective. And we planned following directions and
goals for the following 3 years of Towngas
Hong Kong
1. Maintain the market share in Hong
Kong Gas Market by retaining active
users through improved services.
2. Expand the market share by converting
active LPG users.
3. Prevent reduction on the market size
China
1. Growth the market share in cities and
towns.
2. Increase the market size by building a
more completed piped network
3. Increase profitability by acquiring
upstream and middle stream business
by promoting open flame cooking
behaviour instead of using electricity
process by cooperating with three big
companies.
4. Increase diversity by putting resources
on water treatment plants and clean
energy projects
5. Develop and research a better method
to use the fuels more environmental
friendly
VI. Strategic Plan
HKCG Next 3 Years’ strategic plan for HK
Residential users
1. Shifting the meter reading from manual to automatic phase by phase. The new meter
will be connected to the company server and updated monthly. Users can check the
usage through smartphone application. This improves the efficiency of meter reading
and eases the reading process.
2. Promoting the advantages of flame cooking while state the threats of using
microwave. The idea here is promoting traditional cooking culture which the level and
TEMP of fire can be easily adjusted.
3. Integrating the channels of payment which encourage e payment, or through EPS.
With questionnaire results, we found that younger generation prefers using EPS or
credit card to pay bills. E payment will be more convenient for both users and company.
We hope to remain one physical channel only, supermarket. Other physical channels
will fade out phase by phase.
4. Cooperate with property developer to pre-install the pipeline in newly-built residential
buildings. With high demand on housing in the territories, the market share can be
increased by continuously working with property developers and the Housing Authority
on new residential projects. Over 98% of new private properties used Town Gas as the
gas suppliers and over 90% of new public housing estate used Town Gas as the only
gas suppliers. Negotiation process with developers are undergoing throughout the years.
5. Work with TGC, to develop better products like water heaters and built-in hob. The
main focuses of the research and development are energy efficiency, green products
and using recycled materials to build gas appliances exterior.
6. Promote using gas is a better way to save
money. Since we conclude that for the same
amount of energy consumed, using gas is
cheaper than using electricity in Hong Kong
with the calculation on the right. Plus, the
electricity tariff is progressive while the gas
tariff is regressive. This helps us to give
citizens the right message of their
misunderstanding.
Commercial users
1. Assisting restaurant owners to reduce their costs. They can cook efficiently with
lesser energy. Therefore the restaurants reduce cost but increase efficiency may
increase its capacity, table turnover may increase due to reduction of cooking time and
sales may increase, and hence increase our sales win-win situation start with crowded
restaurant.
2. Towngas Telecom provides a win-win situation for commercial users. However, the
business should move towards China. Since the competition in the telecommunication
market is fierce, the potential customers and the market size are limited.
3. Promote dehumidifier installed in new built commercial buildings or renovated
commercial buildings.
4. Construct 5 more ECO LPG filling stations in the territories. Now the ratio of LPG
vehicles to LPG filling stations is approximately 300:1. The ECO has 5 out of 61 LPG
1 kilowatt-hour (kWh) = 3.6 megajoule (MJ)
(Take 400 kWh for calculation)
Electricity tariff (first 400 kWh, 77.8₵; for the next 600 kWh, 89.3₵)
400 X 0.778 = $311.2
Gas tariff (first 500 MJ, 21.30₵; for the next 2000 MJ, 21.20₵)
400 X 3.6 = 1440 MJ
(500 X 0.2130) + (940 X 0.2120) = $ 305.78
filling stations operating in Hong Kong. In the future, the ECO will set up 5 more stations
in specified areas which increase the market share from 8% to 15%.
HKCG Next 3 Years’ strategic plan for China
1. Expand gas, water supply and optic fibre networks. Under the direction of the
Chinese government, the company could take its advantage of outstanding gas
distributors and service providers to improve social welfare and speed up the process of
urbanisation by extending the pipeline and water supply networks into the areas.
Moreover, the water treatment plants would help the government in the areas of
environmental protection.
2. Improving the quality of coal gas or water is to comply with 12th five-year plan.
CPPCC announced the plan with an objective of reducing emission. In order to comply
the plan or law, Towngas should improve the quality of coal gas. If it success, it can
enhance the brand effect to attract people to use our resources and keeps the
environment clean.
3. Expansion of coal-based chemical business in PRC. Under 12th five year plan on
strategic emerging industries, one of the industries is coal-based chemical industry.
Towngas can take advantage of its existing projects on coal and develop and construct
their business in china. In the next three years, investment should be raised in the
development and construction.
4 Development of natural gas hydrate. Based on world research, the capacity of fossil
fuel is decreasing and the remaining capacity for usage around 20 years. Using a Fossil
fuel will create much air pollution. Towngas already reduce the use of fossil fuel, but it
can’t stop using any fossil fuel. Now, scientist found the Natural gas hydrate. We
suggest Towngas can invest money to develop such resource. Since such material can
generate more energy than coal, oil and natural gas by 10 times and only produces little
quantity of carbon dioxide and water. Towngas can use such resource which reduce our
cost and improve our image as an environmental friendly company.
VII. Implementation plan
Hong Kong - Residential users
#.
Project
Duration Description Objectives PRJ Start
PRJ End
H001
Installation of New meter
1 month (trial phase); 1 months (review)
First trial: Install new designed meter in new residential buildings and testing the meter for 3months. Review: If the project proceeds successful, undergo second phase
Test the effectiveness and efficiency of the new designed meter
Review the project feasibility
Apr 2013
Aug 2013
H001A
Installation of New meter
3 months (second phase); 1 month (review)
Second Phase: Replace the old meter with the new meter in one residential district Review: If the project proceeds successful, undergo later phase
Test the acceptability of the new meter in customers’ views
Review the project feasibility
Sept 2013
Dec 2013
H002
Marketing campaign (A)
4 months
The main theme is encouraging ‘open flame cooking’ and sending out the ‘potential threads of microwave’
Attract customers to switch from flameless cooking to open flame cooking
Review the effectiveness of the marketing campaign
Mar 2013
Jun 2013
H003
Integrating the channels of payment
3 months (consultation period); 3 months (trial); 2 months (implementation)
Reduce physical channels into one (post office). Move the payment on-line through EPS and credit card.
Reduce the cost of operating multiple channels
Speed up the payment process
Review the effectiveness
Oct 2013
May 2014
H004
Marketing campaign (B)
4 months The main theme is ‘Save your money, use Town Gas’
Correct the misunderstandings among residents
Review the gas usage
Jan 2014
Apr 2014
H005
Develop with TGC to improve products
Every Year Main focus of 2013: efficient gas appliances Main focus of 2014: appliances using green energy Main focus of 2015: using recycled materials for appliances’ exterior
Develop products with value added to customers
Develop unique technology to apply for patent
Follow the company’s goals and directions
Jan 2013
Dec 2015
Hong Kong – Commercial users
China
H006
Installation of the pipeline in new property projects
Every Year To negotiate with the developers about installing pipelines in new residential buildings under construction
Provide the residents the ease of assessing supply
Increase the speedy conversion of new customers
Jan 2013
Dec 2015
#.
Project
Duration Description Objectives PRJ Start
PRJ End
H00
7 Replace eco
burner Scheme 1 month (trial); 6 months (review)
Assist the restaurants to replace more efficient heater and eco burner
Replace the efficient heaters and eco burners
Review the cost saved through this scheme
Apr 2013
Sept 2013
H007A
Pre-order application for restaurant alliances
1 month (development); 3 months (trial)
Value-added services for the restaurant alliances; Speedy the operations of the restaurant; If the application undergoes successfully, the scheme will continue
Improve table turnover of the restaurants in peak hours
Increase the consumption of Town Gas
Improve the relationship between customers and our company
Oct 2013
Jan 2014
H008
Marketing campaign
4 months Promote the uses and advantages of dehumidifier
Attract new commercial customers to use towngas-powered dehumidifier
Negotiate with developers of new commercial buildings to install appliances
Mar 2014
Jun 2014
H00
9
5 new ECO LPG filling stations
2 year (phase by phase) Phase 1 (Jan 2014) Phase 2 (May 2014) Phase 3 (Sept 2014) Phase 4 (May 2015) Phase 5 (Oct 2015)
Construct five more ECO LPG filling stations in the territories
Set up 5 more stations in specified areas (One in HK Island, Two in KLN and Two in NT )
Increase the market share from 8% to 15%
Jan 2014
Dec 2015
#.
Project
Duration Description Objectives PRJ Start
PRJ End
C001
Expand gas, water supply and optic fibre networks
4 years Install intensive optic fibre networks inside the pipelines and extend pipeline network into urbanisation area Meet the requirement of Broadband China Project
Lengthen China’s Telecommunication network
Increase market share Increase users
numbers Diversify the business
Apr 2013
Apr 2017
C002
Construction of oil gas station
1 years Phase 1 (Jan 2014) Phase 2 (May 2014) Phase 3 (Sept 2014) Phase 4 (May 2015) Phase 5 (Oct 2015)
Construct up to 10 oil gas stations in China within three years
Increase the number of users and market share in china
Reduce the emission by encouraging people to use LPG vehicles
Jan 2014
Oct 2015
C0
03
Expansion of coal-based chemical business in PRC
2 years Construct an additional coal-based chemical facility in PRC and recruit related human resources
Integrate downstream business
Enter into new energy
Be the market leader
Apr 2015
Jun 2017
C0
04
Installation of the pipeline in new property projects
Every Year To negotiate with the developers about installing pipelines in new residential buildings under construction
Provide the residents the ease of assessing supply
Increase the speedy conversion of new customers
Jan 2013
Dec 2015
VIII. Financial Forecasting
2015 2014 2013
Income statements of Towngas in HK $M $M $M
Sale Revenue 25700.44 25196.51 23996.68
Total operation expenses -21063.30 -19476.83 -18221.64
4637.14 5719.68 5775.03
investment income
other income 631.9 617.9 646.0
interest expense -870.53 -829.08 -789.60
Share of profits less losses of associated companies 1907.42 1816.59 1730.09
Share of profits less losses of jointly controlled entities 964.32 945.41 926.87
Profit before tax 7270.27 8270.45 8288.39
2015 2014 2013
Income statements of Towngas in PRC $K $K $K
Sale Revenue 10,224,299.90 7,864,846.08 6,049,881.60
less: total operation expense (9,755,646.54) (7,128,911.48) (5,368,913.76)
Profit before investment income 468653.36 735934.60 680967.85
other income 260,105.35 236,459.41 214,963.10
Share of profits less losses of associated companies 225,183.53 214,460.51 204,248.10
Share of profits less losses of jointly controlled entities 230,469.25 219,494.52 209,042.40
financed cost (178,238.21) (165,188.33) (153,093.92)
Profit before tax 1,006,173.28 1,241,160.70 1,156,127.53
Assumption
HK 2013 2014 2015
the rate of increasing sale revenue 7% 5% 2%
Promotion 4M 4M 4M
new meter 4m 8m 8m
development 4m 4m 4m
gas station 650m 2600m
Share of profits less losses of associated companies 5% 5% 5%
Share of profits less losses of jointly controlled entities 2% 2% 2%
the rate of increasing operation expenses 8.7% 5.7% 3.7%
depreication of gas station0.25 per year
China 2012 2013 2014 2015
the cost of material / sale 63% 63% 63%
sales growth 40% 25% 15%
the cost of material 2,754,861
Installation of New Coal pipe 300,000 k 400,000K
gas station 1500,000k 1500,000k
market campaign 4M 4M
Share of profits less losses of associated companies 5% 5% 5%
Share of profits less losses of jointly controlled entities 5% 5% 5%
depreication of gas station0.25 per year
Development 4,000k 4,000k 4,000k
operation cost 7.9% 7.9% 7.9%
financing cost 7.9% 7.9% 7.9%
other income 10% 10.0% 10.00%
water treatment plant 20m 20m
installation of optic fibre network 4m 4m 4m
Reference
[R1]: Hong Kong Fact Sheets
(http://www.gov.hk/en/about/abouthk/factsheets/docs/wp&g_supplies.pdf)
[R2]: Hong Kong Fact Sheets
(http://www.gov.hk/en/about/abouthk/factsheets/docs/wp&g_supplies.pdf)
[R3]: Hong Kong Fact Sheets
(http://www.gov.hk/en/about/abouthk/factsheets/docs/wp&g_supplies.pdf)
[R4]: Data Source: HK Energy Statistics 2011 Annual Report
[R5]: HK Energy Statistics 2011 Annual Report
[R6]: Town gas (China) annual report 2011
[R7]: 2007 IEA report
[R8]: 2011 Annual Results Announcement
問卷調查(個人習慣)
Survey Questionnaire (Personal habits)
請回答下列各題：
Please answer the following questions:
1. 請問閣下常以下列哪種方式沐浴?
Which of the following is your or your family usual way of bathe?
□ 淋浴 □ 浸浴 □ 其他:
□ Shower □ Bath □ Others:
2. 請問閣下兩年內有否在冬季使用任何暖水游泳設施? 如果有, 請提供大約次數.
Did you use any heated swimming facility within two years? If yes, please provide the number of times of visits.
□ 有, 次 □ 否
□ Yes, Times □ No
3. 請問閣下或閣下家庭每月大約使用多少次乾洗服務?
How many times of dry cleaning service is used by you or your family per month approximately?
□ 0 次 □ 1-3 次 □ 4-6 次 □ 7-10 次 □ 10 次以上
□ 0 times □ 1-3 times □ 4-6 times □ 7-10 times □ More than 10 times
4. 請問閣下大約多久剪一次頭髮？
How often do you have your haircut?
□ 1-2 個月 □ 3-4 個月 □ 5-6 個月 □ 6 個月以上
□ 1-2 months □ 3-4 months □ 5-6 months □ Over 6 months
5. 請問閣下家中使用下列哪種能源來煮食?
Which of the following energy is your family major cooking method consumed?
□ 煤氣 □ 石油氣 □電 □ 其他 :
□ Gas □ Liquefied petroleum gas □ Electricity □ Others :
6. 請問閣下的煮食爐具是否在煤氣公司購買或其品牌為 TGC 或是 SIMPA 簡柏?
Are your stoves were purchased via Town Gas, or the brands of the stoves are TGC or SIMPA?
□ 有 □ 否
□ Yes □ No
7. 請問閣下的煮食爐具其品牌是否為 TGC 或是 SIMPA 簡柏?
Are the brands of your stoves are TGC or SIMPA?
□ 有 □ 否
□ Yes □ No
8. 請問閣下每星期大約有多少天外出使用晚餐?
How often do you eat out for dinner per week?
□ 0 天 □ 1-3 天 □ 4-6 天 □ 7 天
□ 0 Time □ 1-3 Time/s □ 4-6 Times □ 7 Times
9. 請問閣下最常光顧什麼類型的食肆?
Which of the following is your most frequented type of restaurant?
□ 日本菜 □ 中國菜 □ 意大利菜 □ 法國菜 □ 印度菜 □ 其他:
□ Japanese □ Chinese □ Italian □ French □ Indian □ Others:
受訪者資料:
Respondent information:
收入 Income:
□ <$6000 □ $6000 - $10000 □ $10000 - $20000 □ $20000 - $30000
□ $30000 - $40000 □ $40000 - $60000 □ ≥ $60000
年齡 Age:
□ 15 - 25 □ 26 - 35 □ 36 - 45 □ 46 - 55 □ 56 - 65 □ > 65
問卷調查(對煤氣公司意見)
Survey Questionnaire (Personal habits)
1. 請問閣下認為家中以下哪種費用帶給閣下最大負擔?
1. Which of the following utility bill bring you the biggest burden?
□ 電費 □ 煤氣費 □ 水費
□ Electricity bill □ Gas bill □ Water bill
2. 請問閣下會使用哪種方式報標?
2. Which of the following method you or your family use for meter readings
□ 網上報標 □ 專人上門 □ 電話 □ 公司估計
□ Via internet □ Visit of meter readers □ Via telephone □ Estimation
3. 請問閣下家庭的煤氣費每次大約是多少?
3. How much is your family’s gas bill approximately?
□ $0 - $250 □ $251 - $500 □ $501 - $750 □ $751 - $1000 □ > $1000
□ $0 - $250 □ $251 - $500 □ $501 - $750 □ $751 - $1000 □ More than $1000
4. 請問閣下或閣下之家庭會如何繳交煤氣費？
4. How do you or your family usually pay your gas bill?
□ PPS □ 自動轉賬 □ 便利店/超市 □ 郵政局 □ 其他:
□ PPS □ Autopay □ Convenience stores / Supermarkets
□ Post office □ Others:
5. 請問閣下有否使用過煤氣公司的維修/保養服務呢?
5. Have you ever used any maintenance or inspection service from Town Gas?
□ 有 □ 否
□ Yes □ No
6. 請問閣下認為煤氣公司整體上值多少分? (最滿意為 7 分,最不滿意為 1 分)
6. Please rate Town Gas as an overall. (Most satisfied as 7 marks, most dissatisfied as 1 mark)
□ 1 □ 2 □ 3 □ 4 □ 5 □ 6 □ 7
如果分數低於或等於 3 分，請列明原因
Please list your reason if the rating above is lower than 4 marks.
7. 請問閣下對煤氣公司有何印象?
7. What is your impression ofTown Gas?
8. 閣下認為煤氣公司有什麼服務需要改善或可為閣下提供?
8. In your opinion, what improvement or any extra service can Town Gas provide to you?
受訪者資料:
Respondent information:
收入 Income:
□ < $6000 □ $6000 - $10000 □ $10001 - $20000 □ $20001 - $30000
□ $30001 - $40000 □ $40001 - $59999 □ ≥ $60000
年齡 Age:
□ 15 - 25 □ 26 - 35 □ 36 - 45 □ 46 - 55 □ 56 - 65 □ > 65
問卷調查
Survey Questionnaire
你好！ 我們是中文大學專業進修學院專業會計科的學生，現正進行一份有關煤氣公司營運的調查報告，貴
公司提供的資料可幫助我們完成是次的研究。希望貴公司能抽空完成下列問題，謝謝！
Dear Sir or Madam, we are a group of students from School of Continuing and Professional Studies The Chinese University of Hong Kong who study Professional Accounting. And we are conducting an investigation report on Town Gas’s operation. We wish your company could provide us information to assist us finishing our research, by finishing this questionnaire. Thank you for your precious time.
請回答下列各題，在 □ 內加√：
Please answer the following question, and put tick in the boxes.
1. 請問貴公司會用使用下列哪種能源來煮食?
1. Which of the following energy is your company’s cooking method consumed?
□ 煤氣 □ 石油氣 □電 □ 其他 : □多種:
□ Gas □ LPG □ Electricity □ Others : □Multi types:
2. 請問貴公司為什麼會採用該種能源煮食? (可以選擇超過一個答案)
2. What are the reasons of the company using that energy to cook? (You may select more than one answer.)
□ 煮食文化 □ 成本效益 □ 環保 □ 安全 □ 其他: ________
□ Food culture □ Cost-effective □ Eco - friendly □ Safety □ Others: ________
3. 請問貴公司之煮食能源開支大約佔營運成本多少?
3. The cost arises from the energy that is consumed for cooking accounts for what percentage of total operating expenses?
□ < 10% □ 10% - 20% □ 21% - 30% □ 31% - 40% □ 41% - 50% □ > 50%
4. 請問貴公司有興趣轉換更高效能的爐頭嗎？
4. Do you and the company having any interest in replacing your stoves with a more high – effective one?
□ 有 □ 否
□ Yes □ No
5. 請問貴公司認為煤氣公司整體上值多少分? (最滿意為 7 分,最不滿意為 1 分)
5. Please rate Town Gas as an overall. (Most satisfied as 7 marks, most dissatisfied as 1 mark)
□ 1 □ 2 □ 3 □ 4 □ 5 □ 6 □ 7
如果分數低於或等於 3 分，請列明原因
Please list your reason if the rating above is lower than 4 marks.
7. 請問貴公司對煤氣公司有何印象?
7. What are you and your company’s impression of Town Gas?
8. 貴公司認為煤氣公司有什麼服務需要改善或可為閣下提供?
8. In you and your company’s opinion, what improvement or any extra service can Town Gas provide to you?
0
5
10
15
20
Electricity bill Gas bill Water bill
Type of bill
Which of the following utility bill bring you the biggest burden?
< $6000
$6000 - $10000
$10001 - $20000
$20001 - $30000
$30001 - $40000
$40001 - $59999
02468
10121416
Via internet Visit of meterreaders
Via telephone Estimation
methods
Which of the following method you or your family use for meter readings
< $6000
$6000 - $10000
$10001 - $20000
$20001 - $30000
$30001 - $40000
$40001 - $59999
0
5
10
15
20
$0 - $250 $251 -$500
$501 -$750
$751 -$1000
> $1000
How much is your family’s gas bill approximately?
< $6000
$6000 - $10000
$10001 - $20000
$20001 - $30000
$30001 - $40000
$40001 - $59999
02468
10121416
PPS Autopay Conveniencestores /
Supermarkets
Post office
Ways
How do you or your family usually pay your gas bill?
< $6000
$6000 - $10000
$10001 - $20000
$20001 - $30000
$30001 - $40000
$40001 - $59999
0
5
10
15
4 5 6 7
Marks
Please rate Town Gas as an overall. (Most satisfied as 7 marks, most
dissatisfied as 1 mark)
< $6000
$6000 - $10000
$10001 - $20000
$20001 - $30000
$30001 - $40000
$40001 - $59999
0
1
2
3
4
5
Gas LPG Electricity Multi types
Which of the following energy is your company’s cooking method
consumed?
the number of user
0
2
4
6
8
10
12
14
Food culture Cost-effective Eco - friendly Safety
Reasons
What are the reasons of the company using that energy to cook?
Number of users
0
1
2
3
4
5
6
< 10% 10% - 20% 21% - 30%
Percentage
The cost arises from the energy that is consumed for cooking accounts for what percentage of total operating expenses?
Number of users
0
2
4
6
8
Yes No
Do you and the company having any interest in replacing your stoves with
a more high – effective one?
Number of users
0
1
2
3
4
5
6
4 5 6
Marks
Marks of Towngas
Number of users