The Group recorded remarkable operating results for the year. Net profit amounted to RMB133.80 million, representing an increase of 46.4% over the corresponding period of last year.

OVERVIEW

In 2010, the world economy experienced a global trend of slow recovery in which both developed and emerging economies recorded positive growth to some extent. However, there were notable differences in the pace of economic growth of those economies. The world economy is still faced with a number of uncertainties such as trade protectionism, dispute over exchange rates and inflation in emerging economies.

Despite a challenging year, the prudent management, in the clean and renewable energy sector, has led to positive results for Asia Power in FY2009. The Group went from strength to strength and recorded an increase in profit from S$17.3 million to S$17.9 million for the year in review. The increase of approximately 3.3% was mainly due to higher revenue from coal-fired power plant operations. Amidst difficult times, the Group still evinced strong investors’ interest and raised S$9.3 million from the placement of 60 million new ordinary shares in the year.

REVIEW

  1. In 2010, natural disasters including a destructive mudslide in Zhouqu（舟曲）, Gansu province（甘肅）, and the serious drought in Southwest China at the beginning of the year, had posed great pressure on the operations of the Group. Nevertheless, the Group still achieved admirable operating results through enhancing the performance target management of each of its subsidiaries.

  2. During the year, the Group, through the acquisition of additional 52% equity interests in Xi’an Kaixin Enterprise Co. Ltd (“西安凱信實業有限公司”) gained indirect control over two hydro-power plants (namely: Die Bu Ni Ao Jia Ga (“迭部尼傲加尕”) hydropower plant and Zhou Qu Hujiaya (舟曲虎家崖) hydropower plant), thus acquiring an additional 40.9MW of hydro-power installed capacity. This further enhanced the Group’s position in the environmental and renewable energy industries.

  3. During the year, the Group made an investment to establish Asia Power (Hongya) Energy Co., Ltd (“Hongya”) (“亞洲電力 (洪雅) 水電有限公司”) through which the Group intends to acquire Dachanghe power plant (大廠河電站), Huaqiupo power plant (花秋坡電站) and Yangchengjiang power plant (楊城牆電站) which have a total installed capacity of 11MW.

    In 2010, the total installed capacity of hydropower plants under the control of the Group increased significantly compared to the previous year.

  4. During the year, the Group completed the transfer of its 51% equity interests in Heilongjiang Asiapower Xinbao Heating & Power Co., Ltd (“Xinbao or 亞電鑫寶公司”） which generated considerable gains for the Group and further boosts the liquidity for the future development of the Group. Upon completion of the transfer of equity interests in Xinbao all the power plants of the Group comprised of only hydropower plants which will provide continuous and stable revenue and have extremely strong risk resistance capability.

  5. During the year, the Group conducted inspections on the operational safety of each of its power plants, and provided training on operational skills to key staffs of the power plants under the Group, which further improved the operational safety of each of its power plants. The Group also attained the goal of safe and stable operation of each of its power generation companies during the year.

  6. During the year, apart from its efforts in seeking and negotiating a number of environmental and renewable energy projects, the Group also capitalized on the opportunities arising from the regional economic growth in China to proactively evaluate a number of projects in the real estate and non-banking financial sectors, etc.

OUTLOOK FOR 2011

In the first year of the “Twelfth Five-year Plan”, China will inevitably offer more opportunities for the development of enterprises. In 2011, the Group will continue to focus on efficiency management and seek to invest in the environmental protection and renewable energy industries. Meanwhile, in response to China’s intention of developing Hainan Province (where the Company’s PRC management headquarter is based) into an international tourism paradise, the Group will strive to make breakthrough in penetrating into the real estate and non-banking financial, thus bringing more value to our shareholders.

Despite the good prospects for development, we should be aware that the Group has disposed of its equity interests in Xinbao which will have a negative impact on the revenue and profit of the Group going forward. The power plants newly acquired by the Group are currently unable to generate sufficient revenue and profit to make up for the loss of contributions from Xinbao.

REWARDING SHAREHOLDERS

In 2010, the disposal of our equity interests in Xinbao generated significant gains to the Group. After considering the continuous development of the Company as well as the principle of rewarding our shareholders, the Board has proposed a dividend of S$0.009 per share to its shareholders for the year 2010.

APPRECIATION

We are set to steer through the storm and scale new heights. While waving goodbye to the fruitful 2010, we are all heading towards the encouraging 2011. On behalf of the Board, we would like to express our gratitude to our shareholders for their understanding and support, and to the management team and staff of all our group companies and ventures for their dedicated efforts.

2011 will be a year of great challenge for the Group. We believe, however, that under the leadership of the Board, our staff will be fully committed to performing their duties for the society, shareholders and the Board, thus bringing best return to our shareholders, creating a better life for our employees and contributing the greatest value to the society.

Sha Guangwen Tian Aimin
Executive Chairman Executive Director and CEO
   
8 April 2011