For the director of the board and the president of the company, Mr. Zhao Ping will review the business performance for the interim results of 2021, followed by QA session. May we have the honor to invite Mr. Zhao to review the business performance. Ms. Liu Chenyu will conduct the English interpretation. [Non-English content] Ladies and gentlemen, good afternoon. Welcome to attend the interim result conference call of Huaneng Power International. [Non-English content] The company has announced its interim operating results. In the first half of the year, the company grabs the opportunity of the economic stable recovery and high power demand, and promote key tasks of operation and development. Under China Accounting Standards, the company achieved consolidated operating revenue of CNY 95.116 billion, increasing by 20.17% year-on-year. The net profit attributable to equity holders of the company amounted to CNY 4.282 billion, decreasing by 25.3% year-on-year. The company's earning per share was CNY 0.21. [Non-English content] 207.926 [Non-English content] 20.8%， [Non-English content] 1,980 [Non-English content] 262 [Non-English content] 26 [Non-English content] 22 [Non-English content] 20% [Non-English content] 48.8%。 In the first half of the year, the massive power sales of the Company was 207.926 billion kWh, increased by 20.8%. Average utilization hour was 1,980 hours, increased by 262 hours. The power generation increased significantly due to the rise in the power demand of the whole society. Of the 26 regions in which Company operates, 22 regions have achieved positive year-on-year growth in power generation, among which 10 regions have increased more than 20%. Domestic power sales of the low-carbon clean energy increased by 48.8%. [Non-English content] In terms of the fuel, in the first half of the year, the contradiction between supply and demand intensified and coal prices have risen sharply. The company actively studied and responded to the market trend, make flexible adjustment to our procurement strategy, Increased the honor rate of long-term contract coal, used supplementary supply of imported coal, expanded the high-quality coal sources and ensure the safe and stable supply of steam coal. Although the coal price increased sharply, the company procurement cost is at leading level in the industry. [Non-English content] 19 [Non-English content] 3 [Non-English content] 1.14 [Non-English content] 21.07% [Non-English content] 2.9 [Non-English content] In terms of development, the company accelerates the transformation and upgrading, continues to develop clean energy projects and promote permitting and filing process. In the first half of the year, the company has put 470 MW of wind units, 190 MW of solar energy, and 30 MW of biomass units into operation. The company's total controlling installed capacity reached 114 GW. The low carbon clean units account for 21.07%, increased by 2.9 percentage points. At the same time, the company optimized its thermal power generation by promoting flexibility retrofit, super low emission and heat supply renovation, sludge and biomass coupling generation projects. The company actively promotes technological innovation, construction of smart power plants, transforms and upgrades existing coal-fired power assets, and help build a new power system. [Non-English content] 35 [Non-English content] 78 [Non-English content] 130 [Non-English content] 6 [Non-English content] In terms of financing, in the first half of the year, with the market opportunity of abundant liquidity and the government support in green finance, the company issued China's first batch of carbon neutrality bonds in interbank markets totaling CNY 3.5 billion, corporate bonds of CNY 7.8 billion, And super short-term debt of CNY 13 billion, which ensure the low financial cost and funding needs and help with company's clean energy development. Moreover, the company used $600 million exchange rate swaps to effectively hedge the risk of exchange rate fluctuation in Tuas Power's debt. [Non-English content] In the second half of the year, while seeking progress and maintaining stability, the company will implement innovative, green, safe development and operational excellence. We will adhere to the concept of safe development and strengthen the management and control of key risks area. We will continuously develop clean energy projects and promote energy conservation, transformation and upgrading for coal-fired units under the goal of Carbon Peak and Carbon Neutrality. We will actively participate in the power market reform and be profit-centered, focused on marketing management. We will respond to the coal market trend and take multiple measures to control the coal price and ensure the supply. We will actively participate in the carbon market trading and expand our financing channels to control the financial cost. The company will enhance the competitiveness and create long-term stable and growth return to our shareholders. [Non-English content] My colleague and I are glad to answer your questions. Thank you. [Non-English content] Thank you, Mr. Zhao. Here we come to QA session. [Non-English content] Please press star one if you would like to ask any questions. State your name and your organization before question raise. May I invite first question, please? [Non-English content] 7530 [Non-English content] The first question is from investor whose cell number is 7530. Please go ahead. Thank you. [Non-English content] 2019 [Non-English content] 50 [Non-English content] I have 3 questions. My first question is about the coal inventory. As we all know, in August, the coal price reached a very high level. The price stayed relatively high for both the imported coal and for the seaborne coal. For how many days can the company's inventory of coal be used? My second question is about the carbon trading market. Could you please tell us the numbers of the carbon allowance of the company during the year 2019 to 2020? What is the company's expectation about the current price and also the transaction volume in this year's carbon market? Will there be a fine if some power plants exceeding the carbon allowance? My third question is about renewable development. How does the company consider the renewable projects in the future? Will the company decide it by time period of one year, three years or five years? [Non-English content] 1,061 [Non-English content] 14 [Non-English content] By the end of June, the company had total coal inventory of 10.61 million tons. It can be used in 14 days. Although our inventory is decreasing comparing to the high level, we still can ensure the safety supply of our coal. The company is actively promote other resources to ensure the supply. [Non-English content] As for the company's response to the high coal market, the company have following methods. First is to increase the resource development, ensure the honor rate of long-term contract coal, and optimize our procurement structure. Second is to seize the market chance and give full play of the company's price advantage of imported coal, lock high-quality coal at source. Third method is to use companies and Huaneng Group's industrial chain to ensure the supply. Fourth is to actively respond to government authority and seek for policy support. [Non-English content] In the first half year, we can see the coal supply and demand both growth, but the supply growth is lower than the demand growth. In the second half year, we can see that the ministry policy will be adjusted to be more stable and micro economy is expected to be improved. The power consumption will increase, the hydropower output will decrease due to the dry season, the thermal power demand will increase to fill in the gap. The coal consumption will maintain at a high level, and currently there's still a tight supply with strict safety and environmental inspections. The coal price has attract great attention from the government. The government will take multiple measures to stabilize the price. Under the policy regulation, the price will be stable and decrease with the supply increase in the near future. The actual coal price will still be determined by the policies as well as the demand and supply situation. That's all. Thank you. [Non-English content] Let me answer your question about the carbon trading market. First, about whether the company has a surplus of the carbon allowance. For now, the carbon calculation hasn't been accomplished yet. The government has planned that by the end of September, they will allocate those allowances of carbon. By the end of September, the company can know whether the company has a surplus or less of this carbon allowance. [Non-English content] According to our calculation of the carbon emission, we estimated that as Huaneng as a group, we have surplus in our carbon allowance. For now, the government haven't released the carbon allowance for each company. We'll give out those numbers in the future. [Non-English content] About the carbon price, although the national carbon market average price is higher than the average price of the pilot areas, it doesn't represent that the high price in the carbon market will be the trend in the future. The government have only released the carbon bidding market that we can see from the trading board. The government haven't released the carbon commodity price. It's not been included in our calculation. [Non-English content] We estimate that the government will have a total allowance that be less than the power production company's total emission. There won't be a surplus. We cannot exclude the possibility that the power companies using methods to reduce their carbon emission and turning this less carbon allowance to a surplus. There is still uncertainty in the carbon market demand and supply situation. [Non-English content] About the transaction volume in the future. Although the settlement will be done in the near future, there's still not enough carbon quota that released into the market because the carbon allowance can be settled in the second year. There might be some companies that they won't sell in this year and see the further price change in the market. It's hard to say about the transaction volume. [Non-English content] This is the situation analysis for this year. In general, there's still some uncertainty in the market. Huaneng is in the leading level in the industry, we are confident about the carbon market trading and believe we can profit from this market. [Non-English content] 800 [Non-English content] 5500 [Non-English content] The company is actively promote the renewable energy development. The company plan to add 8 gigawatts per year in the next 5 year during the 14th Five-Year Plan. By the end of 2025, the company plan to increase the capacity of renewable energy by 55 gigawatts. [Non-English content] 2021 [Non-English content] 834 [Non-English content] The company will set each year's goal according to the real situation. In 2021, the company have a goal of 8,314 MW of renewable energy added. 2021 [Non-English content] In 2021, the price of PV module has increased sharply. It has a very limited impact to the company's project that already been through the purchasing process. Some of the company projects is still affected by this increase in price and may be delayed and postponed of the operation date. In general, there won't be a great impact to the company. [Non-English content] [Non-English content] The next question is from [Non-English content] Please go ahead. Thank you。 [Non-English content] 10 [Non-English content] I have three questions. My first question is about the company's profit. Could you please give us the profit breakdown to different energy sources? My second question is about the coal price. What is the company's average standard coal price in the first half of the year? My third question is about the inventory. You just said the inventory for now is 14 days, and what is the number for the same period last year? [Non-English content] 48.22 [Non-English content] 14.68 [Non-English content] 5.98 亿元， [Non-English content] 25.15 [Non-English content] 3.31 [Non-English content] 0.2 [Non-English content] 0.29 [Non-English content] First, I will give you the number about the company's profit breakdown. The total profit of the company was CNY 4.822 billion, and for the coal sector it was CNY 1.468 billion. For the gas sector, it was CNY 598 million. For the wind sector it was CNY 2.515 billion. The solar sector it was CNY 331 million. For the hydro sector it was CNY 20 million, and for the biomass sector it was negative CNY 29 million. [Non-English content] 791.43 The unit fuel cost for the coal-fired units was CNY 791.43/ton. [Non-English content] 821.09 [Non-English content] The standard coal price for the second quarter was CNY 821.01/ton. [Non-English content] 1290 [Non-English content] [Non-English content] 10 years number of coal price will give it later after the meeting. About the inventory, in the same period last year the company have 12.9 million tons of coal inventory and it can use by 17 days. This year we have a decrease in the coal inventory. [Non-English content] 6 [Non-English content] 6 [Non-English content] [Non-English content] 10 [Non-English content] [Non-English content] As for the coal price at the end of June, the company's coal price is in line with the index price from the spot market. [Non-English content] The next question is from [Non-English content] Please go ahead. Thank you。 [Non-English content] Non-English content] I have three questions. My first question is the number you give us before about the profit breakdown. Is that the number of profit before tax or net profit? The second question is about the tariff. What is the company's average tariff for thermal sector and coal sectors? What is the year-over-year change? What is the company's view about for some provincial government, they have raised the benchmark tariff. What is the company's view about the average tariff in the future? My third question is about the imported coal. What is the company's imported coal proportion? What is the price spread between the imported coal to domestic coal? [Non-English content] 59.74 [Non-English content] 22.34 [Non-English content] 7.75 [Non-English content] 27.22 [Non-English content] 3.56 [Non-English content] 0.22 [Non-English content] 0.29 [Non-English content] The previous number we give is the net profit breakdown. If you ask for the profit before tax. In domestic business, we have a total profit before tax of CNY 5.974 billion. For the coal sector, it was CNY 2.234 billion. For the gas sector, it was CNY 775 million. For the wind sector, it was CNY 2.722 million. For the solar sector, it was CNY 356 million. For the hydro sector, it was CNY 22 million. For the biomass sector, it was negative CNY 29 million. [Non-English content] 391.92 [Non-English content] 0.42%。 The average tariff for the thermal power of the company was CNY 391.92 per MWh, increased by 0.42%. [Non-English content] 1903 [Non-English content] 2902 [Non-English content] 30.3% [Non-English content] 31%。 The company have in total purchased imported coal of 29,000,010 in the first half of year. It accounts for 30.3% of the company's total coal procurement. In the second quarter, the company's imported coal accounts for 31% of the company's total coal procurement. [Non-English content] 175.4 [Non-English content] 175 [Non-English content] 333.74 [Non-English content] 30.46 [Non-English content] 59 [Non-English content] 174.9 [Non-English content] 230 [Non-English content] 190.5 [Non-English content] In the first half of the year, the imported coal have a CNY 175.4 per ton discount comparing to the domestic coal. We don't have number in the second quarter, but I'll give you the number in each month. In January, the imported coal has a discount of CNY 333.74 per ton discount. In February, discount was CNY 30.46 per ton. In March, CNY 59 per ton. In April, CNY 174.9 per ton. In May, CNY 230 per ton. In June, CNY 119.5 per ton. [Non-English content] 5500 [Non-English content] 6 [Non-English content] 5500 [Non-English content] 960 [Non-English content] About the coal price at the end of June, because the coal price is very complicated, we have inland coal and seaborne coal that not have the same trend. We use the port price as a representative. The 5500 kcal coal in the port price by the end of June, the price was CNY 960 per ton. That's the end of the question. Thank you. [Non-English content] [Non-English content] Morgan Stanley [Non-English content] Steven [Non-English content] The next question is from Steven of Morgan Stanley. Please go ahead. Thank you. [Non-English content] 50 [Non-English content] 30 [Non-English content] I have three questions. My first question is: What is the reason for the national carbon market's price lower than the pilot market price? The carbon price in the national market was about CNY 50 per ton, comparing to the CNY 30 per ton pilot areas. What is the company's expectation of the carbon price trend during the 14th Five-Year Plan? My second question is about the coal price impact to the impairment. The coal price has increased dramatically, will that be a great impact to the company's impairment decision by the end of the year? My third question is also about the carbon market. The government allowance of the carbon market may be shrank in the future. What is the profit impact to the company? Will the company have any goals or guidelines for the reduce of carbon intensity in the future? [Non-English content] 50 [Non-English content] 50 [Non-English content] About the carbon price higher in National Market than in the pilot market. Actually, the carbon price in National Market is not the highest. The carbon price in the pilot area in Beijing is higher than CNY 50. The carbon market is also relatively high in the pilot area in Shanghai. The CNY 30 per ton price is only the average price of the pilot areas. The price is very difficult to say the future trend because the price is market oriented. [Foreign language] [Non-English content] About the second question and third question, they have some similarities. For the price trend expectation, the core problem of this expectation concerns with the carbon emission price as well as its trading volume. The carbon price are also determined by the relationship between the demand and supply. [Non-English content] From the supply side, supply consists of the carbon quota allocated to each company and also the CCER. [Non-English content] From the supply side, of course, the direct impact is from the carbon emission. There are still other factors that can contribute to the supply. One is for the power consumption. Another is the structural reform and transformation from the power generating side, and also the thermal power proportion in the whole power market. [Non-English content] CCER [Non-English content] There are still other factors that bring uncertainty to this market. First is when will the government restart the trading of CCER? Second is when will other industry be included in this [Foreign language]? Third is when will the financial corporations be included in the market? The market still face great uncertainty. [Non-English content] We can see in the future, there are certain trends in this carbon market. The government will decrease the carbon allowance in the future, especially the free allocation of the carbon quota will be decreased in the future. The allowance that the government charged for fee will increase in the future. The company have awareness of this trend, and the company will take following measures to respond to this market change. First is to make structural adjustment in our power generation. The company will increase the renewable energy capacity as well as the renewable energy generation in the future. Second is the company will actively participate in the market building of the carbon market in the future. That is to actively respond and report to the government to involve ourselves in the policy decision-making process. The company will optimize our structure and reduce our carbon cost in the future. That's all. Thank you. [Non-English content] About the relationship between the coal price fluctuation and the company's impairment decision. The coal price fluctuates in the short to medium term. The company will make impairment decision according to the coal price change in the long term. [Non-English content] In the future, the company will actually follow up with the price change in the coal market and actively study and research for the impairment signs and making appropriate accounting impairment in accordance with the accounting standards. [Non-English content] [Non-English content] CICC [Non-English c ontent] The next question is from [Non-English content] of CICC. Please go ahead, thank you. [Non-English content] 800 [Non-English content] I have two questions all related to renewable energy. The company has announced the 8 gigawatts plan in this year's renewable energy capacity. For wind power and solar power, what will be the proportion of each power sectors? What is the company's project reserve that has already signed the contract? What is the company's project reserve for the project that has already been through the permitting process but hasn't been constructed yet? Huaneng Power International is the offshore wind platform for the group. Could you please tell us the subsidy policy in Jiangsu about the offshore wind power? Is there any policy related with the feed-in tariff? If there is no policy released yet, what will be the company's plan for the whole years of offshore wind capacity? Will the company still going to develop those projects? Will the company postpone those projects construction? My second question is about the capacity reserve revenue for the company. As we know, the renewable energy may have some cost in the capacity reserve subsidy, and the thermal power may have some revenue. What is the net revenue for the company? [Non-English content] 834 [Non-English content] 558.6 [Non-English content] 275.8 [Non-English content] According to the company's plan in the beginning of the year, the company in total have planned 8,340 MW of renewable energy capacity this year. Among those, 5,586 are wind units and 2,758 MW are solar units. [Non-English content] 688.3 [Non-English content] The company had a total renewable energy reserve in the first half of year of 6,880 MW. [Non-English content] 6 [Non-English content] 392 [Non-English content] 116 [Non-English content] By the end of the June, there are 3,920 MW of wind power that's under construction and 1,160 MW of solar power are under construction. [Non-English content] According to our communication with the provincial government in Jiangsu, there's no subsidy guidance of this offshore wind power. [Non-English content] The company will actively follow the result of the feed-in tariff of the offshore wind. The company has communicated with provincial government in Guangdong, Zhejiang, Jiangsu, Guangxi and Fujian about the following construction of offshore wind. The company will make our investment decision according to the subsidy trend in the future, and also the construction cost. The company will make the investment decision according to those factors. [Non-English content] 5.96 [Non-English content] About auxiliary service for the company. In the first half of the year, the company has a net profit from auxiliary services of CNY 596 million, and the number has decreased comparing to the same period last year. That is because the wind and the solar units have expense increase. There is a cap of the auxiliary service revenue in Northeast China. [Foreign language] [Non-English content] I have a follow-up question about the company's investment hurdle rate of renewable energy. Is there any change on the company's guidance of this investment hurdle rate? [Non-English content] 2 [Non-English content] 6.5 [Non-English content] The company will insist on high profitability when investing in the renewable energy. The company's requirement for now is 2 percentage points plus the financial cost. For now the company's investment hurdle rate is about 6.5%-7%. It has a little decrease comparing to the former requirement. [Non-English content] The next question is from [Non-English content] Please go ahead. Thank you. [Non-English content] I have three questions. My first question is about the power consumption estimation. What is the company's estimation of the utilization hour of thermal units? Will the company change the guidance from the beginning of the year? My second question is what is the company's unit fuel cost breakdown to coal units and gas-fired units? My third question is about the cost of construction for wind power. We can see from the market that the cost of construction has decreased for some of the wind units. Is the company experiencing this decrease now? Or is there a time lag between the company's cost of construction comparing to the market price? [Non-English content] 241.65 [Non-English content] 363.10 [Non-English content] About the unit fuel cost, the unit fuel cost for coal-fired units was CNY 241.65 per megawatt hour in the first half of the year, and for the gas-fired units, it was CNY 363.1 per megawatt hour. [Non-English content] 256.66 [Non-English content] 370 [Non-English content] For the number for the second quarter alone, the coal-fired units unit fuel cost was CNY 256.66 per megawatt hour, and the number was CNY 370 per megawatt hour for gas-fired units. [Non-English content] 6% [Non-English content] 8% [Non-English content] 10% [Non-English content] 11% [Non-English content] I'll answer the question about the power generation expectation. The association have changed the power consumption expectation for several times. In the beginning of the year, the expectation was about 6%-7% increase for the whole year. They changed the expectation in the first quarter to 7%-8% growth rate. Currently, they change it again to 10%-11%. [Non-English content] 2021 [Non-English content] 4,450 [Non-English content] The company has actively studied and judged the market trend. According to the expectation from the society and the association, the company has changed the power generation guidance from the beginning of the year. For now, the company's guidance for the power generation in 2021 is 445 billion kilowatt-hour. [Non-English content] [Non-English content] 10.6% [Non-English content] The power generation growth rate will be at 10.6%. It will be in line with the whole country's power growth. [Non-English content] 3900 [Non-English content] 150 [Non-English content] 4050 [Non-English content] 200 [Non-English content] About the utilization hour, the total utilization hour for the company will be at 3,900 hours, increased by 150 hours comparing to the same period last year. About thermal utilization hour, it will be 450 hours, increasing by 200 hours comparing to the same period last year. [Non-English content] [Non-English content] 2300 [Non-English content] 2400 [Non-English content] 1.8 [Non-English content] 6000 -English content] 7000 [Non-English content] 3900 [Non-English content] About the cost of construction of renewable energy, because we signed an internal agreement with our key suppliers, we have not very sensitive impact from the market price. For the unit of 3 MW, the cost of construction was about CNY 2,300-CNY 2,040. For the solar power, the cost was about CNY 1.8 per W. In general, our cost of construction for wind project is CNY 6,000-CNY 7,000 per kW, for the solar power it was CNY 3,900-CNY 4,100. The cost will various according to different situation in the specific project. [Non-English content] [Non-English content] The next question is from [Non-English content] Please go ahead。Thank you。 [Non-English content] I have two questions. The first question is about renewable energy subsidies. What is the company's renewable energy subsidy collectible for now? The second question is about the thermal power emission reduction method. What was the company's cost of those methods using to reduce the emission of thermal power? [Non-English content] 30.93 [Non-English content] 1.02 [Non-English content] 118.83 [Non-English content] In the first half of year, the subsidy for the renewable energy increased CNY 3.093 billion. The company have collected CNY 10.1 million subsidy in the first half of year. There are still CNY 11.883 billion subsidy that remain to be collect in the future. [Non-English content] 191 [Non-English content] 170 [Non-English content] About the company's cash flow situation, the company has an operating cash inflow of CNY 191 billion and the outflow of operating cash flow was CNY 17 billion. The company has a net cash inflow in the first half of the year. [Non-English content] I'll answer the question about the decarbonization of the company. From the technical point of view, the company firmly promotes the transformation to green energy, and the company increases the proportion of renewable energy. [Non-English content] At the same time, the company make full use of our professional technological knowledge background and to promote transformation renovation for the existing coal-fired thermal units. [Non-English content] The company has making efforts to decrease the carbon emissions by the following method. First is to increase the power utilization and decrease the power consumption. [Non-English content] Second is to promote flexibility retrofit to the existing thermal units and respond to ensure the safety of the grid in the whole. [Non-English content] The third method is to promote the renovation of heat supply. [Non-English content] The fourth method is to actively promote the biomass coupling with the thermal units. [Non-English content] The company is making efforts in those areas to increase the technological renovation and seek for the carbon intensity decrease for our thermal units. [Non-English content] As we announced in the first quarter, in the 14th Five-Year Plan period, the company strives for a five-gram decrease in our coal consumption for power production. [Non-English content] About five grams decrease. [Foreign language] [Non-English content] 5 [Non-English content] 5 [Non-English content] 5 [Non-English content] About the 5 gram decrease, is that only for the coal-fired units? During the 14th 5-Year, what will be the company's cost to achieve this goal? [Non-English content] 2021 [Non-English content] 69 [Non-English content] The 5 grams decrease is for the coal-fired units. During the 14th Five-Year Plan, the company will maintain a stable investment in the renovation and technological upgrade. The capital expenditure for those areas will be at CNY 6.9 billion for each year. [Non-English content] [Non-English content] [Non-English content] Due to time constraints, we invite the last investor to ask questions. Sir, the last question is from [Non-English content] of [Non-English content] Please go ahead. Thank you。 [Non-English content] 3031 [Non-English content] 418.81 [Non-English content] 61% [Non-English content] 391.92 [Non-English content] I have two questions. My first question is about fixed assets. The company has total fixed assets of CNY 303.1 billion. For the coal-fired units, account for what proportion of those fixed assets? My second question about the tariff of the market-based power sales. The company's average tariff was for CNY 18 per megawatt hour, and the market-based volume accounts for about 61%. The average market-based volume tariff for the coal-fired units was CNY 371.92 per megawatt hour. What's the market-based volume tariff for the wind power?