In 2010, economic growth of China remained strong and power demand grew rapidly. National electricity consumption for the year amounted to 4.19 trillion KWh, representing an increase of 14.56% as compared to the previous year. The rapid growth of economy resulted in the significant increase in the demand of coal, driving the coal price to rise again.

2010 was the first complete accounting year for Wu Ling Power to be consolidated into the Group. Wu Ling Power is primarily engaging in hydro-power development, generation and supply in Hunan and Guizhou. Benefitting from the favourable government policies, hydro-power enjoys apparent competitive advantages and strong profitability with high growth potential. The asset structure of the Group has been further optimized with the additional hydro-power assets. Risks associated to coal-fired business were reduced and pressure of rising costs of fuel used in coal-fired power was relieved by a more balanced and beneficial fuel mix. The Group recorded a strong growth in sales volume of power and profit, and achieved significant improvement in profitability as compared to 2009. Wu Ling Power contributed satisfactory results to the Group and its net profit amounted to approximately RMB591,117,000, accounting for 68.24% of the net profit of the Group. Fully leveraging on the strategic advantages of "balanced hydro and coal-fired generation", the business operation of the Company show a diversity among the industry.

In 2010, turnover of the Group was approximately RMB14,436,659,000, representing an increase of approximately 32.00% as compared to the previous year. Profit attributable to equity holders of the Company was approximately RMB666,892,000, representing an increase of approximately RMB147,884,000 as compared to the previous year. The basic earnings per share was approximately RMB0.13.

In 2010, the net profit of the Group amounted to approximately RMB866,255,000, representing an increase of approximately RMB314,645,000 as compared with the previous year. Among which, the net profit of hydro power amounted to approximately RMB591,117,000 while the net profit of coal-fired power amounted to approximately RMB275,138,000, representing a ratio of 2.15 to 1. Hydro power contributed strong and stable stream of profit for the Group, while coalfired power continued to contribute positive earnings as a whole.

The net profit increased as compared to 2009 mainly due to the following factors:

• 2010 was the first complete accounting year for Wu Ling Power to be consolidated into the Group. The hydro power business contributed a net profit of approximately RMB591,117,000 to the Group;
• Effects of price adjustment of coal-fired power carried out in November 2009 became apparent in this year, and benefited by the structure of electricity price, the average price of coal-fired power increased by 3.66% as compared to the previous year and contributed an increase of approximately RMB408,227,000 to the Group;
• Sales volume of coal-fired power grew steadily in 2010 and increased by 1,825,719MWh as compared to the previous year, contributing an increase of approximately RMB187,808,000 to the Group.