Chief Financial Officer / China
Choices made while the funding alternatives were still open
- Connected floor area
- 18.4m m²
- End of the 2025–26 heating season
- Company revenue
- RMB562m
- Calendar 2025
- Finance colleagues
- 29
- Treasury, control and operating finance
Decisions & consequences
01Funding winter without borrowing against an optimistic collection date
In September 2021, our pre-season forecast included RMB38 million of customer balances expected before a large heat-supply payment. Customer operations advised that RMB16 million of the total involved account queries or disputed charges. The commercial forecast still placed the entire amount in the same collection month. The general manager wanted to avoid borrowing costs if the team could bring receipts forward, while the heat supplier required confirmation of our payment schedule.
I asked for a case-based review of the disputed amount and kept the remaining RMB22 million separate. Treasury prepared a funding plan that did not depend on the queried balances arriving before the supplier deadline. We arranged an RMB18 million short-term draw within an existing facility, subject to its agreed terms, and delayed an optional office refurbishment. The customer team continued resolving accounts through its established process; I did not make payment a condition for investigating a service complaint.
The draw remained outstanding for four months and incurred approximately RMB240,000 of interest. By repayment, RMB11 million of the queried balances had been received following resolution, while RMB5 million remained open or required further assessment. Other operating receipts also contributed to repayment. I would not attribute the entire improvement to the review or describe the borrowing cost as a failure: it paid for a more dependable funding position at a specific point in the season.
The choice reduced the risk of missing the agreed supplier payment but gave up the lowest-cost forecast presented at the outset. It also disappointed colleagues waiting for better office space. In the next planning cycle, I brought the account review forward so that the board could see the funding alternatives before the supplier commitment became urgent. The lesson was to distinguish a collection ambition from evidence that money would arrive on the required date.
Giving an existing network priority over the whole expansion map
The 2023 summer programme combined RMB74 million of network renewal with an RMB96 million extension serving a new development area. The extension assumed that most buildings would be occupied in time for the next heating season. Technical management also identified limited contractor capacity across the two programmes. The development team argued that postponing any connection work would weaken relationships with the area's promoters and reduce the receipts expected in the following year.
I asked the team to compare a complete extension with a smaller first stage that could be delivered without displacing the priority renewal works. Engineers defined the technically coherent stage; finance tested its cash requirements against the available funding and the revised occupancy evidence. We did not assume that every connected building would immediately produce a full season's receipts. The alternative required more coordination and did not offer the same visual impression of completing the entire area at once.
The board retained the RMB74 million renewal programme and approved RMB41 million for the first extension stage. The remaining RMB55 million was deferred for a later decision, rather than recorded as a permanent saving. Expected first-season connection-related receipts fell by RMB12 million against the original plan. The development team had to explain a revised sequence to counterparties, and some future work would need a separate mobilisation.
The approved first stage and the priority renewal works were completed before the season under the technical team's acceptance process. The later extension remained conditional on occupancy and funding evidence. I regard the result as a more credible commitment, not a claim that finance delivered the construction or eliminated future expenditure. I would have asked for the staged option earlier, before the full extension became the reference against which every alternative looked like a retreat.
Keeping a favourable heat-cost trial from becoming an unsupported saving
A 2024 controls trial covered fourteen heat-exchange stations. The first comparison showed purchased heat per connected square metre approximately 7 per cent below the previous season. The project sponsor proposed using that result to support an RMB32 million wider installation. However, the trial period was milder, several buildings had different occupancy and the comparison did not isolate the effect of the new controls. Technical colleagues cautioned that the result needed a more careful interpretation.
I supported retaining the actual purchase-cost movement in the report while removing the claim that the equipment had caused the entire reduction. We asked the technical team to define a comparison that accounted for relevant conditions and identify what additional observation would be useful. Finance then prepared a smaller next-stage proposal that included the cost of collecting and checking the evidence. I did not devise a weather adjustment myself or treat an accounting calculation as an engineering test.
The board approved RMB4.8 million for a limited second stage and monitoring, leaving the wider installation unapproved. The sponsor lost the opportunity to roll out the system quickly across the network. We also accepted another season of operating different arrangements, with the associated training and support effort. After the next winter, the technical review supported a more modest range of improvement at suitable stations, with some sites still requiring investigation. It did not establish a single saving applicable to every station.
My contribution was to keep the investment decision proportional to the evidence available. The RMB27.2 million difference between the two proposals was deferred expenditure, not a realised efficiency benefit. A staged decision can still be costly if it postpones useful equipment; that possibility belonged in the board paper alongside the risk of scaling an unreliable assumption. I would repeat the requirement for a defensible comparison, while involving the technical reviewers before the first trial report was drafted.