2007 annual results announcement. 1 agenda business structure results highlights review of...
TRANSCRIPT
2007Annual Results Announcement
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AgendaAgenda
Business Structure
Results Highlights
Review of Operations
Outlook: Entering the Second Venture with Steady Growth
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Business StructureBusiness Structure
Shanghai-Nanjing Section of G312
100%
Nanjing Section of Nanjing-Lianyungang
Highway
100%
Jiangsu Section of Shanghai-Nanjing
Expressway
100%
Jiangsu Ninghu Investment
Development Co., Ltd.
95%
Jiangsu Sundian Engineering Co., Ltd.
70%
Jiangsu Guangjing Xicheng Expressway
Co., Ltd.
85%
Jiangsu Kuailu Bus Transportation
Co., Ltd.
33.2%
Jiangsu Yangtze Bridge
Co., Ltd.
26.66%
Suzhou Sujiahang Expressway Co., Ltd.
33.33%
* During the reporting period, the Company conducted share transfer and capital increase with Jiangsu Sundian Engineering Co., Ltd. and the relevant share transfer and capital increase agreements took effect on 1 January 2008. During the year, Jiangsu Sundian Engineering Co., Ltd. remained as a subsidiary within the scope of consolidation of the Company's financial statements.
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Results HighlightsResults Highlights
Annual Results Announcement2007
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Major Achievements in 2007Major Achievements in 2007
The 8-lane Shanghai-Nanjing Expressway achieved stable growth, with its traffic volume and toll revenue setting historic highs
Operating measures regarding road operation, financing, project control and management enhancement were effectively implemented, thereby enhancing the Group’s operations across the board
Enhancing service quality and improving the operation tolling system, innovating the on-site management mechanisms so as to maintain a solid operation order
Exploring different financing channels through the issuance of the short-term trust and initiating the corporate bond issue application, with a view to lowering finance costs and enhancing profitability
Rationalizing the Company’s assets and completing the disposal of properties and the transfer of equity interests in subsidiaries
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Financial HighlightsFinancial Highlights
2007(RMB’000)
2006(RMB’000)
Change
(%)For the year ended 31 st December
Revenue, net 5,068,913 3,925,569 29.48%
Profit before taxation 2,450,053 1,762,326 39.02%
Profit attributable to equity holders of the Company
1,642,331 1,174,111 39.88%
Earnings per share (basic)
RMB0.326 RMB0.233 39.88%
Under HKFRS
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Financial Highlights (Cont’d)Financial Highlights (Cont’d)
For the year ended 31st December
RMB ‘000
2,104,904
5,068,913
2,951,996
3,925,569
2,675,814
1,642,331
1,174,111
668,028979,3911,005,773
Revenue (net) and Profit
Net Revenue Net Profit
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Continued economic growth
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Nanjing+15.6%
Zhenjiang+15.5%
Changzhou+15.6%
Wuxi+15.3%
Suzhou+16.0%
China : +11.4%
Strong GDP growth in Jiangsu Province Even stronger growth rates in the 5 cities
Increase inTravels
GDP Growth Rate: 2007
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Major Reasons for GrowthMajor Reasons for Growth
Jiangsu+14.8%
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Major Reasons for Growth (Cont’d)Major Reasons for Growth (Cont’d)
Significant increase in automobile ownership in Jiangsu Province
Automobile ownership : 3.301 million
(+18.91%)
Rapid development of the transportation sector
Passenger transportation : +16.0%
Cargo transportation : +14.9%
Improving expressway network
Total expressway mileage: 3,558 km
(+203km)
Toll road polices remained stable
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Revenue BreakdownRevenue Breakdown
Shanghai-Nanjing Expressway
Shanghai-NanjingSection of G312
Guangjing-XichengExpressway
AuxiliaryServices
Other Operations
1.18%Nangjing-Lianyungang Highway
18.82%
64.26%1.63%
3.34% 10.77%
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Review of OperationsReview of Operations
Annual Results Announcement2007
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Operating Performance ReviewOperating Performance Review
Under HKFRS
Average daily traffic volume (vehicle / day)
Average daily toll revenue (RMB ‘000 /day)
2007 Change (%) 2007 Change (%)
Shanghai-Nanjing Expressway 48,374 22.57 9,348.4 33.05
Shanghai-Nanjing Section of 312 29,184 -7.84 486.2 -12.74
Nanjing Section of Nanjing-Lianyungang Highway
7,361 -47.24 171.5 -39.24
Guangjing Expressway 34,705 -1.52 578.1 -7.47
Xicheng Expressway 35,231 12.06 988.7 8.27
Jiangyin Yangtze Bridge 38,165 2.65 1,919.3 -6.91
Sujiahang Expressway 21,387 14.86 1,628.8 10.01
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The second year since the 8-lane expressway’s full opening, realized a total toll revenue of RMB3.4 billion Daily traffic volume: +22.57% Daily toll revenue: +33.05%
Reasons for increase : Organic growth Lower comparison basis in 2006 Increase of proportion of trucks The assumption of traffic diverted
from Jiangyin Yangtze Bridge
Shanghai-Nanjing ExpresswayShanghai-Nanjing Expressway
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Shanghai-Nanjing Expressway (Cont’d)Shanghai-Nanjing Expressway (Cont’d)
Average daily truck traffic: 33.7% of total traffic +4.55 percentage point YoY
Average daily toll revenue from trucks: 52.93% of total revenue +5.86 percentage point YoY
Traffic VolumeToll Revenue(RMB ‘000/Day)
Average Daily Traffic Volume
(Vehicle/Day)
Passenger Vehicles
(%)
Trucks(%)
Average Daily Toll Volume(RMB’ 000/
Day)
Passenger Vehicles
(%)
Trucks(%)
2007 48,374 66.30 33.70 9,348.4 46.07 52.93
2006 39,46870.8
529.15 7,026.4 52.93 47.07
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Shanghai-Nanjing Section of G312Shanghai-Nanjing Section of G312
Certain truck traffic continued to divert to Shanghai-Nanjing Expressway toll revenue further decreased
Average daily tolled traffic volume:29,184 vehicles (-7.84%)
Average daily toll revenue:RMB486,200 (-12.74%)
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Nanjing Section of Nanjing-Lianyungang HighwayNanjing Section of Nanjing-Lianyungang Highway
Impact of traffic diversions caused by Nanjing-Lianyungang Expressway was at its full extent during the year Average daily traffic volume: -47.24
% Average daily toll revenue: -39.24 %
Nanjing-Lianyungang Expressway caused diversions of primarily passenger vehicles
Decrease in revenue < Decrease in traffic
Toll revenue accounted for only 1.18% of the Group’s total revenue, so the future growth of the Group’s results will not be hindered
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Guangjing Xicheng ExpresswaysGuangjing Xicheng ExpresswaysMaintenance works at Jiangyin Yangtze Bridge and at Jiangyin South Viaduct of Xicheng Expressway truck traffic was prohibited Aug - Sept 2007
affected traffic on Guangjing Expressway and Jiangyin Yangtze Bridge
Certain sections of Xicheng Expressway were affected as well
During the traffic control period, diversions caused a growth in truck traffic proportion and toll revenue on Shanghai-Nanjing Expressway, thereby offsetting the toll revenue losses
Guangjing Expressway
Jiangyin Yangtze Bridge
Xicheng Expressway
For the year end of 31st December
Average daily traffic volume
34,705(-1.52%)
38,165 (-2.65%)
35,231(+12.06%)
Average daily toll revenue
578.1(-7.47%)
1,919.3 (-6.91%)
988.7(+8.27%)
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Sujiahang ExpresswaySujiahang Expressway
Increasing the proportion of trucks, broadening the source of revenue
average daily full-trip traffic: 21,387 vehicles (+14.86%)
average daily toll revenue: RMB 1.63 million (+10.01%)
In April 2008, Sutong Bridge will be open to traffic
facilitate traffic volume
growth for Sujiahang Expressway
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Auxiliary ServicesAuxiliary Services
Revenue growth mainly attributable to customer growth at service areas
Revenue: RMB999,279,000 (+62.80%)
Petroleum product sales: RMB857,142,000 (+70.36%)
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Outlook : Entering the Second Venture with Steady Growth
Outlook : Entering the Second Venture with Steady Growth
Annual Results Announcement2007
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OutlookOutlook
Overall trend of the economy is positive. As a sector highlighted for prioritized development under the Eleventh Five-year Plan, the transportation sector maintains a development edge.
Social automobile ownership will maintain rapid growth, driven by economic development
Income tax rate adjustment in 2008 provides room for profit growth
2008 Operating Environment
The Group’s major toll road and bridge projects are still in the growing stageThe Group’s major toll road and bridge projects are still in the growing stage
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Outlook (Cont’d)Outlook (Cont’d)
2008 Operating Environment (Cont’d)
Bank loan interest rates are expected to be increasing during the rate increase cycle, and the Company’s relatively high gearing will be exposed to rising finance costs.
Ever-improving road networks will lead to re-allocation of overall traffic volume, making potential diversion and competition inevitable.
After the defect liability stage, the newly-constructed road assets will enter the normal maintenance stage, which will gradually increase maintenance costs.
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Outlook (Cont’d)Outlook (Cont’d)
Business operation
Maintaining stable revenue growth to ensure stable returns to shareholders
Improving the internal management system and procedures to raise the standards of regulated and refined management
Road operation
Maintaining good road quality and service standards to ensure safe and smooth traffic on the roads
Financial management
Reducing finance costs and expenses and preventing market interest rate risks
Management enhancement
Business development
Actively seeking market opportunities to timely enhance the Company’s development potential
2008 Strategic Development Objectives
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Outlook (Cont’d)Outlook (Cont’d)
Business operation
Strengthening the effort on toll collection management; brand-building service areas to increase operating revenue of service areas; exercising cost controls and enhance profitability
Improving and enhancing various management systems and procedures by fully implementing the internal control management , so as to enhance the standards of regulated and refined management
Proactively initiating studies on investment in order to seek feasible projects, enhancing the Company’s development potential and searching for new sources of profit growth
Completing the late-stage tasks of the expansion project; reinforcing the management of road operation order; carrying out good road maintenance ; providing good traffic conditions to facilitate rapid growth in traffic volume
Road operation
Actively moving forward the corporate bonds and short-term commercial papers work, arranging a considerable proportion of fixed rate liabilities, so as to reduce finance costs and expenses
Financial management
Managementenhancement
Businessdevelopment
2008 Major Measures
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Thank YouThank You
Annual Results Announcement2007