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  • What is the progress of the company's research in REITs? Does the company have any plans to issue REITS?

    Public REITS is an important initiative to deepen the reform of China's capital market. For enterprises in the infrastructure segment, it can not only broaden the investment and financing channels and reduce the liability ratio, but also help enterprises to actively try the operation model of separating light and heavy assets, which can promote the revaluation of enterprise assets and rapid development of enterprises. The Company's two core businesses, namely, toll roads and general-environmental protection, are in line with the scope of the application. At present, we have already started the project research of the relevant projects, and closely follow up and study the relevant system rules and regulations as well as the market situation of the issued projects.

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  • How will Shenzhen Expressway and Bay Area Development operate in synergy after Coastal Project is injected into Bay Area Development?

    Shenzhen Expressway uses its own high-quality resources to promote the synergistic development of itself and Bay Area Development. On the one hand, it can achieve operational synergy. At present, Bay Area Development has already owned GS Expressway, and Coastal Project is the second core express channel between Guangzhou and Shenzhen. At present, Bay Area Development already has GS Expressway, and after it the riverside project After Bay Area Development owns these two core channels to Guangzhou, Shenzhen Expressway can make use of rich operation and management experience to coordinate and manage toll roads in Shenzhen region including GS Expressway and Coastal Project, so as to maximize resource pooling, refine management and reduce overall operating costs. On the other hand, it can achieve capital operation synergy. The injection of Coastal Project into Bay Area Development, firstly, is to make Bay Area Development obtain high-quality assets, which is conducive to its bigger and stronger and helps to improve its valuation level; secondly, is to build the overseas investment and financing platform of Shenzhen Expressway Group, broaden its the equity financing channels, seek low-cost financial support for its development, and help the development of its dual core businesses and industrial transformation and upgrading; thirdly, to help Shenzhen Expressway to recover cash for reinvestment and redevelopment. After the acquisition of Bay Area Development, Shenzhen Expressway’s total asset liability ratio in the consolidated financial statements increased from 53% to 58 - 59%, and the debt financing ability was limited to a certain extent. The transfer of the controlling interest in Coastal Project, but the project is still within the scope of the consolidated statements of Shenzhen Expressway. At the same time, Shenzhen Expressway is also able to recover part of the funds from it for other projects, such as the reconstruction and expansion of Jihe Expressway, the construction of Outer Ring Phase III and the investment of general-environmental protection projects, which will help Shenzhen Expressway achieve the objectives of the 14th Five-Year Development Plan and help enhance the market competitiveness of Bay Area Development.

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  • What is the positioning of Shenzhen Expressway and Bay Area Development? As an H-share listed company, will Bay Area Development have a capital operation plan?

    The successful acquisition of Bay Area Development is of great significance to the consolidation and upgrading of Shenzhen Expressway’s main toll road business and its sustainable development in the future. After the acquisition of Bay Area Development, Shenzhen Expressway, as a major shareholder, will support the development of the core business of Bay Area Development in the Guangdong-Hong Kong-Macao Greater Bay Area, including the investment, construction, operation and management of toll roads and land development along the routes. The positioning of the two companies is clear. The strategic positioning of Shenzhen Expressway is "toll road + general-environmental protection", and the development positioning of Bay Area Development is committed to becoming an investment and financing platform in the Guangdong-Hong Kong-Macao Greater Bay Area with full strength centered on the expressway assets and land development along the routes in the area. In the future, the two parties will give full play to their respective advantages and form an overall development pattern of synergistic development in the near term and differentiated development in the long term. The reconstruction and expansion of GS Expressway has been widened from two-way 6 lanes to 10 - 12 lanes, which is an important business for Bay Area Development in the next few years and is being vigorously promoted. In addition, Shenzhen Expressway signed a memorandum with Bay Area Development, which plans to inject Coastal Expressway (Shenzhen Section) into Bay Area Development. Relying on the convenient financing channels in Hong Kong and the support of its major shareholder, Bay Area Development will continue to carry out capital operation, further expand its business scope, and improve its business capacity, as well as bring profit contribution to its shareholder of Shenzhen Expressway.

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  • What is the impact of the recent epidemic on the traffic volume of the Company's toll road projects? Will the Company be able to meet this year's revenue target of RMB12 billion?

    Since the beginning of this year, the epidemic in Shenzhen and neighboring areas has been repeated. In order to better and faster control the epidemic, Shenzhen has pressed the "pause button" for a week. Some areas have implemented temporary traffic control, and the traffic volume has decreased accordingly. According to the current statistics, the impact of the epidemic on the traffic volume of expressways in Shenzhen area of the Group is at the level of 10%-20%. We believe that the unified deployment and implementation of strong measures by the Shenzhen government will help control the impact of the epidemic. With the full recovery of economic activities in Shenzhen, the traffic volume of each road section will return to normal levels. The Group's revenue target of RMB12 billion for 2022 is the result of the Management's reasonable analysis and prudent judgment based on the business environment and operating conditions, and has also taken into account the impact of the epidemic on the Company's operation at the beginning of the year. If the epidemic does not occur on a large scale again during the year, and the Company further expands in the field of general-environmental protection business, its revenue can effectively compensate for the phased impact of the epidemic on the toll road segment, and the Management of the Company is confident to meet the operating target.

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  • What is the progress of the reconstruction and expansion of Jihe Expressway? How much will the traffic volume be affected during the construction period?

    Jihe Expressway is a part of the national highway and an important traffic artery in Shenzhen and even the Greater Bay Area. Its traffic volume has reached the limit and needs to be reconstructed and expanded. The current planning is proposed according to the 8+8 double-layer composite channel scheme and the on-site assembly-type industrialized construction method. The project has been approved by the Development and Reform Commission of Guangdong Province at the end of 2020, and the preliminary design and budget plan of the project have been approved by the MOT. The Company is actively carrying out related work such as construction drawing revision and tendering, and strives to fully start the reconstruction and expansion of Jihe Expressway within this year. The project duration is expected to be 5 years. The model of investment and financing of the reconstruction and expansion of Jihe Expressway is still under negotiation with relevant government departments, and the Company will timely perform the approval process upon confirmation of the model. Due to the tight construction period and the normal operation of the existing two-way 6-lane, the toll revenue will be affected in a certain during the reconstruction and expansion period. The Company will take relevant management measures, and the impact is expected to be controlled.

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