Shenzhen Expressway Announces 2017 First Quarterly Results

Net Profit Amounts to RMB349 million, Representing a YOY Growth of 38.5%

(Hong Kong, 26 April 2017) Shenzhen Expressway Company Limited (“Shenzhen Expressway ", or the “Group”; Stock Code: 00548) is pleased to announce the first quarterly results (unaudited) of the Group for 2017 (the “Reporting Period”). The report indicates that the Group recorded revenue of RMB1,031 million, representing a YOY growth of 3.4%. Among which, it recorded toll revenue of RMB941 million, representing a YOY growth of 5.3%. The Group recorded net profit of RMB349 million and earnings per share of RMB0.16, representing a YOY increase of 38.5%.

In the first quarter of 2017, the Group recorded a YOY increase in operating revenue of 3.37%. Excluding the effect of de-consolidating the Consultant Company from the Group’s financial statements, the Group’s operating revenue grew by 10.90% as compared with the corresponding period of last year, mainly due to the growth of toll revenue of toll highways subordinated to the Group and recognition of real estate development revenue from Guilong Development Project. The Group recorded a YOY growth in net profit of 38.5%, mainly due to the growth of toll revenue of toll highways operated and invested by the Group, recognition of investment income from Bank of Guizhou, as well as the increase of the share of net profit of JEL Company after acquiring its further 45% equity interest.

The Group recorded a YOY decrease in cost of services of 2.31%. Excluding the impact of changes of consolidation scope, the cost of services increased by 13.70% as compared with the corresponding period of last year, mainly due to the growth of depreciation and amortization costs and the carry-forward of real estate development cost of Guilong Development Project.

During the Reporting Period, the Group was in a strong financial position. Debt-asset ratio of the Group at the end of the Reporting Period is 53.9%.The composite borrowing cost is 4.79%, representing a YOY decrease of 0.33 percentage point as compared with the corresponding period of last year. The Group recorded a YOY decrease in financial expenses of 4.5%.

During the Reporting Period, the Group entered into the Equity Transfer Agreement with Shenzhen Pingan Innovation Capital Investment Company Limited to purchase 100% equity interest of Yichang Company held by the latter at a consideration of RMB1.27 billion, which helped the Group to expand its toll road asset scale, and further strengthen its core advantages in the investment, management and operation of the highways. The Group also participated in the registration and competitive negotiations on the project of 50% capital increase of Shenzhen Water Planning and Designing Institute Co., Ltd (“Water Planning Institute”), and the Group was confirmed as the final A Class investor, who held 15% of the equity interest in the capital increase of the Water Planning Institute. The success of the bid marking the Group has taken a solid step towards the transformation of the environmental protection industry. Through the investment, the Group accessed the field of water environmental management with high starting point, and thereby to replenish its professional technical resources in the field of water environmental protection and urban water industry, expand the market pipeline, and achieve complementary advantages of industry chain with related partners, in order to help the Group quickly enhance the market competitiveness of water environment management. With the deepening of industrial development, implementation of environmental protection projects, expanding of assets scale, the environmental protection industry which act as the second main industry of the Group will play more and more important role in sustainable development, core competitiveness cultivation, the Group’s performance and other aspects.

The management mentioned that in addition to consolidating and upgrading the main business of toll highway industry, the Group will forge ahead towards the new environmental protection industry that mainly concerns about water environment management and solid waste treatment. With the deepening of the reform in the investment and financing system of infrastructure and public utilities, the Group will have more business opportunities. The Group will proactively focus on policies of the State, meet market demands, leverage the existing competitive resources and core competitive advantages to give full play to the innovation capability in the investment and financing field and in business model. Relying on the capability of resource integration, the Group will eventually realize long-term healthy development and create more value for shareholders.