Zhejiang Expressway Co. Ltd. Class H · HKEX:576
Zhejiang Expressway Co. Ltd. Class H — H1 2023 Earnings Presentation
31 slides from Zhejiang Expressway Co. Ltd. Class H's earnings presentation, 2023
Slide 1: Striving For Excellence – 2023 Interim Results
Striving STOCK CODE: 0576.HK For Excellence 2023 Interim Results 1
Slide 2: Agenda
01 Result Highlights 02 Review of Operations Agenda 03 Outlook & Growth Strategies 04 Reconstruction & Expansion Projects 05 Rights Issue 06 Appendices 2
Slide 3: Result Highlights
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Slide 4: Result Highlights
Result Highlights Results (unaudited) Rmb’000 1H2023 1H2022 %Change Revenue 8,000,657 7,028,121 13.8% - Including: Interest income under effective interest method 1,184,455 1,174,844 0.8% Operating costs (4,535,477) (4,216,527) 7.6% Gross profit 3,465,180 2,811,594 23.2% Securities investment gains
Slide 5: Result Highlights – Revenue
Result Highlights – Revenue Revenue Revenue Breakdown RMB million 18,000 16,263 16,000 14,899 14,000 12,617 12,452 Securities Business 12,000 39.5% 10,000 7,697 8,001 Toll Road Business 8,000 7,028 59.4% 6,061 6,000 4,102 4,000 Other Business 2,000 1.1% 2019（restated）2020（restated） 2021 2022 1H2023
Slide 6: Result Highlights – Net Profit
Result Highlights – Net Profit Net Profit Net Profit Breakdown RMB million 7,000 6,503 6,290 6,000 Securities Business 5,000 30.3% 3,947 4,000 3,374 3,378 3,162 3,000 Toll Road Business 2,146 2,047 56.0% 2,000 1,000 Other Business 520 13.7% - 2019 2020 2021 2022 1H2023 （restated） （restated） Interim
Slide 7: Result Highlights – ROE
Result Highlights – ROE ROE The reasons for low ROE in 2020 % 20.0 18.2 18.0 17.5 17.4 • The outbreak of the COVID-19 pandemic in 2020 and the subsequent toll-free policy for toll roads resulted in 16.0 a substantial reduction in toll revenue and net profit 14.0 attributable to owners of the Company
Slide 8: Review of Operations
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Slide 9: 1H2023 Market Review
1H2023 Market Review Economy • China GDP growth: 5.5% • Zhejiang GDP growth: 6.8%. Zhejiang’s economic recovery has accelerated, a growth rate higher than the national average. 1H2023 Market Review Capital Market • In 2023H1, The domestic economy has stabilized and rebounded, and full implementation
Slide 10: Toll Road Business
Toll Road Business Various factors affected Positive factors: Negative factors: • China’s economic recovery led to a significant y-o-y increase in • Less growth in truck traffic volume compared to that of the overall traffic volume and toll revenue. passenger vehicles due to a sluggish global econom
Slide 11: Toll Road Business – Daily Traffic Volume
Toll Road Business– Daily Traffic Volume Shanghai-Hangzhou-Ningbo Expressway 23.49% Shangsan Expressway 46.58% Average Full-trip Equivalents/day: 86,816 Average Full-trip Equivalents/day: 32,658 115,000 2023 95,000 50,000 2023 75,000 2022 40,000 55,000 30,000 2022 2021 35,000 20,000 2021 15,000 2020
Slide 12: Growth Across the Pandemic
Growth Across the Pandemic Achieved substantial growth compared to 1H2019 before the pandemic Average Shanghai-Hangzhou-Ningbo 1H2023 1H2019 %Change percentage Expressway for 4Y Toll revenue (Rmb’000) 2,356,218 1,997,255 17.97% 4.49% Daily average traffic volume 86,816 60,737 42.94% 10.74% Daily ave
Slide 13: Securities Business
Securities Business (RMB million) 1H2023 1H2022 %Change ZHESHANG SECURITIES CO.,LTD. Commission & fee income 1,976.9 1,738.1 13.7% Interest income 1,184.5 1,174.8 0.8% Securities investment gains 885.9 370.6 139.0% • In 2023H1, with domestic economy’s recovery and full implementation of the registra
Slide 14: Other Business
Other Business Hotel Operations Revenue • Zhejiang Grand Hotel: RMB 19.18 million, an increase of 124.2% y-o-y • Grand New Century Hotel: RMB 40.82 million, an increase of 44.0% y-o-y In 2023H1, contact-intensive service industries such as accommodation and catering, have shown a significant recover
Slide 15: Long-term Investments
Long-term Investments Zhejiang Shaoxing Shengxin Expressway Co., Ltd. 50% Joint Venture • Daily traffic volume: increased 23.15% y-o-y to 29,596 in full-trip equivalents • Toll revenue: RMB 253.16 million, an increase of 9.4% y-o-y 01 Zhejiang HangNing Expressway Co., Ltd. • Net profit: RMB 65.75 mi
Slide 16: Outlook & Growth Strategies
Outlook & Growth Strategies 16
Slide 17: Market Outlook
Market Outlook Macro-economic • Looking ahead to 2023H2, there are still uncertainties and unpredictabilities surrounding global economic development. Domestically, with implementation of various stabilizing policies yielding positive results, it is expected that the Chinese economy will continue to
Slide 18: Growth Strategies
Growth Strategies Direction of development • The Group will adhere to the principle of market-oriented development and pursue high-quality growth, continuously strengthening its core business in expressways and optimizing its securities and financial business. Strengthen securities business • Under
Slide 19: Reconstruction & Expansion Projects
Reconstruction & Expansion Projects 19
Slide 20: Necessity of Reconstruction & Expansion
Necessity of Reconstruction & Expansion • With recovery of economy, there has been a rapid increase in traffic volume. The average daily traffic volume on the Group’s expressways is up to 40,724 Traffic growth in 2023H1, representing an increase of 36.65% compared to 2019H1 on the same basis, which
Slide 21: Proposed Reconstruction & Expansion Projects
Proposed Reconstruction & Expansion Projects ② Ningbo-Jinhua ③ Ningbo-Jinhua HangNing Expressway Shenjiahuhang Suzhou Expressway City Jiaxing ① Shanghai City ① Zhajiasu Expressway Expressway (Jinhua Expressway (Shaoxing City Section) Section) Shanghai- Zhoushan Bay Mileage 25.241km 69.736km 73.32km
Slide 22: Benefits of Reconstruction & Expansion
Benefits of Reconstruction & Expansion ① After reconstruction and expansion, the traffic capacity and mobility Enhance road traffic experience will be significantly improved, which will strengthen the long- capacity term profitability of the Group. ② Extend expressway After reconstruction and expans
Slide 23: Rights Issue
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Slide 24: Rights Issue Approved by EGM & HCM
Rights Issue Approved by EGM & HCM Approved by more than 96% at the HCM on July 24, 2023 Use of Proceeds Amount 1 Reconstruction and expansion projects no more than RMB 5.5 bill. Daily operating expenses such as replenishment 2 no more than RMB 1.0 bill. of liquidity and repayment of borrowings Tota
Slide 25: Rights Issue Key Terms
Rights Issue Key Terms H Shares Rights Issue Key Terms Basis and ◼ The Rights Issue is proposed to be based on the total number of H Shares and Domestic Shares on the Record Subscription Ratio Date, and the allotment will be made to all Qualified H Shareholders and Qualified Domestic Shareholders on
Slide 26: Indicative Rights Issue Timetable
Indicative Rights Issue Timetable Announcement of H Announcement of Completion of Rights Share Rights Issue Rights Issue Issue and listing of Approved by the (including ratio of the Publication of Circular (including Rights newly issued H- shareholders Rights Issue, excluding Issue proposal and shar
Slide 27: Q&A
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Slide 28: Appendices
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Slide 29: Appendix I – Statement of Financial Position
Appendix I – Statement of Financial Position As at As at (RMB million) 12/31/2022 %Change 06/30/2023 Bank balances, clearing settlement fund, deposits and cash 26,628.20 24,191.05 10.1% Financial assets at fair value through profit or loss 40,116.64 43,999.38 -8.8% Total assets 195,641.24 186,405.52
Slide 30: Appendix II – Organization Chart
Appendix II– Organization Chart As of 23 August 2023 Zhejiang Expressway Co., Ltd 0576.HK Shengxin Co Huihang Co Hanghui Co Jinhua Co Zhajiasu Co Zhoushan Co Shangsan Co Shengxin Co Shenjiahuhang HangNing Co 50% Co 100% 51% 100% 55% 51% 73.625% 50% 30% 30% LongLiLiLong Zheshang Securities Yangtze Li
Slide 31: Appendix III – Expressway Map of Zhejiang Province
Appendix III – Expressway Map of Zhejiang Province ① ② ③ 31