Zhejiang Expressway Co. Ltd. Class H · HKEX:576
Zhejiang Expressway Co. Ltd. Class H — FY2006 Earnings Presentation
22 slides from Zhejiang Expressway Co. Ltd. Class H's earnings presentation, 2007
Slide 1: 2006 Annual Results Presentation
2006 Annual Results Presentation Enhancing Value through Extending Our Competitiveness.
Slide 2: Agenda
Agenda Review Outlook A Solid 2006 … A Promising Future … Solid Earnings A Favorable Macro Environment Continued Growth A New Asset to Strengthen Our Sustained, Favorable Returns Expressway Network Satisfactory Performance of Strengthening Our Existing Core Business Assets Solid Complementary Income
Slide 3: Review: A Solid 2006
Review: A SaliA L006...
Slide 4: Solid Earnings
Solid Earnings Results (Audited) 2006 2005 % change (RMB ’000) (RMB ’000) For the year ended December 31 Revenue 4,763,780 3,456,385 +37.8 Operating costs (2,076,670) (1,195,428) +73.7 Gross profit 2,687,110 2,260,957 +18.8 Other income 203,952 185,947 +9.7 Administrative expenses (71,022) (62,766)
Slide 5: Continued Growth
Continued Growth CAGR RMB million Revenue : +21.8% EPS – RMB cents 6,000 Net Profit : +16.7% EPS : +16.7% 50 5,000 4,764 40 4,000 38.06 3,456 3,132 32.95 30 3,000 2,472 28.22 2,168 23.23 20 2,000 20.50 1,653 1,431 1,226 1,009 890 10 1,000 0 0 2002 2003 2004 2005 2006 Note: CAGR = Compounded Annual G
Slide 6: Sustained, Favorable Returns
Sustained, Favorable Returns ROE Dividend Payout % RMB cents 16 30 27 Annual 13.90 14 Interim 12.78 25 22 12 11.43 19 9.94 20 10 9.18 15 20 8 15 13 15 6 15 10 11 9 4 5 2 7 7 4 4 4 0 0 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006
Slide 7: Satisfactory Performance of Core Business
Satisfactory Performance of Core Business Shanghai-Hangzhou-Ningbo Expressway Full-trip Daily Traffic Volume 47,500 Traffic volume grew 9.7% yoy, averaging 38,536 full-trip 2007 equivalents per day 42,500 2006 Toll income grew 11.5% yoy, 37,500 totaling RMB2,810.5 million 2005 Traffic volume growth
Slide 8: Satisfactory Performance of Core Business (Cont'd)
Satisfactory Performance of Core Business (Cont’d) Shangsan Expressway Full-trip Daily Traffic Volume 25,000 Traffic volume dropped slightly by 0.2% yoy, averaging 19,783 22,500 2007 full-trip equivalents per day Traffic growth slowed due to: 20,000 2006 ¼ a parallel national road reopened 2005 to t
Slide 9: Solid Complementary Income
Solid Complementary Income Operation of restaurants, shops and gas stations inside service areas, roadside billboard advertising and vehicle servicing along the Group’s expressways A change in mode of operating gas stations led to income increase by 249.5% to reach RMB1,043.4 million Contributing to
Slide 10: Solid Complementary Income (Cont'd)
Solid Complementary Income (Cont’d) Shida Co (50% jointly-controlled entity) ¼ Shida Road: Traffic volume grew 17.3% yoy; toll income grew 16.4% yoy ¼ Profit for the year grew 43.3% to RMB46.7 million Petroleum Co (50% associate company) ¼ Revenue grew 41.3%; Profit for the year attributable to equi
Slide 11: Greater Convenience and Comfort for Customers
Greater Convenience and Comfort for Customers Completion of Widening Project – Phase I & II ¼ Carrying capacity increased ¼ Safer and smoother traffic Launched China UnionPay bankcards ¼ The first such adoption of the bankcards on expressways in China ¼ Cash transactions reduced and operating effici
Slide 12: A Liability Turned into an Asset
A Liability Turned into an Asset Assumed control over the securities company on July 1, 2006 Zheshang Securities (70.46% owned by Shangsan Co.) ¼ 2H results: RMB193.9 million income; RMB121.9 million net profit No intention to change the Group’s principal business
Slide 13: Outlook: A Promising Future
Outlook: A Promising Future …
Slide 14: A Favorable Macro Environment
A Favorable Macro Environment GDP Growth Rate Total Mileage of Expressways in Zhejiang Province 20% km km PRC Zhejiang 5,000 5,000 15% 14.0% 14.3% 13.6% 4,000 12.4% 12.4% 3,500 10.7% 10% 9.5% 9.6% 3,000 9.1% 8.0% 2,383 2,000 5% 1,000 0% 0 2002 2003 2004 2005 2006 1995 2000 2005 2010 2015 2020
Slide 15: A New Asset to Strengthen Our Expressway Network
A New Asset to Strengthen Our Expressway Network The Jinhua Section of the Ningbo-Jinhua Expressway Equity interests acquired: 23.45% Total consideration: RMB281.4 million Concession period: 25 years Expressway: 69.7 km/4 lane Opened to traffic: December 28, 2005
Slide 16: Strengthening our Existing Assets
Strengthening our Existing Assets SHN Expressway Widening Project SHANGHAI Phase I Phase II ¼ Hongken – Guzhu (44km) HANGZHOU ¼ Completed by end-2003 Phase III Phase II Phase I NINGBO ¼ Dajing – Fengjing (95km) ¼ Completed by end-2005 SHANGSAN ¼ Travel condition upgraded and EXPRESSWAY traffic volum
Slide 17: Continuing to Enhance Our Services
Continuing to Enhance Our Services Introducing Automatic Non-stop Toll Booths: ¼ Initiated a trial program at selected toll stations ¼ Service standards will be further upgraded if successful Adding a New Pair of Service Areas: ¼ Target completion: mid-2007 ¼ Added value for customers
Slide 18: Extending Our Competitiveness to Capture Further Growth
Extending Our Competitiveness to Capture Further Growth Continue to search for expressway assets with good potential for acquisitions Maximize income generated from existing assets Grasp further growth opportunities in expressway-related business operations
Slide 19: Appendix I – Balance Sheet
Appendix I – Balance Sheet Balance Sheet (Audited) 2006 2005 % change (RMB million) (RMB million) As at December 31, Cash and bank deposits 4,178 829 +4039.8 Short-term investments 230 612 –62.4 Total assets 19,570 16,312 +20.0 Total liabilities 6,218 3,948 +57.5 Total debt 4,347 2,435 +78.5 Total e
Slide 20: Appendix II – Organization Chart
Appendix II – Organization Chart Zhejiang Expressway Co., Ltd. 99.9995% 51% 73.625% 50% 35% 23.45% Jiaxing Yuhang Shangsan Shida Jiashao Jinhua Co Co Co Co Co Co 50% 51% 70.46% 27.582% Petroleum Development Zheshang JoinHands Co Co Securities Technology 51% 70% 85% 45% Lutong Advertising Services Co
Slide 21: Appendix III – Expressway Map of Zhejiang Province
Appendix III – Expressway Map of Zhejiang Province
Slide 22: 2006 Annual Results Presentation
2006 Annual Results Presentation Enhancing Value through Extending Our Competitiveness.