Financial Performance - Operating revenue for Q3 2022 was RMB 2.42 billion, an increase of 5.45% compared to RMB 2.41 billion in Q3 2021[6] - Net profit attributable to shareholders for Q3 2022 was RMB 716.68 million, a significant increase of 62.46% from RMB 708.36 million in Q3 2021[6] - Basic earnings per share for Q3 2022 rose by 66.78% to RMB 0.307 from RMB 0.303 in Q3 2021[7] - Total operating revenue for the first nine months of 2022 reached RMB 6,646,320,880.31, a slight increase from RMB 6,639,420,774.92 in the same period of 2021[24] - Operating profit for the first nine months of 2022 was RMB 2,523,926,856.20, compared to RMB 2,512,432,877.06 in the previous year, indicating a stable performance[24] - Net profit attributable to shareholders of the parent company was RMB 2,012,856,197.18, up from RMB 1,925,284,133.25 in the same period last year, reflecting a growth of approximately 4.5%[25] - Basic and diluted earnings per share for the first nine months of 2022 were both RMB 0.859, compared to RMB 0.819 in the same period of 2021, showing an increase of 4.9%[25] - The total comprehensive income attributable to shareholders of the parent company was RMB 1,067,425,878.93, down from RMB 2,217,618,067.71 in the same period last year, reflecting market fluctuations[25] - The company reported a significant increase in financial expenses, totaling RMB 1,122,762,658.29, compared to RMB 722,953,292.23 in the previous year, which may impact future profitability[24] Assets and Liabilities - Total assets as of September 30, 2022, were RMB 69.95 billion, a decrease of 3.25% from RMB 72.30 billion as of December 31, 2021[4] - Net assets attributable to shareholders of the listed company decreased by 13.56% to RMB 22.10 billion from RMB 25.56 billion[4] - Total liabilities increased to RMB 42,473,497,058.48 from RMB 40,772,361,268.89, reflecting a growth of about 4.2%[23] - The company's total equity decreased to RMB 27,478,449,722.47 from RMB 31,532,573,897.70, representing a decrease of about 12.8%[23] - As of September 30, 2022, total current assets decreased to RMB 9,893,635,724.02 from RMB 11,282,262,306.50 as of December 31, 2021, representing a decline of approximately 17.5%[22] - The company's cash and cash equivalents decreased to RMB 4,965,383,934.19 from RMB 5,948,688,887.14, a reduction of approximately 16.5%[22] - Long-term receivables increased significantly to RMB 2,143,500,277.19 from RMB 1,116,297,854.71, marking an increase of about 92.0%[22] - The total non-current assets decreased slightly to RMB 60,058,311,056.93 from RMB 61,022,672,860.09, a decline of approximately 1.6%[22] - Inventory increased to RMB 1,486,408,931.62 from RMB 1,338,820,859.08, reflecting an increase of approximately 11.0%[22] - The total amount of contract liabilities decreased to RMB 166,076,853.82 from RMB 219,246,400.33, a decline of approximately 24.2%[23] Cash Flow - Cash flow from operating activities for the first nine months of 2022 was RMB 2.58 billion, a slight decrease of 4.52% from RMB 2.66 billion in the same period of 2021[5] - Cash flow from operating activities generated RMB 2,587,314,668.15, an increase from RMB 2,475,319,558.21 in the previous year, indicating improved operational efficiency[26] - Cash flow from investing activities showed a net outflow of RMB 2,554,941,491.53, compared to a net outflow of RMB 1,880,243,418.44 in the same period last year, highlighting increased investment activities[26] - Cash flow from financing activities resulted in a net outflow of RMB 1,106,442,440.92, contrasting with a net inflow of RMB 910,620,038.91 in the previous year, indicating changes in financing strategies[26] - The company's cash and cash equivalents at the end of the period were RMB 4,481,323,832.32, down from RMB 5,078,125,172.60 at the end of the previous year, indicating a decrease in liquidity[26] Shareholder Information - The total number of shareholders is 18,907, with 18,661 A-share shareholders and 246 H-share shareholders[12] - The top three shareholders hold significant stakes: HKSCC NOMINEES LIMITED at 33.47% (729,988,042 shares), Xintong Industrial Development (Shenzhen) Co., Ltd. at 30.03% (654,780,000 shares), and Shenzhen Shengan Highway Development Co., Ltd. at 18.87% (411,459,887 shares)[12] Project and Investment Activities - The company acquired a 10% stake in Nanjing Sanqiao, increasing its ownership from 25% to 35%, with the transaction valued at approximately RMB 175 million[15] - The total operating revenue from organic waste treatment projects for the first three quarters of 2022 was RMB 117.22 million, with a total treatment volume of 241.62 thousand tons[16] - The Guizhou project of the organic waste treatment had a treatment volume of 28.77 thousand tons and generated operating revenue of RMB 21.44 million from July to September 2022[16] - The company has a 40% stake in the Shuiguan Extension project, which reported daily toll revenue of RMB 205,000 for the period of July to September 2022[14] - The average daily toll revenue for the Guangzhou West Second Ring was RMB 1.31 million, with a 25% ownership stake[14] - The company’s total revenue from the organic waste treatment projects in the first nine months of 2022 was RMB 318.50 million, reflecting a significant operational scale[16] - The average daily toll revenue for the Guangshen Expressway was RMB 7.32 million, with a 45% ownership stake[14] - The company reported a total revenue of RMB 177,404.30 thousand for the Baotou South Wind project in Q3 2022, with a total of 515,129.97 thousand for the first nine months of 2022[18] - Xinjiang Mulei project generated RMB 222,253.60 thousand in revenue for Q3 2022, totaling RMB 632,157.80 thousand for the first nine months of 2022[18] - The company signed a PPP contract for the Jihe Expressway expansion project with a total investment of approximately RMB 43.29 billion, with a construction subsidy of RMB 15 billion from the Shenzhen government[20] - The company plans to invest approximately RMB 12.65 billion annually based on performance evaluations for the operational phase of the Jihe Expressway project[20] Capital Management - The company completed a capital reduction process in the reporting period, impacting previous year's capital surplus[9] - The company issued RMB 4 billion perpetual bonds in 2020, affecting the calculation of earnings per share and return on net assets[8] - The company completed a capital reduction of RMB 3.8 billion for the Yangjiang company, reducing its registered capital from RMB 6.6 billion to RMB 2.8 billion[19] - The company and Vanke Group hold 34.3% and 65.7% stakes in United Land, respectively, and have decided to reduce capital by RMB 3.3 billion to improve capital efficiency[19] - The company issued short-term financing bonds totaling RMB 5 billion with a maturity of 270 days and an interest rate of 1.72%[20] - The company has invested RMB 5.09 billion in wealth management products, with an expected return of RMB 2,237.287 thousand during the reporting period[21]

Financial Performance - The company reported a revenue of 1.5 billion RMB for the first half of 2022, representing a year-on-year increase of 10%[6]. - The company's operating revenue for the first half of 2022 was approximately RMB 4.09 billion, a decrease of 2.96% compared to RMB 4.22 billion in the same period of 2021[67]. - Net profit attributable to shareholders for the first half of 2022 was approximately RMB 848.55 million, down 29.79% from RMB 1.21 billion in the previous year[67]. - The company achieved a total revenue of approximately RMB 4.094 billion in the first half of 2022, representing a year-on-year decrease of about 2.96%[91]. - The company reported a net profit attributable to shareholders of RMB 848,549 thousand for the first half of 2022, a decrease of 29.79% compared to RMB 1,208,604 thousand in the same period of 2021[126]. - Operating revenue for the first half of 2022 was RMB 4,094,094 thousand, down 2.96% from RMB 4,219,156 thousand in the previous year[127]. - The overall gross margin for toll road operations was 47.70%, down 2.42 percentage points year-on-year, due to reduced toll income while operational costs remained stable[136]. User Engagement and Market Expansion - User data showed an increase in active users by 15% compared to the same period last year, reaching 2 million active users[6]. - The company expects a revenue growth of 12% for the second half of 2022, driven by new product launches and market expansion strategies[6]. - The company plans to expand its market presence in Southeast Asia, targeting a 25% increase in market share by the end of 2023[6]. - The company has launched a new digital platform aimed at improving user engagement, with initial feedback indicating a 30% increase in user satisfaction[6]. Investment and Development - Investment in new technology development increased by 20% in the first half of 2022, focusing on smart transportation solutions[6]. - A strategic acquisition of a local competitor is anticipated to be completed by Q4 2022, expected to enhance operational efficiency[6]. - The company is involved in various infrastructure projects, including the construction of the Qinglian Expressway, which connects Qingyuan to Lianzhou[29]. - The company has invested in 17 highway projects, with a total mileage of approximately 712 kilometers, of which 5.7 kilometers are still under construction[67]. - The company is actively engaged in the planning and design of the third phase of the Outer Ring Expressway, which is approximately 16.8 kilometers long[29]. Financial Management and Strategy - The company has set a target to achieve a net profit margin of 15% by the end of 2022, up from 12% in the previous year[6]. - The company has maintained a high credit rating and established good relationships with financial institutions, ensuring smooth financing channels for development[90]. - The company is focusing on innovation in business models, including government procurement of toll road services and PPP cooperation for new projects, to meet both government and commercial objectives[90]. - The company plans to utilize self-funding and bank loans to meet capital expenditure needs[161]. Environmental and Infrastructure Initiatives - The company is actively expanding its operations in the environmental sector, with a focus on solid waste resource processing and clean energy projects[75]. - The company is involved in the construction of the Deep-Shan Ecological Environment Technology Industrial Park, which includes infrastructure and supporting projects[29]. - The company is focused on expanding its logistics capabilities to align with the national "14th Five-Year" transportation plan, aiming for a modern comprehensive transportation system by 2035[58][59]. - The company is exploring new business models in the toll road industry, including professional road maintenance services to enhance operational efficiency[80]. Challenges and Economic Outlook - Future outlook remains positive, with management confident in achieving the annual revenue target of 3 billion RMB for 2022[6]. - In the first half of 2022, China's GDP reached 56.26 trillion yuan, with a year-on-year growth of 2.5%, indicating a challenging economic environment but a potential stabilization in the second half of the year[79]. - The overall toll revenue from the group's toll road projects decreased year-on-year due to the adverse impact of the domestic pandemic and government control measures, which reduced logistics and public transport demand[95]. Acquisitions and Partnerships - The group completed the acquisition of Bay Area Development, indirectly holding interests in Guangshen Expressway and Xixian Expressway, further consolidating its toll road asset scale[81]. - The company completed the acquisition of 100% equity in Shenzhen Investment Control Infrastructure, indirectly holding approximately 71.83% of Bay Area Development, which includes profit-sharing rights for the Xixian Expressway and Guangshen Expressway[94]. - The company has acquired subsidiaries through business combinations under common control, including Shenzhen Investment Control Infrastructure, and through business combinations not under common control, including Lise Environmental Protection[179]. Financial Position and Liabilities - As of June 30, 2022, the company's total assets were approximately RMB 72.21 billion, a slight decrease of 0.14% from RMB 72.30 billion at the end of 2021[67]. - The group's interest-bearing liabilities increased by approximately 9.23% to CNY 33,216,533 thousand as of June 30, 2022, compared to CNY 30,409,335 thousand at the end of 2021, primarily due to payments for equity acquisitions[150]. - The company's debt-to-asset ratio increased to 60.94% from 56.39% year-over-year[158]. - The company has pledged assets totaling approximately 19.39 billion CNY for a fixed asset loan with China Industrial and Commercial Bank[154]. Operational Efficiency and Cost Management - Operating expenses were reduced by 5% due to improved cost management strategies implemented in early 2022[6]. - The company reported a decrease in operating costs to RMB 2,501,187 thousand, an increase of 4.69% from RMB 2,389,157 thousand in the previous year[127]. - The company aims to enhance operational management and risk control of Lande Environmental to improve its profitability[107]. Research and Development - The company has established a digital technology company with a 51% stake, focusing on digitalization in transportation infrastructure and clean energy[125]. - The company reported an increase in R&D expenditures, reflecting a focus on new product and technology development[153].

[Definitions](index=5&type=section&id=%E9%87%8A%E4%B9%89) [Company Profile and Key Financial Indicators](index=10&type=section&id=%E7%AC%AC%E4%BA%8C%E8%8A%82%20%E5%85%AC%E5%8F%B8%E7%AE%80%E4%BB%8B%E5%92%8C%E4%B8%BB%E8%A6%81%E8%B4%A2%E5%8A%A1%E6%8C%87%E6%A0%87) [Company Basic Information](index=10&type=section&id=%E5%85%AC%E5%8F%B8%E5%9F%BA%E6%9C%AC%E4%BF%A1%E6%81%AF) Shenzhen Expressway Company Limited (SZEC) is a Shenzhen-registered joint-stock company, with its A-shares and H-shares listed on the Shanghai Stock Exchange and Hong Kong Stock Exchange respectively Company Stock Overview | Stock Type | Listing Exchange | Stock Abbreviation | Stock Code | | :--- | :--- | :--- | :--- | | A-shares | Shanghai Stock Exchange | Shenzhen Expressway | 600548 | | H-shares | The Stock Exchange of Hong Kong Limited | Shenzhen Expressway Company Limited | 00548 | [Main Business and Corporate Structure](index=11&type=section&id=%E4%B8%BB%E8%90%A5%E4%B8%9A%E5%8A%A1%E4%B8%8E%E5%85%AC%E5%8F%B8%E6%9E%B6%E6%9E%84) The company's core businesses include toll roads and environmental protection, covering investment, construction, operation, and management, alongside extended services like construction and operation management - The company's main businesses are investment, construction, and operation management of toll roads and major environmental protection businesses (solid waste resource utilization, clean energy)[23](index=23&type=chunk) - As of the reporting date, the Group operates and invests in **17 highway projects**, with an attributable mileage of approximately **712 km**; it also invests in **16 environmental, clean energy, and financial projects**[23](index=23&type=chunk) - The company's largest shareholder is **Xintongchan Company** (holding approximately **30.03%** of shares), with **Shenzhen International** as the indirect controlling shareholder (indirectly holding over **50%**)[23](index=23&type=chunk) [Key Accounting Data and Financial Indicators](index=13&type=section&id=%E4%B8%BB%E8%A6%81%E4%BC%9A%E8%AE%A1%E6%95%B0%E6%8D%AE%E5%92%8C%E8%B4%A2%E5%8A%A1%E6%8C%87%E6%A0%87) In H1 2022, the company's operating revenue decreased by **2.96%** to **RMB 4.09 billion**, and net profit attributable to shareholders significantly dropped by **29.79%** to **RMB 849 million**, primarily due to pandemic impacts and exchange rate fluctuations H1 2022 Key Accounting Data (Unit: RMB) | Indicator | Current Period (Jan-Jun) | Prior Year (Adjusted) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 4,094,093,645.65 | 4,219,156,183.22 | -2.96 | | Net Profit Attributable to Shareholders of Listed Company | 848,549,138.56 | 1,208,603,816.90 | -29.79 | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-recurring Items) | 758,925,627.05 | 1,138,473,872.55 | -33.34 | | Net Cash Flow from Operating Activities | 1,592,514,611.01 | 1,566,271,291.26 | 1.68 | | **Indicator** | **Current Period End** | **Prior Year End (Adjusted)** | **YoY Change (%)** | | Net Assets Attributable to Shareholders of Listed Company | 22,494,990,772.83 | 25,560,589,952.65 | -11.99 | | Total Assets | 72,205,202,609.00 | 72,304,935,166.59 | -0.14 | H1 2022 Key Financial Indicators | Key Financial Indicator | Current Period (Jan-Jun) | Prior Year (Adjusted) | Change | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (RMB/share) | 0.347 | 0.512 | -32.23% | | Basic EPS (Excluding Non-recurring Items) (RMB/share) | 0.306 | 0.480 | -36.25% | | Weighted Average Return on Net Assets (%) | 3.89 | 5.45 | Decreased by 1.56 percentage points | | Weighted Average Return on Net Assets (Excluding Non-recurring Items) (%) | 3.43 | 5.11 | Decreased by 1.68 percentage points | - Due to the inclusion of **Shenzhen Investment Holdings Infrastructure** through a business combination under common control in January 2022, the company retrospectively adjusted consolidated financial statement data for prior years[27](index=27&type=chunk) [Non-recurring Gains and Losses and Amounts](index=14&type=section&id=%E9%9D%9E%E7%BB%8F%E5%B8%B8%E6%80%A7%E6%8D%9F%E7%9B%8A%E9%A1%B9%E7%9B%AE%E5%92%8C%E9%87%91%E9%A2%9D) During the reporting period, the company's total non-recurring gains and losses amounted to **RMB 89.62 million**, primarily driven by **RMB 111 million** in fair value changes from financial assets H1 2022 Non-recurring Gains and Losses (Unit: RMB) | Non-recurring Gain/Loss Item | Amount | | :--- | :--- | | Gains/Losses on Disposal of Non-current Assets | 4,830,762.65 | | Government Grants | 7,806,721.40 | | Gains/Losses from Fair Value Changes of Financial Assets Held for Trading | 110,627,475.53 | | Other Non-operating Income and Expenses | 4,205,279.19 | | Net Profit/Loss of Subsidiaries from Beginning of Period to Acquisition Date under Common Control | -4,489,534.28 | | Less: Income Tax Impact | 31,661,755.93 | | Less: Impact on Minority Interests (After Tax) | 2,237,287.73 | | **Total** | **89,623,511.51** | [Management Discussion and Analysis](index=16&type=section&id=%E7%AC%AC%E4%B8%89%E8%8A%82%20%E7%AE%A1%E7%90%86%E5%B1%82%E8%AE%A8%E8%AE%BA%E4%B8%8E%E5%88%86%E6%9E%90) [Business Overview and Industry Analysis](index=16&type=section&id=%E4%B8%9A%E5%8A%A1%E6%A6%82%E5%86%B5%E4%B8%8E%E8%A1%8C%E4%B8%9A%E5%88%86%E6%9E%90) The company pursues a dual-core strategy in toll roads and environmental protection, benefiting from national infrastructure plans and 'dual carbon' goals, with broad market opportunities - The company's main businesses are toll roads and major environmental protection, having established multiple business platforms including urban infrastructure, environmental protection, operations, construction, and new energy[33](index=33&type=chunk) - Toll road industry: The national '14th Five-Year Plan' promotes expansion and renovation of busy road sections and market-oriented maintenance, presenting development opportunities for the company[36](index=36&type=chunk) - Major environmental protection business: The solid waste resource utilization industry benefits from 'waste-free city' construction, and the clean energy industry sees stable development under 'dual carbon' targets, both being key strategic directions for the company[39](index=39&type=chunk)[40](index=40&type=chunk) [Core Competitiveness Analysis](index=20&type=section&id=%E6%A0%B8%E5%BF%83%E7%AB%9E%E4%BA%89%E5%8A%9B%E5%88%86%E6%9E%90) The company's core strengths include its position as a state-owned infrastructure platform in the Greater Bay Area, strong integrated project management, continuous innovation, and robust financing capabilities - **Greater Bay Area State-owned Platform Advantage**: As a Shenzhen state-owned platform, the company benefits from 'dual zone' construction opportunities and secures core road assets like Guang-Shen Expressway through controlling **Greater Bay Area Development**[42](index=42&type=chunk)[43](index=43&type=chunk) - **Integrated Management Capability**: Accumulated rich experience in investment, construction, and operation of heavy-asset, concession-based businesses (highways, environmental protection), forming upstream and downstream industry chain synergy[43](index=43&type=chunk) - **Innovation Capability**: Continuous innovation in business models (e.g., PPP), technology applications (e.g., smart highways), and strategic transformation (entering the major environmental protection industry)[44](index=44&type=chunk) - **Strong Financing Platform**: Possesses A+H share listing platforms and added **Greater Bay Area Development** as an overseas financing platform, with high credit ratings and smooth financing channels[44](index=44&type=chunk) [Operating Performance Discussion and Analysis](index=22&type=section&id=%E7%BB%8F%E8%90%A5%E6%83%85%E5%86%B5%E8%AE%BA%E8%AE%BA%E4%B8%8E%E5%88%86%E6%9E%90) H1 2022 saw toll road revenue decline due to pandemic impacts, while environmental protection business advanced steadily with increased organic waste treatment capacity and expanded clean energy operations H1 2022 Revenue Composition | Revenue Category | Amount (RMB Billion) | Proportion of Total Revenue | | :--- | :--- | :--- | | Toll Revenue | 2.41 | 58.87% | | Environmental Business Revenue | 0.84 | 20.42% | | Other Revenue | 0.85 | 20.71% | | **Total** | **4.09** | **100.00%** | [Toll Road Business](index=22&type=section&id=%E6%94%B6%E8%B4%B9%E5%85%AC%E8%B7%AF%E4%B8%9A%E5%8A%A1) Toll road revenue declined due to pandemic-related traffic reductions, though some projects saw growth from new openings or upgrades, while the company expanded its core road asset portfolio H1 2022 Key Toll Road Operating Data | Toll Road | Average Daily Mixed Traffic Volume (Thousand Vehicles/Day) | Average Daily Toll Revenue (RMB Thousands) | | :--- | :--- | :--- | | **Shenzhen Area** | | | | Outer Ring Project | 221 | 2,434 | | Jihe East Section | 267 | 1,665 | | Shuiguan Expressway | 221 | 1,500 | | **Other Areas** | | | | Guang-Shen Expressway | 507 | 6,214 | | West Line Expressway | 215 | 2,918 | | Qinglian Expressway | 44 | 1,713 | - Outer Ring Phase II opened on January 1, 2022, creating a through-route effect with Phase I, positively impacting overall project operations[49](index=49&type=chunk)[55](index=55&type=chunk) - Guanglian Expressway's opening at the end of 2021 diverted traffic from Qinglian Expressway, leading to a significant year-on-year decrease in its toll revenue[51](index=51&type=chunk) - Yangmao Expressway completed its expansion and renovation at the end of 2021, improving traffic capacity and increasing toll rates, resulting in a significant year-on-year increase in toll revenue[51](index=51&type=chunk) - Completed the acquisition of **Shenzhen Investment Holdings Infrastructure**, indirectly holding approximately **71.83%** of **Greater Bay Area Development** shares, thereby acquiring interests in Guang-Shen Expressway and West Line Expressway, consolidating regional market share[56](index=56&type=chunk) [Major Environmental Protection Business](index=27&type=section&id=%E5%A4%A7%E7%8E%AF%E4%BF%9D%E4%B8%9A%E5%8A%A1) The environmental protection segment expanded significantly, with organic waste treatment capacity exceeding **6,000 tons/day** through strategic acquisitions and investments, while clean energy operations grew to **648 MW** - Increased capital contribution to **Land Environmental Protection** to **RMB 1.55 billion**, raising its shareholding from **67.14%** to **85.17%**, enhancing its business expansion capabilities[60](index=60&type=chunk) - Acquired **70%** equity of **Lisai Environmental Protection**, gaining exclusive concession rights for kitchen waste treatment in Longhua District, Shenzhen, boosting market share in the Shenzhen area[62](index=62&type=chunk) - As of the end of the reporting period, the Group's designed organic waste treatment capacity exceeded **6,000 tons/day**, ranking among the top in the domestic industry[39](index=39&type=chunk) H1 2022 Wind Power Project Operating Data | Project | Group Equity Ratio | On-grid Power (MWh) | Operating Revenue (RMB Thousands) | | :--- | :--- | :--- | :--- | | Baotou Nanfeng Project | 100% | 337,725.67 | 115,580.5 | | Xinjiang Mulei Project | 100% | 409,904.20 | 192,064.9 | | Yongcheng Zhuneng Project | 100% | 45,560.66 | 24,191.6 | | Zhongwei Gantang Project | 100% | 53,380.17 | 25,588.8 | [Entrusted Management and Other Infrastructure Development](index=30&type=section&id=%E5%A7%94%E6%89%98%E7%AE%A1%E7%90%86%E5%8F%8A%E5%85%B6%E4%BB%96%E5%9F%BA%E7%A1%80%E8%AE%BE%E6%96%BD%E5%BC%80%E5%8F%91) The company actively engaged in entrusted construction and management, securing a **RMB 290 million** contract for 'Four Roads' maintenance, while prudently advancing land development projects and recovering **RMB 1.13 billion** from a joint venture - Entrusted construction business: Duohua Bridge project completed approximately **94%** of its physical progress; Bimeng Garden resettlement community project completed approximately **67%**[73](index=73&type=chunk) - Entrusted management business: Successfully renewed the comprehensive maintenance project for 'Four Roads' (Nanguang, Yanpai, Yanba, Longda Shenzhen Section), with a 3-year contract period and a total contract value of approximately **RMB 290 million**[74](index=74&type=chunk) - Land development: Guizhou 'Youshan Meishu' project has some commercial and residential units for sale and under construction; Meilincun urban renewal project residential units are sold out, and a capital reduction of **RMB 1.13 billion** was initiated to recover investment[76](index=76&type=chunk)[77](index=77&type=chunk) [Financial Position Analysis](index=34&type=section&id=%E8%B4%A2%E5%8A%A1%E7%8A%B6%E5%86%B5%E5%88%86%E6%9E%90) H1 2022 net profit declined by **29.79%** due to reduced toll revenue and a **64.02%** increase in financial expenses from exchange rate fluctuations, while interest-bearing debt rose by **9.23%** to **RMB 33.22 billion** Financial Statement Key Item Variation Analysis (Unit: RMB Thousands) | Item | Current Period Amount | Prior Year Amount | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 4,094,094 | 4,219,156 | -2.96 | | Operating Cost | 2,501,187 | 2,389,157 | 4.69 | | Financial Expenses | 718,156 | 437,859 | 64.02 | | Investment Income | 338,910 | 546,208 | -37.95 | | Income Tax Expense | 191,640 | 364,212 | -47.38 | - Financial expenses significantly increased by **64.02%** year-on-year, primarily due to exchange losses on foreign currency-denominated debts caused by exchange rate fluctuations[84](index=84&type=chunk)[99](index=99&type=chunk) - Investment income decreased by **37.95%** year-on-year, mainly due to reduced income from joint/associate toll road enterprises affected by the pandemic, and a higher base from Derun Environment in the prior year[102](index=102&type=chunk) - As of June 30, 2022, the Group's total interest-bearing debt was **RMB 33.22 billion**, an increase of **9.23%** from the beginning of the year, primarily due to increased borrowings for the acquisition of **Shenzhen Investment Holdings Infrastructure** equity[110](index=110&type=chunk) Capital Structure and Solvency Indicators | Key Indicator | Current Period End | Prior Year End (Restated) | | :--- | :--- | :--- | | Asset-Liability Ratio | 60.94% | 56.39% | | Net Debt-to-Equity Ratio | 98.26% | 79.13% | | Interest Coverage Ratio (times) | 2.94 | 4.10 | [Outlook and Plans](index=53&type=section&id=%E5%89%8D%E6%99%AF%E8%AE%A1%E5%88%92) In H2 2022, the company plans to strengthen its dual-core strategy by integrating toll road operations with **Greater Bay Area Development**, advancing key projects, expanding environmental protection and clean energy businesses, and optimizing financing channels - **Toll Roads**: Enhance refined operations, deeply integrate **Greater Bay Area Development** businesses, and advance preliminary work for projects like Jihe Expressway expansion and Outer Ring Phase III[149](index=149&type=chunk) - **Major Environmental Protection**: Deepen focus on solid waste resource utilization and clean energy, high-quality completion of **Guangming Environmental Park** project, increase development and M&A of wind and solar power projects, and build an integrated clean energy system[149](index=149&type=chunk)[150](index=150&type=chunk) - **Financial Management**: Broaden financing channels, ensure funding for investment expansion and project construction, reduce financing costs, and ensure financial security[150](index=150&type=chunk) [Corporate Governance](index=55&type=section&id=%E7%AC%AC%E5%9B%9B%E8%8A%82%20%E5%85%AC%E5%8F%B8%E6%B2%BB%E7%90%86) [Shareholders' Meetings and Executive Changes](index=55&type=section&id=%E8%82%A1%E4%B8%9C%E5%A4%A7%E4%BC%9A%E4%B8%8E%E9%AB%98%E7%AE%A1%E5%8F%98%E5%8A%A8) The company held its 2021 Annual General Meeting on June 30, 2022, approving key resolutions, while Ms. Chen Haishan retired from the board and Ms. Gong Taotao resigned as Board Secretary - One shareholders' meeting (2021 Annual General Meeting) was held in H1 2022, approving **11 proposals** including 2021 final dividend, director changes, and bond issuance authorization[151](index=151&type=chunk)[152](index=152&type=chunk) - Board members changed, with Ms. Chen Haishan retiring and Mr. Lv Dawei elected as a new director[153](index=153&type=chunk)[155](index=155&type=chunk) - Board Secretary changed, with Ms. Gong Taotao resigning and Ms. Zhao Guiping, the company's Chief Accountant, concurrently assuming the role[153](index=153&type=chunk)[155](index=155&type=chunk) [Profit Distribution Plan](index=56&type=section&id=%E5%88%A9%E6%B6%A6%E5%88%86%E9%85%8D%E6%96%B9%E6%A1%88) The Board recommended no interim dividend for 2022 and no capital reserve conversion, while the 2021 annual profit distribution of **RMB 0.62** per share (tax inclusive) totaling **RMB 1.35 billion** was completed - The Board recommended no interim dividend for 2022 and no conversion of capital reserves into share capital[3](index=3&type=chunk)[156](index=156&type=chunk) - The 2021 annual profit distribution plan has been implemented, distributing a cash dividend of **RMB 0.62** per share (tax inclusive), totaling **RMB 1.352 billion**[157](index=157&type=chunk) [Environmental and Social Responsibility](index=59&type=section&id=%E7%AC%AC%E4%BA%94%E8%8A%82%20%E7%8E%AF%E5%A2%83%E4%B8%8E%E7%A4%BE%E4%BC%9A%E8%B4%A3%E4%BB%BB) [Environmental Protection and Carbon Reduction](index=59&type=section&id=%E7%8E%AF%E5%A2%83%E4%BF%9D%E6%8A%A4%E4%B8%8E%E7%A2%B3%E5%87%8F%E6%8E%92) The company actively promotes environmental protection and carbon reduction through investments in wind power, energy-efficient lighting, and solar water heaters, processing **401,180 tons** of kitchen waste during the period - The company promotes energy conservation and emission reduction through investments in wind power, use of energy-efficient LED lights, and adoption of solar water heaters[167](index=167&type=chunk) - During the reporting period, the company processed **401,180 tons** of kitchen waste[167](index=167&type=chunk) [Social Responsibility and Rural Revitalization](index=59&type=section&id=%E7%A4%BE%E4%BC%9A%E8%B4%A3%E4%BB%BB%E4%B8%8E%E4%B9%A1%E6%9D%91%E6%8C%AF%E5%85%B4) The company actively fulfills its social responsibility by purchasing **RMB 1.21 million** in poverty alleviation products and successfully branding 'Daan Garlic' as a nationally recognized agricultural product - As of June 30, 2022, the company purchased **RMB 1.2131 million** in poverty alleviation products, supporting development in impoverished areas[168](index=168&type=chunk) - The company successfully created the 'Daan Garlic' poverty alleviation brand, which was included in the second batch of national famous, special, excellent, and new agricultural products list in 2021[169](index=169&type=chunk) [Significant Matters](index=61&type=section&id=%E7%AC%AC%E5%85%AD%E8%8A%82%20%E9%87%8D%E8%A6%81%E4%BA%8B%E9%A1%B9) [Fulfillment of Commitments](index=61&type=section&id=%E6%89%BF%E8%AF%BA%E4%BA%8B%E9%A1%B9%E5%B1%A5%E8%A1%8C%E6%83%85%E5%86%B5) The company and related parties fulfilled all commitments, notably resolving the non-compete pledge from controlling shareholder **Shenzhen Investment Holdings** through the acquisition of **Shenzhen Investment Holdings Infrastructure** - To resolve the non-compete commitment, the company completed the acquisition of **100%** equity of **Shenzhen Investment Holdings Infrastructure** on January 11, 2022, thereby indirectly controlling **Greater Bay Area Development** and acquiring interests in Guang-Shen Expressway and other road assets[173](index=173&type=chunk) [Material Litigation and Related Party Transactions](index=62&type=section&id=%E9%87%8D%E5%A4%A7%E8%AF%89%E8%AE%BC%E4%B8%8E%E5%85%B3%E8%81%94%E4%BA%A4%E6%98%93) The company had no material litigation, but engaged in significant related party transactions, including the **HKD 10.48 billion** acquisition of **Shenzhen Investment Holdings Infrastructure** and a **RMB 1.13 billion** capital reduction from **United Land** - The company has no material litigation or arbitration matters; subsidiaries **Nanjing Wind Power** and **Land Environmental Protection** are involved in several contract disputes, which are still being processed[175](index=175&type=chunk)[176](index=176&type=chunk)[177](index=177&type=chunk) - Completed the acquisition of **Shenzhen Investment Holdings Infrastructure** from a related party, with a total cost not exceeding **HKD 10.479 billion**; the transaction was completed on January 11, 2022[179](index=179&type=chunk) - A capital reduction was performed on related party **United Land**, with the company recovering approximately **RMB 1.132 billion**; this capital reduction has been completed[179](index=179&type=chunk) [Material Contracts and Guarantees](index=66&type=section&id=%E9%87%8D%E5%A4%A7%E5%90%88%E5%90%8C%E4%B8%8E%E6%8B%85%E4%BF%9D) As of the period end, the company's total guarantees amounted to **RMB 4.54 billion**, representing **20.18%** of net assets, with all guarantees executed in compliance and no overdue situations Guarantees at Period End (Unit: RMB Million) | Guarantee Category | Guarantee Balance at Period End | | :--- | :--- | | External Guarantees (Excluding Subsidiaries) | 1,349.95 | | Guarantees to Subsidiaries | 3,190.53 | | **Total Guarantees** | **4,540.48** | | Total Guarantees as % of Company's Net Assets | 20.18% | [Other Significant Matters](index=73&type=section&id=%E5%85%B6%E4%BB%96%E9%87%8D%E8%A6%81%E4%BA%8B%E9%A1%B9) The company issued **RMB 1.5 billion** in corporate bonds and **RMB 2 billion** in short-term notes, adjusted its strategy to have **Greater Bay Area Development** acquire **51%** of **Yanjiang Company**, and completed several other equity acquisitions and capital increases - Issued **RMB 1.5 billion** in 7-year corporate bonds ('22 Shengao 01') with a coupon rate of **3.18%**[197](index=197&type=chunk) - Issued two tranches of super short-term financing bonds, totaling **RMB 2 billion**, with coupon rates of **2.12%** and **2.00%** respectively[197](index=197&type=chunk) - Canceled the plan to absorb and merge **Yanjiang Company**, adjusting to have **Greater Bay Area Development** increase capital in **Yanjiang Company** by **RMB 2.998 billion**, after which **Greater Bay Area Development** will hold **51%** of **Yanjiang Company**'s equity[199](index=199&type=chunk)[200](index=200&type=chunk) [Share Changes and Shareholder Information](index=77&type=section&id=%E7%AC%AC%E4%B8%83%E8%8A%82%20%E8%82%A1%E4%BB%BD%E5%8F%98%E5%8A%A8%E5%8F%8A%E8%82%A1%E4%B8%9C%E6%83%85%E5%86%B5) [Shareholder Information](index=77&type=section&id=%E8%82%A1%E4%B8%9C%E6%83%85%E5%86%B5) As of the reporting period end, the company's total share capital remained **2.181 billion shares** across **18,492 shareholders**, with **HKSCC NOMINEES LIMITED**, **Xintongchan Company**, and **Shenzhen Guanghui Highway Development** as the top three shareholders Top Ten Shareholders' Shareholdings at Period End | Shareholder Name | Shares Held at Period End (shares) | Proportion (%) | Shareholder Nature | | :--- | :--- | :--- | :--- | | HKSCC NOMINEES LIMITED | 730,014,042 | 33.48 | Overseas Legal Person | | Xintongchan Industrial Development (Shenzhen) Co., Ltd. | 654,780,000 | 30.03 | State-owned Legal Person | | Shenzhen Guanghui Highway Development Co., Ltd. | 411,459,887 | 18.87 | State-owned Legal Person | | China Merchants Highway Network Technology Holdings Co., Ltd. | 91,092,743 | 4.18 | State-owned Legal Person | | Guangdong Road and Bridge Construction Development Co., Ltd. | 61,948,790 | 2.84 | State-owned Legal Person | - **Xintongchan Company** and **Shenzhen Guanghui Company** are related parties under common control of **Shenzhen International**[212](index=212&type=chunk) [Bond-Related Information](index=81&type=section&id=%E7%AC%AC%E4%B9%9D%E8%8A%82%20%E5%80%BA%E5%88%B8%E7%9B%B8%E5%85%B3%E6%83%85%E5%86%B5) [Overview of Outstanding Bonds](index=81&type=section&id=%E5%AD%98%E7%BB%AD%E5%80%BA%E5%88%B8%E6%A6%82%E8%A7%88) As of the reporting period end, the company maintained a diverse portfolio of outstanding bonds and debt financing instruments, including corporate bonds and super short-term notes, with new issuances totaling **RMB 3.5 billion** Overview of Key Outstanding Bonds and Debt Financing Instruments (Unit: RMB Billion) | Abbreviation | Code | Bond Balance | Interest Rate (%) | Maturity Date | | :--- | :--- | :--- | :--- | :--- | | 07 Shenzhen Expressway Bond | 078037 | 0.80 | 5.50 | 2022/07/31 | | 20 Shengao 01 | 163300.SH | 1.40 | 3.05 | 2025/03/20 | | G20 Shengao 1 | 175271.SH | 0.80 | 3.65 | 2025/10/22 | | G21 Shengao 1 | 175979.SH | 1.20 | 3.49 | 2026/04/19 | | 21 Shengao 01 | 188451.SH | 1.00 | 3.35 | 2026/07/27 | | 22 Shengao 01 | 185300.SH | 1.50 | 3.18 | 2029/01/20 | | 18 Shenzhen Expressway MTN002 | 101800882 | 0.80 | 4.49 | 2023/08/15 | | 22 Shenzhen Expressway SCP001 | 012280888 | 1.00 | 2.12 | 2022/09/02 | | 22 Shenzhen Expressway SCP002 | 012281995 | 1.00 | 2.00 | 2023/02/27 | [Financial Report](index=88&type=section&id=%E7%AC%AC%E5%8D%81%E8%8A%82%20%E8%B4%A2%E5%8A%A1%E6%8A%A5%E5%91%8A) [Consolidated Financial Statements](index=88&type=section&id=%E5%90%88%E5%B9%B6%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) As of June 30, 2022, the company reported total assets of **RMB 72.21 billion**, total liabilities of **RMB 44.00 billion**, and net assets attributable to parent company of **RMB 22.50 billion**, with H1 operating revenue of **RMB 4.09 billion** and net profit of **RMB 880 million** Consolidated Income Statement Core Data (Jan-Jun 2022) | Item | Amount (RMB) | | :--- | :--- | | Total Operating Revenue | 4,094,093,645.65 | | Total Operating Cost | 3,467,660,986.71 | | Investment Income | 338,909,623.64 | | Operating Profit | 1,067,282,719.24 | | Total Profit | 1,071,487,998.43 | | Net Profit | 879,848,262.33 | | Net Profit Attributable to Parent Company Shareholders | 848,549,138.56 | Consolidated Cash Flow Statement Core Data (Jan-Jun 2022) | Item | Amount (RMB) | | :--- | :--- | | Net Cash Flow from Operating Activities | 1,592,514,611.01 | | Net Cash Flow from Investing Activities | (2,621,719,346.50) | | Net Cash Flow from Financing Activities | 1,016,160,256.48 | | Net Increase in Cash and Cash Equivalents | 50,040,346.21 | [Notes to Financial Statements (Selected)](index=100&type=section&id=%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8%E9%99%84%E6%B3%A8%EF%BC%88%E8%8A%82%E9%80%89%EF%BC%89) Notes detail accounting policies, including the traffic-flow method for toll road concession amortization, equity method for investments in associates, and segment information highlighting tolling as the primary profit driver - Toll road concession rights, classified as intangible assets, are amortized using the traffic-flow method, requiring management to regularly review and adjust the unit amortization amount based on projected total traffic volume[329](index=329&type=chunk) Book Value of Major Associates' Investments at Period End (Unit: RMB) | Investee | Balance at Period End | | :--- | :--- | | Derun Environment | 5,063,080,829.44 | | Guang-Shen-Zhu Expressway Co., Ltd. | 5,743,481,046.26 | | Guangdong Guangzhu West Line Expressway Co., Ltd. | 3,678,996,482.20 | | Shenzhen International United Land Co., Ltd. | 1,230,568,579.64 | H1 2022 Segment Financial Information (Unit: RMB) | Item | Toll Business | Major Environmental Protection Business | Other | Total | | :--- | :--- | :--- | :--- | :--- | | Revenue from External Transactions | 2,410,155,296.36 | 836,209,660.64 | 847,728,688.65 | 4,094,093,645.65 | | Total Profit | 1,164,210,639.65 | 166,163,326.77 | (429,121,051.13) | 1,071,487,998.43 | | Total Assets | 43,129,457,888.09 | 18,855,735,991.82 | 8,152,165,718.65 | 72,205,202,609.00 |

Financial Performance - Net profit attributable to shareholders for Q1 2022 was RMB 412.72 million, down 24.21% from RMB 544.56 million in Q1 2021[6] - Operating revenue for Q1 2022 was RMB 1.77 billion, representing a decline of 9.65% compared to RMB 1.96 billion in Q1 2021[6] - Basic earnings per share for Q1 2022 were RMB 0.168, down 26.45% from RMB 0.229 in Q1 2021[6] - Total profit for Q1 2022 was RMB 529,627,762.91, down 33.5% from RMB 795,515,287.26 in Q1 2021[22] - The company reported a decrease in sales expenses to RMB 13,367,405.69 in Q1 2022 from RMB 8,930,568.82 in Q1 2021, an increase of 49.5%[22] - Research and development expenses decreased to RMB 9,216,910.23 in Q1 2022 from RMB 13,313,152.62 in Q1 2021, a reduction of 30.5%[22] - Cash flow from operating activities for Q1 2022 was RMB 611.01 million, a decrease from RMB 677.22 million in Q1 2021[5] - Cash flow from operating activities in Q1 2022 was RMB 611,009,879.13, compared to RMB 653,589,324.46 in Q1 2021, reflecting a decline of 6.5%[23] - The company's diluted earnings per share for Q1 2022 was RMB 0.168, down from RMB 0.229 in Q1 2021, a decrease of 26.6%[22] Assets and Liabilities - Total assets as of March 31, 2022, were RMB 71.61 billion, a decrease of 0.97% from RMB 72.31 billion as of December 31, 2021[4] - Total liabilities rose to RMB 41,732,854,270.34 from RMB 40,772,361,268.90, an increase of approximately 2.36%[21] - The company's total equity decreased to RMB 29,881,260,812.81 from RMB 31,539,698,547.18, a reduction of approximately 5.27%[21] - As of March 31, 2022, total current assets decreased to RMB 11,008,536,419.31 from RMB 11,282,262,306.50, a decline of approximately 2.42%[20] - Short-term borrowings increased significantly to RMB 8,383,107,882.55 from RMB 4,120,586,329.34, representing a growth of about 103.00%[21] - Long-term receivables surged to RMB 2,012,245,352.20 from RMB 1,116,297,854.71, marking an increase of approximately 80.66%[20] - The company's cash and cash equivalents increased to RMB 6,208,171,389.99 from RMB 5,948,688,887.14, reflecting a growth of about 4.37%[20] - The inventory level increased to RMB 1,371,338,750.16 from RMB 1,338,820,859.08, reflecting a growth of about 2.43%[20] - The capital reserve decreased to RMB 6,121,968,091.85 from RMB 8,864,157,411.51, a drop of about 30.93%[21] Shareholder Information - The total number of shareholders as of the reporting period was 18,727, with 18,489 being A-share shareholders and 238 being H-share shareholders[9] - The top shareholder, HKSCC Nominees Limited, held 33.48% of shares, totaling 730,176,042 shares[10] Operational Highlights - The company experienced a decrease in toll revenue due to the impact of the pandemic and the opening of the Guanglian Expressway, which diverted traffic[6] - The average daily mixed vehicle traffic for the Meiguan Expressway was 113, with daily toll revenue of RMB 320,000 for Q1 2022[13] - The average daily toll revenue for the Longda Expressway was RMB 310,000, with an average daily mixed vehicle traffic of 114 in Q1 2022[13] - The total organic waste processing volume for the group was 182.58 thousand tons, generating operating revenue of RMB 76.794 million in Q1 2022[16] - The wind power projects generated a total of 415,000 MWh of electricity, with wind power business revenue amounting to RMB 131.397 million in Q1 2022[17] - The company holds a 67.14% stake in Land Environmental, which operates 11 commercial projects for kitchen waste treatment[16] - The company has a 100% stake in the Guizhou project, processing 27.02 thousand tons of organic waste and generating RMB 19.422 million in revenue in Q1 2022[16] - The company has a 20% stake in the Huai'an Zhongheng project, which generated no revenue in Q1 2022[17] - The company completed the acquisition of 100% equity of Shenzhen Investment Control Infrastructure for a total estimated cost not exceeding HKD 10.479 billion, indirectly holding approximately 71.83% of Bay Area Development[18] - The company has completed the equity transfer related work for acquiring 70% of Lishai Environmental, which was included in the consolidated financial statements from April 20, 2022[19] Other Financial Information - The company reported non-operating income and expenses, with a total impact of RMB -1.44 million from non-recurring profit and loss items[7] - The company's total cash inflow from financing activities in Q1 2022 was RMB 8,707,578,372.69, an increase of 26.5% from RMB 6,861,943,232.49 in Q1 2021[23] - The company recorded a foreign exchange impact on cash and cash equivalents of RMB -11,980,046.41 in Q1 2022, compared to RMB 12,763,012.51 in Q1 2021[23]

Financial Performance - The company reported a total revenue of RMB 1.2 billion for the fiscal year ending December 31, 2021, representing a year-on-year increase of 15%[6]. - The company's operating revenue for 2021 was RMB 10,871,924,008.52, representing a year-on-year increase of 35.45%[26]. - Net profit attributable to shareholders of the listed company reached RMB 2,606,254,756.43, an increase of 26.85% compared to the previous year[26]. - The net cash flow from operating activities was RMB 3,941,530,767.73, showing a significant increase of 258.11% year-on-year[26]. - The total assets of the company as of the end of 2021 amounted to RMB 60,613,494,756.12, reflecting a year-on-year growth of 9.92%[26]. - Basic earnings per share for 2021 were RMB 1.110, up 18.59% compared to the previous year[26]. - The company achieved a total revenue of RMB 4,245.8 million in Q4 2021, reflecting a growth from RMB 2,414.9 million in Q3 2021[28]. - The company reported a net profit of RMB 678.6 million in Q4 2021, with a decrease of 4.2% compared to RMB 708.4 million in Q3 2021[28]. - The total operating revenue for 2021 reached RMB 10,872 million, a 35.3% increase from RMB 8,027 million in 2020[32]. - The company achieved a net profit attributable to shareholders of 2,606,255 thousand yuan in 2021, representing a year-on-year growth of approximately 26.85% compared to 2,054,523 thousand yuan in 2020, primarily due to contributions from newly opened projects and recovery from pandemic impacts on toll road revenues[102]. Traffic and Operations - User traffic on the expressways increased by 10% compared to the previous year, with an average daily traffic volume of 1.5 million vehicles[6]. - The average daily toll revenue for the Meiguan Expressway in 2021 was RMB 448.9 thousand, an increase from RMB 392.6 thousand in 2020[30]. - Daily average traffic volume on the toll roads reached significant levels, with the Meiguan Expressway recording 158,000 vehicles and generating toll revenue of RMB 449,000[65]. - The Outer Ring Expressway project has sections totaling approximately 51 kilometers that opened for operation on November 29, 2020, and January 1, 2022[17]. - The company operates 17 toll road projects with a total mileage of approximately 604 kilometers, primarily located in Shenzhen and the Guangdong-Hong Kong-Macao Greater Bay Area, showcasing strong regional advantages[56]. Strategic Initiatives - The company plans to expand its expressway network by 20% over the next three years, focusing on key regions in Guangdong province[6]. - A strategic partnership with local governments aims to enhance infrastructure investment, targeting an additional RMB 500 million in funding[6]. - The company is exploring potential acquisitions of smaller toll road operators to enhance market share and operational efficiency[6]. - The company plans to expand its market presence and invest in new technologies to enhance operational efficiency[29]. - The company is actively exploring new urban construction and financial integration businesses to expand its operational scope[51]. Environmental and Technological Investments - The company has allocated RMB 300 million for research and development of environmentally friendly road construction materials in the upcoming fiscal year[6]. - The company is focused on expanding its renewable energy projects, including wind power initiatives in various regions[19]. - The company has invested in over 15 projects in environmental protection and clean energy sectors[24]. - The company has established a dual business model focusing on toll roads and environmental protection, aiming for strategic transformation and upgrade[50]. - The company is implementing innovative technologies in traditional highway construction and operations, focusing on smart transportation and environmental information systems[64]. Financial Management and Capital Structure - The debt-to-equity ratio was 118.26% at the end of 2021, compared to 109.84% at the end of 2020[33]. - The company has maintained a stable financial leverage ratio, which is considered to be at a safe level despite an increase in interest-bearing debt due to capital expenditures[133]. - The company has a strong fundraising capability and capital management strategy, focusing on optimizing debt structure and reducing financial costs through various financing products and tools[177]. - The company has strategically positioned its dual main business focus on toll roads and environmental protection, aiming for coordinated development and industry upgrades[99]. Challenges and Market Conditions - The company has been affected by the COVID-19 pandemic, which led to a temporary suspension of toll fees from February 17 to May 6, 2020[22]. - The company continues to face competitive pressures from surrounding road networks, impacting traffic flow on certain expressways[67]. - The company faces challenges in acquiring quality toll road projects due to high costs and intense competition in the market[174]. - The company is at risk of financing challenges due to high debt financing ratios and potential market conditions affecting capital availability[176]. Future Outlook and Goals - The company aims to become a leading service provider in highway transportation and environmental infrastructure, focusing on sustainable development solutions[51]. - The company has established a development strategy for the "14th Five-Year Plan" (2021-2025), focusing on market-oriented and innovation-driven growth[163]. - The company's overall revenue target for 2022 is set at RMB 12 billion, with operating costs, management expenses, and sales expenses (excluding depreciation and amortization) controlled at approximately RMB 6.36 billion[165]. - The company plans to continue expanding its investments in infrastructure and environmental projects to enhance profitability[152].

[Definitions](index=5&type=section&id=Item%201.%20Definitions) This chapter provides definitions and explanations for professional terms, company name abbreviations, project names, and industry-specific vocabulary used throughout the report [Company Profile and Key Financial Indicators](index=11&type=section&id=Item%202.%20Company%20Profile%20and%20Key%20Financial%20Indicators) This section provides an overview of the company's fundamental information, stock details, and a comprehensive analysis of its key financial performance and indicators over the past three years [Company Information and Stock Overview](index=11&type=section&id=Company%20Information%20and%20Stock%20Overview) Shenzhen Expressway Company Limited (SZEC) is an A+H share listed company registered in Shenzhen, with Hu Wei as its legal representative, listed on SSE and HKEX - Company's Chinese abbreviation is **深高速** (Shenzhen Expressway), and its legal representative is **Hu Wei**[18](index=18&type=chunk) Stock Information | Stock Type | Listing Exchange | Stock Abbreviation | Stock Code | | :--- | :--- | :--- | :--- | | A-share | Shanghai Stock Exchange | Shenzhen Expressway | 600548 | | H-share | The Stock Exchange of Hong Kong Limited | Shenzhen Expressway | 00548 | [Key Accounting Data and Financial Indicators for the Past Three Years](index=13&type=section&id=Key%20Accounting%20Data%20and%20Financial%20Indicators%20for%20the%20Past%20Three%20Years) In 2021, the company achieved significant performance growth, with operating revenue increasing by 35.45% to RMB 10.872 billion, and net profit attributable to shareholders increasing by 26.85% to RMB 2.606 billion Key Accounting Data (RMB) | Key Accounting Data | 2021 | 2020 | Period-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 10,871,924,008.52 | 8,026,737,099.99 | 35.45 | | Net Profit Attributable to Listed Company Shareholders | 2,606,254,756.43 | 2,054,523,306.30 | 26.85 | | Net Cash Flow from Operating Activities | 3,941,530,767.73 | 1,100,633,933.07 | 258.11 | | Net Assets Attributable to Listed Company Shareholders | 24,638,965,669.92 | 23,042,941,782.92 | 6.93 | | Total Assets | 60,613,494,756.12 | 55,144,962,042.63 | 9.92 | Key Financial Indicators | Key Financial Indicators | 2021 | 2020 | Period-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (RMB/share) | 1.110 | 0.936 | 18.59 | | Weighted Average Return on Net Assets (%) | 12.24 | 10.83 | Increased by 1.41 percentage points | 2021 Quarterly Key Financial Data (RMB) | Indicator | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 1,962,015,531.22 | 2,249,122,448.62 | 2,414,993,814.35 | 4,245,792,214.33 | | Net Profit Attributable to Listed Company Shareholders | 540,534,999.13 | 678,796,456.73 | 708,364,351.34 | 678,558,949.23 | [Annual Events](index=19&type=section&id=Item%203.%20Annual%20Events) This section highlights the company's significant milestones and strategic developments throughout the year, including major project advancements, acquisitions, financing activities, and key governance decisions [Review of Major Annual Events](index=19&type=section&id=Review%20of%20Major%20Annual%20Events) 2021 was a pivotal year for the company's strategic development, achieving significant progress in project construction, business acquisitions, financing activities, and corporate governance, including the commencement of the Jihe Expressway expansion, acquisition of Xinjiang Mulei wind power projects, issuance of USD 300 million bonds, and initiation of a strategic acquisition of Bay Area Development's controlling stake - In January, the pilot section of the Jihe Expressway expansion project commenced, and **100% equity** of Xinjiang Mulei 'Qianzhi Company' and 'Qianhui Company' was acquired[38](index=38&type=chunk) - In March, a Memorandum of Understanding was signed with Shenzhen Investment Holdings, proposing to acquire **71.83% equity** of Bay Area Development[38](index=38&type=chunk) - In July, **USD 300 million bonds** were successfully issued[39](index=39&type=chunk) - In December, the proposal to acquire **100% equity** of Shenzhen Investment Holdings Infrastructure via non-public agreement and the company's '14th Five-Year (2021-2025) Development Strategy' were both approved by the general meeting of shareholders[40](index=40&type=chunk) [Chairman's Address](index=21&type=section&id=Item%204.%20Chairman's%20Address) This section presents the Chairman's review of the company's annual performance, key achievements, and strategic vision for future development, emphasizing core business consolidation and new growth opportunities [Performance Review and Future Outlook](index=21&type=section&id=Performance%20Review%20and%20Future%20Outlook) Chairman Hu Wei summarized 2021 operating performance, with operating revenue of RMB 10.872 billion and net profit of RMB 2.606 billion, proposing a final dividend of RMB 0.62 per share, while outlining future strategies focusing on toll road expansion and environmental protection 2021 Performance Overview | Indicator | Amount | Year-on-Year Growth | | :--- | :--- | :--- | | Operating Revenue | RMB 10.872 billion | 35.45% | | Net Profit | RMB 2.606 billion | 26.85% | | Earnings Per Share | RMB 1.110 | - | | Proposed Final Dividend | RMB 0.62 per share | - | - Business Review: In 2021, the company achieved targets in key project construction, highway operations, project acquisitions, and financing activities, notably the successful strategic acquisition of Hong Kong-listed Bay Area Development[42](index=42&type=chunk) - Future Outlook: The toll road industry has entered a mature phase, with expansion and reconstruction becoming important investment opportunities, while the environmental protection industry is experiencing significant development opportunities under the 'dual carbon' goals, with the company focusing on organic waste treatment, hazardous waste disposal, and clean energy generation[44](index=44&type=chunk) - The company formulated its '14th Five-Year (2021-2025) Development Strategy', centered on toll roads and environmental protection as dual core businesses, aiming to become a leading infrastructure construction and operation service provider[46](index=46&type=chunk) [Management Discussion and Analysis](index=24&type=section&id=Item%205.%20Management%20Discussion%20and%20Analysis) This section provides an in-depth analysis of the company's business operations, industry landscape, core competencies, key operating performance, and future development strategies, including identified risks and mitigation plans [Company Business and Industry Overview](index=24&type=section&id=Company%20Business%20and%20Industry%20Overview) The company primarily invests in, constructs, and manages toll roads and environmental protection businesses, having established a dual-core business structure and multiple platforms, with the toll road industry shifting to maturity and environmental protection facing significant opportunities under 'dual carbon' strategies - The company is positioned as an urban and transportation infrastructure construction and operation service provider, having formed a dual-core business structure of **toll roads and environmental protection**[48](index=48&type=chunk)[51](index=51&type=chunk) - The toll road industry has entered a mature phase, with fewer high-quality new projects, but core road asset expansion and reconstruction present historical opportunities[57](index=57&type=chunk) - Driven by 'dual carbon' strategic goals, the solid waste resource treatment and clean energy industries face significant market opportunities, and the company has initially completed its industrial layout in these two areas[59](index=59&type=chunk)[61](index=61&type=chunk)[63](index=63&type=chunk) [Business Operations During the Reporting Period](index=30&type=section&id=Business%20Operations%20During%20the%20Reporting%20Period) In 2021, the company achieved operating revenue of RMB 10.872 billion, with toll revenue of RMB 5.893 billion (54.2%) and environmental business revenue of RMB 1.793 billion (16.5%), driven by normalized toll road operations and strategic acquisitions in environmental protection 2021 Operating Revenue Composition | Business Segment | Revenue (RMB billion) | Share of Total Revenue (%) | | :--- | :--- | :--- | | Toll Revenue | 5.893 | 54.20 | | Environmental Business Revenue | 1.793 | 16.50 | | Other Revenue | 3.186 | 29.30 | | **Total** | **10.872** | **100.00** | - Toll Road Business: Outer Ring Project Phase I performed well, with average daily toll revenue of approximately **RMB 2.52 million**; traffic volume on Yanjiang Expressway and Longda Expressway maintained good growth, and the company completed the acquisition of a controlling stake in Bay Area Development in January 2022, further consolidating its core advantages[73](index=73&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk) - Environmental Protection Business: In solid waste resource utilization, **6 existing Lande Environmental projects** entered commercial operation, and the Guangming Environmental Park project was signed and commenced construction; in clean energy, the acquisition of three Xinjiang Mulei wind power projects (totaling **299MW**) was completed, bringing the group's total controlled wind power installed capacity to **648MW**[84](index=84&type=chunk)[86](index=86&type=chunk)[88](index=88&type=chunk) - Industry-Finance Integration: Increased equity in the financial leasing company to **90.25%**, providing synergistic support for the expansion of the environmental protection core business, and holds approximately **3.44% stake** in Bank of Guizhou, generating stable investment income[99](index=99&type=chunk) [Analysis of Core Competencies During the Reporting Period](index=44&type=section&id=Analysis%20of%20Core%20Competencies%20During%20the%20Reporting%20Period) The company's core competencies are primarily its Greater Bay Area infrastructure state-owned asset platform advantage, integrated management capabilities, innovation capabilities, and strong financing platform, enabling strategic project acquisition and efficient operations - Greater Bay Area Infrastructure State-owned Asset Platform Advantage: As a platform under Shenzhen State-owned Assets, the company has an advantage in acquiring high-quality projects within the region, exemplified by the successful controlling acquisition of Bay Area Development[103](index=103&type=chunk) - Integrated Management Capabilities: The company possesses comprehensive management capabilities from investment to operation, extending these capabilities to new business areas such as solid waste resource management and clean energy[104](index=104&type=chunk) - Innovation Capabilities: Continuous innovation in business models (e.g., PPP, capital-funded development + land development) and technology application (e.g., intelligent transportation, smart environmental protection), with **333 patent authorizations** by the end of 2021[105](index=105&type=chunk) - Strong Financing Platform: Possesses A+H shares and Bay Area Development, three listing platforms, high domestic and international credit ratings, diverse and cost-effective financing channels[105](index=105&type=chunk) [Key Operating Performance During the Reporting Period](index=45&type=section&id=Key%20Operating%20Performance%20During%20the%20Reporting%20Period) In 2021, the group's net profit attributable to shareholders increased by 26.85% to RMB 2.606 billion, primarily due to contributions from new projects and recovery growth in toll road business, while maintaining a stable financial position despite increased financial expenses and decreased investment income Profit Statement and Cash Flow Statement Major Items Change (RMB thousands) | Item | Current Period (RMB thousands) | Prior Period (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 10,871,924 | 8,026,737 | 35.45 | | Operating Cost | 7,080,446 | 5,214,517 | 35.78 | | Financial Expenses | 749,134 | 491,548 | 52.40 | | Investment Income | 570,093 | 937,363 | -39.18 | | Net Cash Flow from Operating Activities | 3,941,531 | 1,100,634 | 258.11 | - Revenue growth primarily stemmed from the newly opened Outer Ring Expressway Phase I, newly acquired Mulei Wind Power projects, recovery growth in existing toll roads, and recognition of construction service revenue under concession arrangements[109](index=109&type=chunk)[111](index=111&type=chunk) - Investment income decreased mainly because of fewer property deliveries from joint venture United Land (Meilincun project), leading to a significant year-on-year decline in real estate development income[126](index=126&type=chunk)[127](index=127&type=chunk) Key Financial Ratios | Key Indicator | End of 2021 | End of 2020 | | :--- | :--- | :--- | | Asset-Liability Ratio | 54.18% | 52.35% | | Net Debt-to-Equity Ratio | 68.95% | 61.18% | [Discussion and Analysis of the Company's Future Development](index=66&type=section&id=Discussion%20and%20Analysis%20of%20the%20Company's%20Future%20Development) The company's '14th Five-Year' strategy aims to consolidate toll road advantages and expand into environmental protection and clean energy, targeting RMB 12 billion in 2022 operating revenue, with significant capital expenditure plans and identified risks including policy, operational, business expansion, financing, and construction management - '14th Five-Year' Strategic Goal: Deepen presence in the Greater Bay Area, striving to become a leading service provider in highway transportation and environmental protection infrastructure construction and operation[167](index=167&type=chunk) - 2022 Operating Target: Total operating revenue target of **RMB 12 billion**, with operating costs, administrative expenses, and selling expenses controlled at around **RMB 6.36 billion**[169](index=169&type=chunk) 2022-2024 Capital Expenditure Plan (Partial) (RMB thousands) | Project Name | 2022 (RMB thousands) | 2023 (RMB thousands) | 2024 (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Bay Area Development Acquisition | 5,363,930 | 1,992,311 | - | 7,356,241 | | Outer Ring Project | 454,726 | 644,867 | - | 1,099,593 | | Yanjiang Phase II | 641,180 | 271,875 | 12,000 | 925,055 | | Guangming Environmental Park PPP Project | 506,628 | 69,907 | - | 576,535 | - Major risks faced by the company include: policy risks (revision of toll road management regulations, stricter environmental regulations), operational management risks (ETC system, Jihe Expressway expansion impact), business expansion risks (scarcity of quality projects, intense market competition), financing risks (peak capital expenditure period), and construction management risks (multiple projects under simultaneous construction)[174](index=174&type=chunk)[175](index=175&type=chunk)[177](index=177&type=chunk)[180](index=180&type=chunk)[182](index=182&type=chunk)[184](index=184&type=chunk) [Corporate Governance](index=73&type=section&id=Item%206.%20Corporate%20Governance) This section details the company's corporate governance structure, including the roles of the board, supervisory committee, and management, along with information on directors, supervisors, senior management, employee matters, profit distribution, internal controls, and investor relations [Corporate Governance Structure and Operation](index=73&type=section&id=Corporate%20Governance%20Structure%20and%20Operation) The company has established a governance structure comprising the general meeting of shareholders, board of directors, supervisory committee, and management, adhering to SSE and HKEX governance regulations, with five specialized committees effectively operating to ensure independence and proper decision-making - The company's governance structure consists of the general meeting of shareholders, board of directors, supervisory committee, and management, with five specialized committees established: Strategy, Audit, Remuneration, Nomination, and Risk Management[187](index=187&type=chunk)[223](index=223&type=chunk) - During the reporting period, the company held **3 general meetings of shareholders**, **16 board meetings**, and **10 supervisory committee meetings**, deliberating on important proposals such as annual reports, profit distribution, major investments, and amendments to the articles of association[195](index=195&type=chunk)[215](index=215&type=chunk)[239](index=239&type=chunk) - Each specialized committee of the board fulfilled its duties, for example, the Audit Committee reviewed periodic reports and internal control reports, the Remuneration Committee reviewed executive performance appraisal plans, and the Nomination Committee completed the nomination review for directors and executives[225](index=225&type=chunk)[227](index=227&type=chunk)[228](index=228&type=chunk) [Directors, Supervisors, and Senior Management](index=77&type=section&id=Directors%2C%20Supervisors%2C%20and%20Senior%20Management) This chapter details the personal resumes, terms of office, shareholding changes, and remuneration of current and departed directors, supervisors, and senior management during the reporting period, with executive compensation linked to company performance Total Pre-tax Remuneration of Selected Executives in 2021 (RMB ten thousands) | Name | Position | Total Remuneration (RMB ten thousands) | | :--- | :--- | :--- | | Hu Wei | Chairman | 116.99 | | Liao Xiangwen | President | 140.40 | | Wang Zengjin | Executive Director | 126.81 | | Gong Taotao | Board Secretary | 127.90 | - During the reporting period, Chairman Hu Wei purchased **200,000 H-shares** of the company[197](index=197&type=chunk) - The remuneration of the company's directors, supervisors, and senior management is determined based on relevant Chinese policies or regulations, considering market levels and the company's actual situation, with recommendations from the Board's Remuneration Committee and approval by the Board or General Meeting of Shareholders[213](index=213&type=chunk)[245](index=245&type=chunk) [Employee Information and Profit Distribution](index=97&type=section&id=Employee%20Information%20and%20Profit%20Distribution) As of the end of the reporting period, the company had 7,105 employees, with 67.2% in toll collection, implementing a performance-based remuneration system and an active cash dividend policy, proposing RMB 0.62 per share for 2021 - As of the end of the reporting period, the group had a total of **7,105 employees**, of whom **4,775** were toll collection personnel, accounting for **67.2%**[240](index=240&type=chunk)[241](index=241&type=chunk) - The Board recommended a final cash dividend of **RMB 0.62 per share** (including tax) for 2021, totaling approximately **RMB 1.352 billion**, representing **55.88%** of net profit attributable to shareholders after excluding the impact of perpetual bonds[249](index=249&type=chunk) - The company formulated the '2021-2023 Shareholder Return Plan,' which stipulates that, when conditions are met, the profit distributed in cash shall not be less than **55%** of the net profit attributable to shareholders in the consolidated financial statements for the year (after deducting the impact of perpetual bonds and other items)[250](index=250&type=chunk) [Internal Control and Investor Relations](index=101&type=section&id=Internal%20Control%20and%20Investor%20Relations) The company maintains a sound and effective internal control system, with the Board confirming its effectiveness and Deloitte issuing an unqualified audit opinion, while actively managing investor relations through various communication channels - The Board issued the '2021 Annual Internal Control Evaluation Report,' concluding that the company maintained effective internal controls over financial reporting in all material aspects, with no significant deficiencies found[261](index=261&type=chunk)[262](index=262&type=chunk) - Deloitte Touche Tohmatsu Certified Public Accountants LLP, engaged by the company, audited the effectiveness of the company's internal controls over financial reporting and issued an unqualified audit opinion[264](index=264&type=chunk) - The company communicated with investors through various channels, with over **610 interactions** with investors and media reporters and approximately **30 analyst visits** during the year[300](index=300&type=chunk)[301](index=301&type=chunk) [Environmental and Social Responsibility](index=121&type=section&id=Item%207.%20Environmental%20and%20Social%20Responsibility) This section outlines the company's commitment to environmental protection and social welfare, detailing its ESG initiatives, efforts in green transformation, energy conservation, and active participation in community and rural revitalization programs [ESG Work Progress](index=121&type=section&id=ESG%20Work%20Progress) The company actively fulfills its environmental and social responsibilities, prioritizing resource conservation and ecological protection through expanding environmental businesses and using energy-efficient equipment, while engaging in volunteer services and rural revitalization efforts - The company is committed to becoming a leading enterprise in specific environmental protection segments, actively promoting pollution control, ecological protection, and climate change response[309](index=309&type=chunk) - To reduce carbon emissions, the company adopted measures such as increasing wind power project development, using energy-efficient LED lights, and installing solar water heaters in buildings[310](index=310&type=chunk) - In 2021, the company conducted **54 volunteer services**, accumulating **1,932 service hours**, and dispatched employees to Da'an Town, Lufeng City, to participate in rural revitalization work[311](index=311&type=chunk)[312](index=312&type=chunk) [Significant Matters](index=123&type=section&id=Item%208.%20Significant%20Matters) This section covers the fulfillment of key commitments, major related party transactions, significant contracts, and other important events during the reporting period, including acquisitions, bond issuances, and corporate name changes [Fulfillment of Commitments](index=123&type=section&id=Fulfillment%20of%20Commitments) During the reporting period, relevant parties strictly fulfilled their commitments, including the controlling shareholder's transfer of Bay Area Development equity to resolve horizontal competition, while Nanjing Wind Power, Lande Environmental, and Qiantai Company failed to meet 2021 performance commitments, leading to recognized compensation and goodwill impairment - To resolve horizontal competition, the company completed the acquisition of Shenzhen Investment Holdings Infrastructure on **January 11, 2022**, thereby indirectly controlling Bay Area Development and fulfilling the controlling shareholder's commitment[316](index=316&type=chunk) - Nanjing Wind Power's 2021 performance did not meet its commitment, with an estimated net loss of approximately **RMB 113 million**; the company recognized performance compensation receivable of approximately **RMB 103 million**, and accrued goodwill impairment of **RMB 110 million**[318](index=318&type=chunk) - Lande Environmental's 2021 performance did not meet its commitment, with an estimated net loss of approximately **RMB 80 million**; the company recognized performance compensation receivable of approximately **RMB 105 million**[320](index=320&type=chunk) - Qiantai Company's 2021 performance did not meet its commitment, with an estimated net profit of approximately **RMB 2.73 million**; the company recognized performance compensation receivable of approximately **RMB 4.78 million**[321](index=321&type=chunk) [Major Related Party Transactions and Significant Contracts](index=131&type=section&id=Major%20Related%20Party%20Transactions%20and%20Significant%20Contracts) The most significant related party transaction was the company's acquisition of Shenzhen Investment Holdings Infrastructure for up to HKD 10.479 billion, indirectly controlling Bay Area Development, alongside other routine related party transactions and external guarantees totaling RMB 2.304 billion, representing 9.35% of net assets - Significant Related Party Transaction: The company, through its wholly-owned subsidiary Meihua Company, acquired **100% equity** of Shenzhen Investment Holdings Infrastructure at a total cost not exceeding **HKD 10.479 billion**; this transaction was completed on **January 11, 2022**[333](index=333&type=chunk)[334](index=334&type=chunk) External Guarantees (as of end of reporting period) (RMB millions) | Item | Amount (RMB millions) | | :--- | :--- | | Total Guarantee Balance at End of Reporting Period (A) (excluding guarantees to subsidiaries) | 1,258.12 | | Total Guarantee Balance to Subsidiaries at End of Reporting Period (B) | 1,046.23 | | **Total Guarantees (A+B)** | **2,304.35** | | Total Guarantees as % of Company's Net Assets | 9.35 | [Other Significant Matters](index=139&type=section&id=Other%20Significant%20Matters) During the reporting period, the company extended the validity of its H-share issuance resolution, successfully issued USD 300 million overseas bonds and domestic green corporate bonds, initiated absorption mergers of subsidiaries, and changed its corporate name to 'Shenzhen Expressway Group Company Limited' - The validity period for the resolution on non-public issuance of up to **300 million H-shares** was extended to **March 30, 2022**[352](index=352&type=chunk) - Successfully issued **USD 300 million 5-year fixed-rate overseas bonds**, and in China issued **RMB 1.2 billion green corporate bonds** and **RMB 1 billion corporate bonds**[353](index=353&type=chunk) - The company's name changed to 'Shenzhen Expressway Group Company Limited,' with relevant industrial and commercial changes approved on **December 16, 2021**[356](index=356&type=chunk) - Significant Investments: Completed the acquisition of three Xinjiang Mulei wind power projects totaling **RMB 1.015 billion**, and purchased part of the Hanjing Financial Center property for office use at **RMB 1.559 billion**[358](index=358&type=chunk)[359](index=359&type=chunk) [Share Changes and Shareholder Information](index=148&type=section&id=Item%209.%20Share%20Changes%20and%20Shareholder%20Information) This section provides details on the company's share capital structure, including total shares, A and H share proportions, total shareholder count, and information on the top shareholders, as well as the indirect controlling shareholder and ultimate controlling party [Share Capital Structure and Shareholder Information](index=148&type=section&id=Share%20Capital%20Structure%20and%20Shareholder%20Information) During the reporting period, the company's total share capital and structure remained unchanged at 2.181 billion shares (65.72% A-shares, 34.28% H-shares), with 22,046 shareholders, and Shenzhen International as the indirect controlling shareholder - During the reporting period, the company's total number of shares and share capital structure remained unchanged, with a total share capital of **2,180,770,326 shares**[380](index=380&type=chunk) Top Three Shareholders' Shareholding (as of end of reporting period) | Shareholder Name | Number of Shares Held | Proportion (%) | | :--- | :--- | :--- | | HKSCC NOMINEES LIMITED | 730,174,042 | 33.48 | | Xintongchan Industrial Development (Shenzhen) Co., Ltd. | 654,780,000 | 30.03 | | Shenzhen Shenguanghui Highway Development Co., Ltd. | 411,459,887 | 18.87 | - The company's indirect controlling shareholder is **Shenzhen International Holdings Limited**, and the ultimate controlling party is **Shenzhen Municipal People's Government State-owned Assets Supervision and Administration Commission**[396](index=396&type=chunk)[399](index=399&type=chunk) [Bond-Related Information](index=156&type=section&id=Item%2011.%20Bond-Related%20Information) This section provides a comprehensive overview of the company's bond issuances and debt financing instruments, including details on newly issued bonds, their terms, and the utilization of raised funds for project construction and debt repayment [Corporate Bonds and Debt Financing Instruments](index=156&type=section&id=Corporate%20Bonds%20and%20Debt%20Financing%20Instruments) As of the end of the reporting period, the company had outstanding enterprise bonds, corporate bonds (including green bonds), and non-financial enterprise debt financing instruments, having successfully issued multiple tranches totaling RMB 4 billion in super short-term commercial papers, RMB 1.2 billion green corporate bonds, RMB 1 billion corporate bonds, and USD 300 million overseas bonds, with proceeds used for project construction and debt repayment - New bonds issued during the reporting period include: **RMB 1.2 billion 5-year green corporate bonds** (G21 Shengao 1, interest rate **3.49%**), **RMB 1 billion 5-year corporate bonds** (21 Shengao 01, interest rate **3.35%**), and **4 tranches totaling RMB 4 billion** in super short-term commercial papers[382](index=382&type=chunk)[384](index=384&type=chunk)[413](index=413&type=chunk) - The company issued **USD 300 million 5-year fixed-rate overseas bonds** in July 2021, with a coupon rate of **1.75%**, listed and traded on the Hong Kong Stock Exchange[385](index=385&type=chunk) - Proceeds were used according to committed purposes, primarily for project construction (e.g., repayment of Mulei Wind Farm project loans), repayment of maturing debts, etc., with no instances of non-compliant use[407](index=407&type=chunk)[416](index=416&type=chunk)[417](index=417&type=chunk) [Financial Report](index=166&type=section&id=Item%2012.%20Financial%20Report) This section presents the company's audited financial statements, including the audit report, key financial performance indicators, and detailed notes to the financial statements, providing insights into accounting policies, estimates, and financial risks [Audit Report](index=166&type=section&id=Audit%20Report) Deloitte Touche Tohmatsu Certified Public Accountants LLP issued a standard unqualified audit opinion on the company's 2021 financial statements, confirming fair presentation in accordance with accounting standards, with 'amortization of concession rights related to toll roads' identified as a key audit matter due to significant estimates - The auditing firm is **Deloitte Touche Tohmatsu Certified Public Accountants LLP**, which issued a standard unqualified audit opinion[429](index=429&type=chunk)[430](index=430&type=chunk) - A key audit matter is 'amortization of concession rights related to toll roads,' involving significant accounting estimates for predicting total traffic volume over the concession period[433](index=433&type=chunk) [Major Financial Statements](index=170&type=section&id=Major%20Financial%20Statements) Financial statements show steady growth in the company's asset size and profitability, with total assets reaching RMB 60.613 billion (up 9.92%), operating revenue RMB 10.872 billion (up 35.45%), and net profit attributable to parent company shareholders RMB 2.606 billion (up 26.85%), alongside strong operating cash flow Consolidated Balance Sheet Major Items (RMB) | Item | December 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Total Assets | 60,613,494,756.12 | 55,144,962,042.63 | | Total Liabilities | 32,841,718,416.31 | 28,865,852,158.86 | | Total Equity Attributable to Parent Company Owners | 24,638,965,669.92 | 23,042,941,782.92 | Consolidated Income Statement Major Items (RMB) | Item | 2021 Annual | 2020 Annual | | :--- | :--- | :--- | | Total Operating Revenue | 10,871,924,008.52 | 8,026,737,099.99 | | Operating Profit | 3,134,481,421.07 | 2,712,660,568.49 | | Total Profit | 3,178,144,673.41 | 2,709,466,381.23 | | Net Profit Attributable to Parent Company Shareholders | 2,606,254,756.43 | 2,054,523,306.30 | Consolidated Cash Flow Statement Major Items (RMB) | Item | 2021 Annual | 2020 Annual | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 3,941,530,767.73 | 1,100,633,933.07 | | Net Cash Flow from Investing Activities | (5,133,455,901.43) | (4,430,831,833.69) | | Net Cash Flow from Financing Activities | 1,669,296,968.31 | 3,588,278,559.52 | [Notes to Financial Statements (Summary)](index=182&type=section&id=Notes%20to%20Financial%20Statements%20(Summary)) The notes explain financial statement items, including accounting policy adoptions with no material impact, a change in accounting estimate for Changsha Ring Road concession rights, expanded consolidation scope due to acquisitions, segment information highlighting toll business as the primary profit source, and management of foreign exchange and interest rate risks - Accounting Estimate Change: Effective October 1, 2021, the unit amortization amount for Changsha Ring Road concession rights was adjusted from **RMB 5.09/vehicle** to **RMB 2.39/vehicle** due to traffic volume differences, increasing current period net profit attributable to shareholders by approximately **RMB 4.77 million**[568](index=568&type=chunk)[569](index=569&type=chunk)[570](index=570&type=chunk) - Change in Consolidation Scope: During this period, new subsidiaries including Qianzhi Company, Qianhui Company, Qianxin Company, Shanghai Zhuneng, and Ningxia Zhongwei were added through non-common control business combinations[772](index=772&type=chunk) 2021 Annual Segment Financial Information Summary (RMB) | Item | Toll Business | Environmental Business | Other | Total | | :--- | :--- | :--- | :--- | :--- | | External Transaction Revenue | 5,892,744,166.13 | 1,794,627,021.29 | 3,184,552,821.10 | 10,871,924,008.52 | | Total Profit | 2,824,406,477.97 | 312,765,317.91 | (386,093,899.62) | 3,178,144,673.41 |

Financial Performance - The company reported a revenue of 1.5 billion RMB for the first half of 2021, representing a year-on-year increase of 10%[5]. - The company's operating revenue for the first half of 2021 reached RMB 4,211,137,979.84, a significant increase from RMB 1,736,562,664.28 in the same period of 2020, representing a growth of approximately 142.6%[198]. - Net profit attributable to shareholders was RMB 1.22 billion, a significant increase of 2,214.65% from RMB 52.68 million in the previous year[35]. - The total comprehensive income for the first half of 2021 was RMB 1,275,041,603.31, compared to a loss of RMB 36,343,651.26 in the same period of 2020, indicating a significant turnaround[199]. - Basic earnings per share rose to RMB 0.517, compared to RMB 0.024 in the first half of 2020, reflecting a growth of 2,054.17%[36]. - The company's net profit for the first half of 2021 was CNY 73,535 million, accounting for 6.03% of the net profit attributable to shareholders[158]. Revenue Sources - Toll revenue accounted for CNY 2,782 million, contributing 66.06% to the total revenue, while environmental business revenue was CNY 647 million, contributing 15.37%[48]. - Revenue from toll roads increased by 158.68% to 2,782,023 thousand RMB, accounting for 66.06% of total revenue[90]. - Clean energy revenue grew by 51.94% to 346,657 thousand RMB, driven by the inclusion of the Muli wind power project in the consolidated results[91]. Operational Developments - User traffic on the highways increased by 15% compared to the same period last year, indicating a recovery in travel demand[6]. - The company plans to expand its highway network by 200 kilometers over the next three years, aiming to enhance connectivity and accessibility[7]. - New technology initiatives include the implementation of smart toll systems, expected to reduce congestion by 20%[8]. - The company is actively involved in the development of new projects, including the Guizhou Longli City Avenue project, which is being constructed under a capital investment model[17]. Investments and Acquisitions - The company is exploring potential mergers and acquisitions to strengthen its market position and diversify its service offerings[7]. - The acquisition of 100% equity in Shenzhen Investment Control Infrastructure for approximately 2.45 billion HKD (about 2.062 billion RMB) is expected to enhance the company's market share and future profitability[65]. - The company completed the acquisition of 100% equity in three wind power projects in Xinjiang for approximately 1.015 billion yuan, with a total installed capacity of 299 MW[73]. Financial Management - The company has established a financing leasing company to enhance its financial services[21]. - The company’s debt-to-equity ratio and interest coverage ratio are key financial metrics that will be monitored to ensure financial stability[46]. - The company has secured a total bank credit line of RMB 37.148 billion, with an unused credit line of RMB 15.854 billion as of June 30, 2021[127]. Environmental Initiatives - The company is focused on the development of wind power projects, including the Mu Lei wind power project in Xinjiang[19]. - The company is actively exploring investment opportunities in the environmental sector, focusing on solid waste resource management and clean energy[67]. - The company is involved in various infrastructure projects, including the Deep-Shan Environmental Park project, which involves comprehensive management of infrastructure and supporting facilities[17]. Strategic Partnerships - A new partnership with a technology firm aims to enhance digital services for users, projected to increase user engagement by 25%[8]. - The company has established a partnership with China Communications Second Highway Engineering Bureau for various construction projects[17]. Market Expansion - The company is actively expanding its market presence in the Inner Mongolia region, focusing on key cities such as Hohhot and Baotou[18]. - The company is leveraging the EPC model for its engineering projects to ensure quality and efficiency[24]. Corporate Governance - The company has complied with corporate governance practices as per the requirements of both the Shanghai Stock Exchange and the Hong Kong Stock Exchange, with no significant deviations reported[169]. - The company’s board saw changes, including the resignation of two independent directors and the appointment of two new independent directors, reflecting ongoing governance adjustments[184]. Employee Management - As of June 30, 2021, the company had a total of 6,992 employees, including 2,277 management and professional staff, and 4,715 frontline workers[172]. - The company organized 4 training sessions during the reporting period, with a total of 148 employee participations[172].