Financial Performance - The company reported a total revenue of RMB 1.2 billion for the first half of 2021, representing a year-on-year increase of 15%[9]. - The net profit attributable to shareholders was RMB 300 million, up 20% compared to the same period last year[9]. - The company's operating revenue for the first half of the year reached CNY 1,687,650,616.38, representing a 106.10% increase compared to the same period last year[18]. - Net profit attributable to shareholders was CNY 710,265,062.62, a significant increase of 547.64% year-over-year[18]. - The net profit after deducting non-recurring gains and losses was CNY 691,841,524.36, reflecting a 637.13% increase from the previous year[18]. - The net cash flow from operating activities amounted to CNY 964,867,896.11, up 200.68% compared to the same period last year[18]. - Basic earnings per share (EPS) increased to CNY 0.4282, a 547.81% rise from CNY 0.0661 in the same period last year[21]. - The weighted average return on net assets rose to 6.14%, an increase of 5.1 percentage points compared to the previous year[21]. - The company achieved a total profit before income tax of CNY 1,007,450, reflecting a substantial increase from CNY 95,956 in the previous year[28]. - The total profit amounted to RMB 1,008,921 thousand, reflecting a significant year-on-year increase of 930.39%[34]. - The company achieved toll revenue of RMB 1,646,047 thousand in the first half of 2021, a significant increase of 133.78% compared to the same period in 2020[35]. Operational Developments - User data indicates an increase in traffic volume on highways managed by the company, with a 10% rise in average daily traffic[9]. - The company plans to expand its highway network by 200 kilometers over the next two years, aiming to enhance connectivity and accessibility[9]. - New technology initiatives include the implementation of smart toll collection systems, expected to reduce wait times by 30%[9]. - The company has allocated RMB 100 million for research and development of new road safety technologies in 2021[9]. - The company has expanded its operational highway mileage to 557 kilometers and managed a total of 3,825 kilometers of highways[30]. - The company is actively exploring advertising, financial services, and fund investment businesses to enhance profitability[30]. - The company has implemented a high-quality revenue collection strategy, achieving significant improvements in operational efficiency[32]. - The company is focusing on safety management and compliance to ensure smooth traffic flow, especially during major holidays and adverse weather conditions[68]. Financial Position - Total assets at the end of the reporting period were CNY 17,478,510,012.55, a 7.62% increase from the end of the previous year[20]. - Net assets attributable to shareholders increased by 2.92% to CNY 11,605,704,401.65 compared to the previous year[20]. - Cash and cash equivalents increased to ¥4,409,528,266.21, representing 25.23% of total assets, a 92.40% increase compared to the previous year[58]. - The company’s total liabilities as of June 30, 2021, were RMB 5,343,478 thousand, compared to RMB 4,334,693 thousand at the end of 2020, representing an increase of 23.3%[125]. - The company reported a basic and diluted earnings per share of RMB 0.4276 for the first half of 2021, compared to RMB 0.0652 in 2020, indicating a significant improvement in earnings[127]. Corporate Governance - The board of directors has confirmed that all members attended the board meeting, ensuring accountability for the report's accuracy[3]. - The report has not been audited but has been reviewed by the company's audit committee[3]. - The company has not provided any guarantees that violate regulatory decision-making procedures[4]. - The company has maintained good integrity status, with no significant debts or court judgments pending[6]. - The company has complied with the corporate governance code, ensuring high standards of corporate governance to protect shareholder interests[107]. Environmental and Social Responsibility - The company has implemented over 150 ETC dedicated lanes, significantly improving highway traffic efficiency and reducing fuel consumption and emissions[88]. - The company has adopted environmentally friendly snow melting agents, controlling their usage based on snowfall conditions to minimize environmental impact[85]. - The company has established a water collection pool under the Dongpu Reservoir Bridge to prevent wastewater from entering drinking water sources, ensuring compliance with national wastewater discharge standards[85]. - The company has planted over 6,080 trees to reduce highway noise impact on nearby residential areas, investing RMB 408,200 in the initiative[86]. - The company completed the seventh batch of poverty alleviation tasks in Lishuzhuang Village, helping 326 households and 1,097 individuals escape poverty by the end of 2020[88]. - The company conducted 32 charitable activities, providing a total of RMB 28,610 to support vulnerable groups such as elderly individuals and children[4]. Future Outlook - The company anticipates continued growth in toll revenue as economic recovery progresses and traffic demand increases[39]. - The company plans to invest approximately $48.195 million to acquire a 51% stake in a consortium for the Istanbul Third Bridge and North Ring Expressway project[62]. - The company is actively communicating with the government and major shareholders to understand road network planning and project construction progress[66]. - The company is leveraging the national strategy of the Yangtze River Delta integration to improve project performance and mitigate negative impacts on its operations[67].

Financial Performance - The net profit for the year 2020, according to Chinese accounting standards, was RMB 1,070,165 thousand, while under Hong Kong accounting standards, it was RMB 1,069,083 thousand[4]. - The distributable profit for shareholders for 2020 was RMB 1,069,083 thousand, with a proposed cash dividend of RMB 2.3 per 10 shares, totaling RMB 381,480.30 thousand[4]. - The company did not allocate any statutory surplus reserve for the year as the accumulated surplus reserve has reached over 50% of the total share capital[4]. - The total number of shares for dividend distribution is 1,658,610,000 shares[4]. - The net profit attributable to shareholders was CNY 918,480,418.11, down 16.32% from CNY 1,097,546,191.64 in the previous year[19]. - The basic earnings per share for 2020 was CNY 0.5538, a decrease of 16.31% from CNY 0.6617 in 2019[21]. - The weighted average return on equity decreased by 2.21 percentage points to 8.37% in 2020 from 10.58% in 2019[21]. - The company reported a pre-tax profit of CNY 1,245,972,000 in 2020, down from CNY 1,550,142,000 in 2019[22]. - The company reported a total revenue of RMB 174,468.63 thousand, reflecting a year-on-year decline of 21.76%[35]. - Net profit for the company was RMB 41,492.46 thousand, showing a significant decrease of 50.72% compared to the previous year[35]. - The company achieved a significant operational rebound in the second half of the year after a noticeable decline in the first half due to the pandemic and policy-related toll fee reductions[39]. Assets and Liabilities - As of the end of 2020, the total assets amounted to CNY 16,240,743,095.33, an increase of 2.01% from CNY 15,920,011,667.90 at the end of 2019[20]. - The net assets attributable to shareholders increased by 5.02% to CNY 11,276,709,422.09 from CNY 10,737,909,003.94 in 2019[20]. - The company's total liabilities as of December 31, 2020, were RMB 4,334,693,000, a slight decrease of 0.6% from RMB 4,360,855,000 in 2019[23]. - The asset-liability ratio of the company stands at 28.25%[35]. - The company's trading financial assets increased by 161.53% to RMB 1,104,490,547.95 from RMB 422,316,986.30 year-on-year, primarily due to the purchase of floating-rate bank structured deposits[37]. - Long-term payables rose by 33.22% to RMB 522,905,699.32 from RMB 392,499,619.04 in the previous year, primarily due to increased borrowings from minority shareholders[73]. Cash Flow - The net cash flow from operating activities was CNY 1,703,936,939.19, reflecting a decrease of 6.52% compared to CNY 1,822,702,104.07 in 2019[19]. - The company reported a net cash flow from operating activities of RMB 591,250,244.21 in Q4 2020, indicating strong cash generation capabilities[27]. - The cash flow from operating activities decreased by 6.52% to RMB 1,703,936,939.19 from RMB 1,822,702,104.07 in the previous year[59]. Dividends and Profit Distribution - The company has maintained a cash dividend policy for 24 consecutive years, with a cash dividend of RMB 2.30 per share for 2020, amounting to RMB 381,480.30 thousand, representing 41.53% of the net profit[113][115]. - The profit distribution plan for 2020 complies with the company's articles of association, with independent directors providing opinions on the relevant factors[113]. - The company has established a mechanism for profit distribution decision-making that considers sustainable development and shareholder interests[113]. Governance and Compliance - The company has confirmed that there are no non-operational fund occupations by controlling shareholders or related parties[6]. - The company assures the accuracy and completeness of the annual report and financial statements[3]. - The company has maintained a good integrity status during the reporting period, with no significant debts or court judgments outstanding[119]. - The company has established a robust internal regulatory framework related to ESG and has conducted interviews to assess significant issues[101]. - The company has adopted the Corporate Governance Code and has no discrepancies with the requirements set by the China Securities Regulatory Commission[199]. Strategic Focus and Future Plans - The company plans to focus on market expansion and new technology development in the upcoming fiscal year[1]. - The company is exploring advertising, financial services, and fund investment businesses to expand its profit margins[33]. - The company is actively enhancing its governance capabilities by revising key internal regulations and completing the election of the ninth board of directors and supervisors[43]. - The company is focusing on diversification and transformation as a strategic choice due to declining investment returns in the toll road sector[76]. - The company aims to establish itself as a leading highway operation management platform and capital operation platform during the "14th Five-Year Plan" period[90]. Challenges and Risks - The company is facing challenges such as slow growth in traffic volume and the approaching expiration of toll collection periods on core routes, which may impact sustainable development[45]. - The company is sensitive to macroeconomic fluctuations, which can directly affect traffic flow and toll revenue[97]. - The company faces policy risks related to toll pricing and potential changes in government regulations affecting revenue[95]. - The company is at risk of losing its concession rights as existing highway operating periods approach maturity, which could impact sustainable development[96]. Social Responsibility and Community Engagement - The company has actively participated in poverty alleviation and rural revitalization efforts, receiving high praise from various sectors of society[101]. - The company provided over RMB 3 million in rent reductions for small and micro enterprises and donated RMB 5 million to support local pandemic prevention efforts[40]. - The company has implemented a 100% recycling rate for road waste on its highways, enhancing its green maintenance practices[148]. - The company has been recognized as an advanced collective in the national transportation system's fight against COVID-19[40]. Shareholder Information - The total number of ordinary shares issued by the company is 1,658,610,000, with 1,165,600,000 A-shares listed on the Shanghai Stock Exchange, accounting for approximately 70.28% of total shares, and 493,010,000 H-shares listed on the Hong Kong Stock Exchange, accounting for about 29.72%[154]. - The largest shareholder, Anhui Transportation Holding Group Co., Ltd., holds 524,644,220 shares, representing 31.63% of total shares[157]. - The top three shareholders collectively hold 80.42% of the company's shares, indicating a high concentration of ownership[157]. Management and Leadership - The company has a total of 2,079 employees, with 1,441 in the parent company and 638 in major subsidiaries[188]. - The company has a diverse management team with expertise in finance, engineering, and law, including professionals like Huang Yu, who became the CFO on January 22, 2021[177]. - The company has not granted any stock incentives to directors or senior management during the reporting period[179]. - The company has maintained a focus on aligning executive pay with market standards and operational performance[183].

Financial Performance - Total revenue for Q1 2021 reached RMB 847,416,635.46, a significant increase of 211.10% compared to RMB 272,395,967.64 in the same period last year[9] - Net profit attributable to shareholders was RMB 352,142,964.39, a turnaround from a loss of RMB 26,142,369.46 in Q1 2020[9] - The company's operating revenue for Q1 2021 reached RMB 847,416,635.46, a significant increase of 211.10% compared to RMB 272,395,967.64 in the same period last year[11] - The profit before tax saw a dramatic rise, with income tax expenses increasing by 1460.69% to RMB 140,227,010.25 from RMB 8,984,957.27 year-on-year[11] - The company reported operating profit of ¥501,718,224.51 for Q1 2021, a significant improvement from an operating loss of ¥65,555,942.61 in Q1 2020[34] - The total comprehensive income for Q1 2021 was ¥361,750,059.36, compared to a loss of ¥74,644,915.58 in the same quarter of the previous year[35] - The net profit for Q1 2021 reached ¥324,441,601.27, compared to ¥17,003,706.19 in Q1 2020, indicating a substantial increase of about 1,810%[36] - The company's total profit for Q1 2021 was ¥429,187,647.60, a substantial increase from ¥19,443,264.16 in Q1 2020, reflecting a growth of approximately 2,108%[36] Cash Flow and Liquidity - Operating cash flow for the period was RMB 513,206,269.59, up 237.50% from RMB 152,060,872.22 year-on-year[4] - Cash received from sales and services amounted to RMB 814,758,091.23, reflecting a 133.44% increase from RMB 349,019,574.22 in the previous year[12] - Cash received from borrowings surged by 418.06% to RMB 1,660,000,000.00, reflecting significant new bank loans acquired during the reporting period[12] - The company’s cash and cash equivalents decreased to RMB 2.12 billion from RMB 2.29 billion year-over-year[29] - The company’s cash and cash equivalents decreased to ¥1,813,845,366.51 from ¥2,040,183,790.27, indicating a reduction in cash reserves[32] - The cash flow from operating activities for Q1 2021 was ¥513,206,269.59, up from ¥152,060,872.22 in Q1 2020, reflecting an increase of approximately 237%[38] - The company reported a significant increase in cash and cash equivalents, with a balance of ¥1,191,973,238.49 at the end of Q1 2021, compared to ¥687,283,290.59 at the end of Q1 2020[38] Assets and Liabilities - Total assets increased to RMB 17,338,820,334.97, reflecting a growth of 6.76% from RMB 16,240,743,095.33 at the end of the previous year[4] - As of March 31, 2021, the total assets amounted to RMB 17.34 billion, an increase from RMB 16.24 billion at the end of 2020[30] - The total liabilities increased to RMB 5.06 billion as of March 31, 2021, compared to RMB 4.33 billion at the end of 2020[30] - Total liabilities decreased to ¥1,953,685,550.31 from ¥2,031,110,916.13 at the end of 2020, reflecting improved financial stability[32] - Current assets increased to ¥4,514,983,027.28 from ¥3,277,386,435.65 year-over-year, showing strong liquidity position[32] Shareholder Information - The number of shareholders at the end of the reporting period was 27,849, with the top three shareholders holding a combined 85.24% of shares[6][7] - The company’s total equity increased to ¥12,574,072,377.83 from ¥12,249,517,741.19, reflecting growth in shareholder value[32] Revenue Sources - Toll revenue from the He-Ning Expressway increased by 237.04% to RMB 36,767,000, compared to RMB 85,783,000 in the same period last year[13] - The company anticipates continued growth in toll revenue due to the completion of infrastructure projects and increased traffic flow post-pandemic[16][20] - The company reported a significant increase in toll revenue expected in 2021 due to the recovery of regional transportation and logistics demand[27] Expenses and Investments - Management expenses rose by 50.95% to RMB 29,333,642.56, primarily due to an increase in personnel and social security costs[11] - The company incurred a financial expense of -¥21,915,016.17 in Q1 2021, an improvement from -¥27,272,728.52 in Q1 2020, indicating a reduction in financial costs[36] - The company received investment income of ¥9,893,822.92 in Q1 2021, compared to ¥7,393,552.76 in Q1 2020, showing an increase of approximately 34%[36] - The cash inflow from investment activities in Q1 2021 was ¥905,523,293.83, a significant rise from ¥58,488,378.70 in Q1 2020[39] - The company reported a cash outflow from investment activities of ¥2,145,421,316.06 in Q1 2021, compared to ¥1,590,817,771.25 in Q1 2020, indicating an increase in investment expenditures[39] Future Outlook - The company anticipates continued growth in revenue and profitability as the impact of the COVID-19 pandemic diminishes[9] - The company plans to continue supporting the acquisition of quality highway assets from Anhui Communications Control Group[25] - The company has committed to not engaging in any business activities that may compete directly or indirectly with its operations[26]

Financial Performance - The company reported a significant increase in revenue, achieving a total of RMB 1.2 billion for the first half of 2020, representing a year-on-year growth of 15%[9]. - The company's operating revenue for the first half of 2020 was CNY 818.87 million, a decrease of 44.20% compared to CNY 1,467.50 million in the same period last year[19]. - Net profit attributable to shareholders for the same period was CNY 109.67 million, down 79.98% from CNY 547.88 million year-on-year[19]. - The basic earnings per share decreased to CNY 0.0661, a decline of 79.99% compared to CNY 0.3303 in the previous year[21]. - The net cash flow from operating activities was CNY 320.90 million, representing a decrease of 65.70% from CNY 935.51 million in the same period last year[19]. - The company reported a significant drop in pre-tax profit, which was CNY 95.96 million, down 87.34% from CNY 757.66 million in the previous year[32]. - The company’s weighted average return on net assets decreased to 1.04%, down 4.29 percentage points from 5.33% in the previous year[21]. - The company’s diluted earnings per share were CNY 0.0661, reflecting a decrease of 79.99% compared to the previous year[21]. - The company reported a total operating revenue of RMB 818,868 thousand for the first half of 2020, a decrease of 44.20% compared to RMB 1,467,501 thousand in the same period of 2019[43]. - The total profit for the period was RMB 97,916 thousand, down 87.17% from RMB 763,349 thousand in the previous year[43]. Traffic and Toll Revenue - User data showed an increase in traffic volume on the expressways, with an average daily traffic of 1.5 million vehicles, up 10% compared to the same period last year[9]. - Toll revenue for the first half of 2020 was RMB 704,096 thousand, a significant drop of 48.05% compared to RMB 1,355,353 thousand in the same period last year[44]. - The average daily traffic volume and toll revenue for all highways operated by the company showed a growth trend from May 6 to June 30, 2020, following the resumption of toll collection[47]. - The Hefei-Nanjing Expressway experienced a toll revenue increase of 23.93% and 37.41% in May and June 2020, respectively, due to the local economic recovery[48]. - The Ninghuai Expressway's toll revenue increased by 6.75% and 13.13% in May and June 2020, respectively, as traffic volume began to recover[52]. Future Outlook and Strategy - The company has outlined its future outlook, projecting a revenue growth of 12% for the next fiscal year, driven by ongoing infrastructure projects and increased traffic[9]. - The company is expanding its market presence by entering into partnerships with local governments to develop new expressway projects, targeting an additional 300 kilometers of road by 2025[9]. - There are no plans for significant mergers or acquisitions in the near term, focusing instead on organic growth and internal improvements[9]. - The company has implemented new strategies to enhance customer experience, including mobile app upgrades that have increased user engagement by 25%[9]. - The company plans to invest $48.195 million to acquire a 51% stake in the Istanbul Third Bridge and North Ring Expressway project, with a 7% share in the consortium[71]. Financial Stability and Assets - The company has maintained a strong balance sheet, with total assets reported at RMB 5 billion, ensuring financial stability for future investments[9]. - Total assets as of June 30, 2020, were CNY 16.04 billion, an increase of 0.73% from CNY 15.92 billion at the end of the previous year[20]. - The company's net assets attributable to shareholders were CNY 10.47 billion, down 2.53% from CNY 10.74 billion at the beginning of the year[20]. - Total liabilities increased by 13.90% to RMB 4,966,869 thousand from RMB 4,360,855 thousand[33]. - The company’s asset-liability ratio stood at 27.31% as of June 30, 2020[35]. Risk Factors and Challenges - Risk factors related to future operations have been identified, including potential regulatory changes and economic fluctuations, which are detailed in the management discussion section[4]. - The company is facing considerable uncertainty regarding its operational performance for the remainder of the year due to ongoing policy impacts from the pandemic[74]. - The company's main business revenue growth space has narrowed due to increased parallel and alternative routes, negatively impacting toll revenue[76]. Social Responsibility and Community Engagement - The company donated RMB 5 million to support COVID-19 prevention efforts and organized voluntary donations totaling RMB 67,370 from its employees[41]. - During the reporting period, the company engaged in poverty alleviation efforts, including purchasing agricultural products worth RMB 24,510 to support local farmers[103]. - The company has invested a total of RMB 244.331 million in poverty alleviation efforts, with RMB 203.713 million specifically allocated to industry development projects[104]. - A total of 551 registered impoverished individuals were helped to escape poverty, with 321 households and 1,085 individuals lifted out of poverty by the end of 2019, resulting in a poverty incidence rate of 0.33%[106]. Governance and Compliance - The board of directors has confirmed that there are no non-operational fund occupations by controlling shareholders, ensuring transparency and accountability[3]. - The company has maintained compliance with corporate governance standards and has improved its governance mechanisms to enhance transparency and protect shareholder interests[117]. - The company continues to employ PwC and Deloitte as auditors for the 2020 fiscal year, ensuring compliance with auditing standards[89]. - No significant litigation or arbitration matters were reported during the reporting period, indicating a stable legal environment for the company[89]. Employee and Management - The company reported a total of 2,098 employees as of June 30, 2020, a decrease from 2,223 employees on June 30, 2019[138]. - Employee compensation for the reporting period was RMB 158.51 million, down from RMB 171.59 million in the first half of 2019, representing a decrease of approximately 7.5%[138]. - The company has implemented a broad salary system linked to job value and performance, enhancing employee motivation[138]. Environmental and Operational Efficiency - The company has implemented green practices in road maintenance, including 100% recycling of 1,000 cubic meters of road milling materials[110]. - The company plans to enhance highway operation management and control after the cancellation of provincial boundary toll stations[79]. - The company aims to improve emergency response plans and enhance the efficiency of emergency handling to ensure smooth traffic flow[80].

Financial Performance - The company's operating revenue for the first half of 2020 was approximately ¥818.87 million, a decrease of 44.20% compared to ¥1.47 billion in the same period last year[20] - The net profit attributable to shareholders for the first half of 2020 was approximately ¥109.67 million, down 79.98% from ¥547.88 million in the previous year[20] - The net cash flow from operating activities was approximately ¥320.90 million, a decline of 65.70% compared to ¥935.51 million in the same period last year[20] - The basic earnings per share for the first half of 2020 was ¥0.0661, a decrease of 79.99% from ¥0.3303 in the same period last year[21] - The total profit for the period was RMB 97,916 thousand, down 87.17% from RMB 763,349 thousand in the previous year[47] - The company reported a significant decline in operating income, which was RMB 818,868,119.89, down 44.20% from RMB 1,467,501,106.08 year-on-year[64] - The company experienced a 65.70% decrease in cash flow from operating activities, amounting to RMB 320,895,649.05 compared to RMB 935,505,582.63 in the previous year[64] - The company reported a net profit margin decline, reflecting the challenging market conditions impacting overall profitability[180] Assets and Liabilities - The total assets at the end of the reporting period were approximately ¥16.04 billion, an increase of 0.73% from ¥15.92 billion at the end of the previous year[20] - The total liabilities increased by 13.90% to RMB 4,966,869,000 from RMB 4,360,855,000[32] - The net assets attributable to shareholders at the end of the reporting period were approximately ¥10.47 billion, a decrease of 2.53% from ¥10.74 billion at the end of the previous year[20] - The company's total current assets reached CNY 3,147,932,185.84, up from CNY 2,744,428,474.34 in December 2019, reflecting a growth of approximately 14.7%[171] - The total liabilities increased to CNY 4,958,099,432.53 from CNY 4,350,269,318.36, representing an increase of about 13.9%[173] - The company's cash and cash equivalents decreased to CNY 1,760,431,780.79 from CNY 2,113,750,095.72, a decline of approximately 16.7%[171] Government Support and Subsidies - The company received government subsidies amounting to RMB 1,814,550.33, which are related to asset construction[27] Operational Strategies and Initiatives - The company is exploring advertising, financial services, and fund investment businesses to expand its profit sources[36] - The company has implemented a comprehensive safety management strategy during the pandemic, ensuring operational continuity and safety measures[45] - The company has initiated a project to enhance its information technology systems, including video monitoring and weather condition monitoring systems[45] - The company plans to enhance highway operation and maintenance levels in the second half of the year, focusing on toll collection and network management[94] - The company will actively adapt to the changes in operation management systems post the removal of provincial toll stations, aiming to increase revenue collection[94] Social Responsibility and Community Engagement - The company has invested RMB 203.713 million in eight poverty alleviation projects, helping 230 registered poor households to escape poverty[120] - The company has conducted vocational training for 50 individuals, helping 15 registered poor households achieve employment[120] - The company has actively engaged in social responsibility initiatives, including infrastructure construction and educational support in rural areas[116] Corporate Governance - The company has maintained a high standard of corporate governance, ensuring transparency and protection of shareholder rights[137] - The board of directors has established a comprehensive internal control system to safeguard shareholder investments and company assets[144] - The company has adopted a code of conduct for securities trading by directors and supervisors, in compliance with the Hong Kong Stock Exchange regulations[143] Employee Management - As of June 30, 2020, the company had a total of 2,098 employees, a decrease from 2,223 employees on June 30, 2019[165] - Employee compensation for the reporting period was RMB 158.51 million, down from RMB 171.59 million in the same period of 2019[165] - The company encourages online learning and self-study among employees due to the COVID-19 pandemic[166] Future Outlook and Challenges - The company anticipates significant uncertainty in its operating performance due to the impact of the pandemic and related policies on net profit[88] - The macroeconomic environment and industry policy changes pose risks to the company's performance, particularly in the toll road sector[89] - The company's main business revenue growth space is narrowing due to increased parallel and alternative routes affecting toll income negatively[91] - The company faces significant challenges to sustainable development as the concession periods for most highway assets are nearing expiration[92]

[Important Notice](index=3&type=section&id=Important%20Notice) This section confirms the authenticity and completeness of the annual report by the board, supervisory board, and senior management, noting a standard unqualified audit opinion and no non-operating fund occupation or irregular guarantees [Overview](index=3&type=section&id=Overview) This section confirms the authenticity and completeness of the annual report by the board, supervisory board, and senior management, noting a standard unqualified audit opinion and no non-operating fund occupation or irregular guarantees - Company's Board of Directors, Supervisory Board, and senior management guarantee the annual report's content is true, accurate, and complete, free from false records, misleading statements, or major omissions[4](index=4&type=chunk) - PwC Zhongtian and PricewaterhouseCoopers issued a standard unqualified audit opinion for the consolidated financial statements[4](index=4&type=chunk) - Company's responsible person Xiang Xiaolong, chief accountant Xu Zhen, and head of accounting department Qian Juanfeng declare the financial report is true, accurate, and complete[4](index=4&type=chunk) - There is no non-operating occupation of funds by the controlling shareholder or its related parties[8](index=8&type=chunk) - There are no external guarantees provided in violation of prescribed decision-making procedures[8](index=8&type=chunk) [Profit Distribution Plan](index=3&type=section&id=Profit%20Distribution%20Plan) The company proposes a cash dividend of RMB 2.3 per 10 shares (tax inclusive) for 2019, totaling RMB 381.48 million, based on distributable profits of RMB 1.24 billion under HKFRS, with no capital reserve conversion 2019 Annual Profit Distribution Plan | Indicator | Amount (thousand yuan) | | :--- | :--- | | Net profit under PRC GAAP | 1,251,643 | | Annual profit under HKFRS | 1,239,823 | | Distributable profit (lower of the two) | 1,239,823 | | Cash dividend per 10 shares (tax inclusive) | 2.3 yuan | | Total dividend distributed | 381,480.30 | | Capital reserve conversion plan | Not implemented | [Risk Warning](index=3&type=section&id=Risk%20Warning) The report details significant risks, primarily in Section IV "Board of Directors' Report" under "Management Discussion and Analysis of Operations," advising investors to exercise caution - Forward-looking statements in this report, such as future plans and development strategies, do not constitute a commitment to investors; investors are advised to invest rationally and be aware of investment risks[6](index=6&type=chunk) - Significant risk warnings are detailed in Section IV "Board of Directors' Report," under "Management Discussion and Analysis of Operations," specifically in the part discussing potential risk factors and countermeasures for the company's future development[8](index=8&type=chunk) [Section I Definitions](index=4&type=section&id=Section%20I%20Definitions) This section defines key terms used throughout the report, including the company, group, related parties, regulatory bodies, reporting period, and main business entities, to ensure clear understanding [Definitions of Key Terms](index=5&type=section&id=Definitions%20of%20Key%20Terms) This section defines key terms used throughout the report, including the company, group, related parties, regulatory bodies, reporting period, and main business entities, to ensure clear understanding - "The Company" or "Company" refers to Anhui Expressway Company Limited[10](index=10&type=chunk) - "The Group" refers to the Company, its subsidiaries, and associates collectively[10](index=10&type=chunk) - "Anhui Transportation Holding Group" refers to Anhui Transportation Holding Group Co., Ltd. (formerly Anhui Expressway Holding Group Co., Ltd. and Anhui Expressway General Company)[10](index=10&type=chunk) - "Reporting Period" refers to the year ended December 31, 2019[10](index=10&type=chunk) [Section II Company Profile and Key Financial Indicators](index=7&type=section&id=Section%20II%20Company%20Profile%20and%20Key%20Financial%20Indicators) This section provides the company's basic information, including names, legal representative, contact details, listing information, and key financial data and indicators for recent years [Company Basic Information](index=7&type=section&id=Company%20Basic%20Information) This section details the company's names, legal representative, contact information, registered and office addresses, listing exchanges for A and H shares, and appointed domestic and overseas accounting firms - Company's full Chinese name: Anhui Expressway Company Limited, abbreviation: Wantong Expressway; full English name: Anhui Expressway Company Limited, abbreviation: Anhui Expressway[13](index=13&type=chunk) - Legal Representative: Xiang Xiaolong[13](index=13&type=chunk) - The company's A-shares are listed on the Shanghai Stock Exchange (stock code: 600012), and H-shares are listed on The Stock Exchange of Hong Kong Limited (stock code: 0995)[18](index=18&type=chunk) - The company appointed PwC Zhongtian Certified Public Accountants (Special General Partnership) as its domestic accounting firm and PricewaterhouseCoopers as its overseas accounting firm[18](index=18&type=chunk) [Key Accounting Data and Financial Indicators in Recent Years](index=9&type=section&id=Key%20Accounting%20Data%20and%20Financial%20Indicators%20in%20Recent%20Years) In 2019, the company's operating revenue decreased by 0.69% to RMB 2.95 billion, and net profit attributable to shareholders decreased by 2.27% to RMB 1.10 billion under PRC GAAP, while HKFRS revenue grew by 19.73% to RMB 4.64 billion 2019 Key Accounting Data (under PRC GAAP) | Indicator | 2019 (yuan) | 2018 (yuan) | Period-on-period change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 2,946,420,820.29 | 2,966,948,529.24 | -0.69 | | Net Profit Attributable to Shareholders of Listed Company | 1,097,546,191.64 | 1,123,042,225.39 | -2.27 | | Net Cash Flow from Operating Activities | 1,822,702,104.07 | 1,807,617,059.70 | 0.83 | | Net Assets Attributable to Shareholders of Listed Company (period-end) | 10,737,909,003.94 | 10,069,996,981.61 | 6.63 | | Total Assets (period-end) | 15,920,011,667.90 | 14,780,287,813.81 | 7.71 | 2019 Key Financial Indicators (under PRC GAAP) | Indicator | 2019 | 2018 | Period-on-period change (%) | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (yuan/share) | 0.6617 | 0.6771 | -2.27 | | Weighted Average Return on Net Assets (%) | 10.58 | 11.56 | Decreased by 0.98 percentage points | 2019 Performance Summary (under HKFRS) | Indicator | 2019 (thousand yuan) | 2018 (thousand yuan) | | :--- | :--- | :--- | | Revenue | 4,640,431 | 3,875,803 | | Profit before tax | 1,550,142 | 1,537,528 | | Profit attributable to owners of the Company | 1,089,855 | 1,115,361 | | Basic earnings per share (RMB yuan) | 0.6571 | 0.6725 | - Under HKFRS, 2019 revenue increased by **19.73%**, primarily due to growth in construction contract revenue[23](index=23&type=chunk)[44](index=44&type=chunk) [Differences in Accounting Data under Domestic and Overseas Accounting Standards](index=11&type=section&id=Differences%20in%20Accounting%20Data%20under%20Domestic%20and%20Overseas%20Accounting%20Standards) Differences in net profit and net assets under domestic and overseas accounting standards primarily stem from higher valuations of toll road concessions, fixed assets, and land use rights by international appraisers in 1996 for H-share listing Differences in Net Profit and Net Assets under Domestic and Overseas Accounting Standards (thousand yuan) | Indicator | Under PRC GAAP | Asset valuation, depreciation/amortization, and related deferred tax | Under Overseas Accounting Standards | | :--- | :--- | :--- | :--- | | Net profit for the current period | 1,097,546 | -7,691 | 1,089,855 | | Net profit for the prior period | 1,123,042 | -7,681 | 1,115,361 | | Net assets attributable to shareholders of listed company (period-end) | 10,737,909 | 40,390 | 10,778,299 | | Net assets attributable to shareholders of listed company (period-start) | 10,069,997 | 48,677 | 10,118,674 | - The differences primarily arise from the higher valuation of toll road concessions, fixed assets, and land use rights by international asset appraisers compared to Chinese appraisers in 1996 for the H-share listing, impacting depreciation/amortization and related deferred taxes[25](index=25&type=chunk) [Key Quarterly Financial Data for 2019](index=12&type=section&id=Key%20Quarterly%20Financial%20Data%20for%202019) Quarterly financial data for 2019 shows fluctuations in operating revenue and net profit attributable to shareholders, with the third quarter performing relatively better, and operating cash flow also exhibiting quarterly variations 2019 Key Quarterly Financial Data (under PRC GAAP, unit: yuan) | Indicator | Q1 (Jan-Mar) | Q2 (Apr-Jun) | Q3 (Jul-Sep) | Q4 (Oct-Dec) | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 749,910,855.39 | 717,590,250.69 | 762,277,103.12 | 716,642,611.09 | | Net Profit Attributable to Shareholders of Listed Company | 289,033,267.30 | 258,842,401.25 | 297,664,095.55 | 252,006,427.54 | | Net Cash Flow from Operating Activities | 496,154,226.07 | 439,351,356.56 | 530,057,611.41 | 357,138,910.03 | [Non-Recurring Gains and Losses Items and Amounts](index=12&type=section&id=Non-Recurring%20Gains%20and%20Losses%20Items%20and%20Amounts) In 2019, the company's non-recurring gains and losses totaled RMB 12.74 million, a significant increase from 2018, primarily driven by fair value changes from trading financial assets and other non-operating income and expenses 2019 Non-Recurring Gains and Losses Items and Amounts (under PRC GAAP, unit: yuan) | Non-Recurring Gains and Losses Item | 2019 Amount | 2018 Amount | 2017 Amount | | :--- | :--- | :--- | :--- | | Gains or losses on disposal of non-current assets | -210,413.99 | -31,483.55 | -2,462,459.48 | | Government grants recognized in current profit or loss | 2,633,445.68 | 2,477,442.35 | 5,474,674.48 | | Fair value changes and investment income from trading financial assets, derivative financial assets, etc. | 11,891,005.50 | 0.00 | 0.00 | | Other non-operating income and expenses apart from the above | 4,344,035.91 | 550,161.24 | 303,001.14 | | Total | 12,739,248.60 | 2,330,360.40 | -10,134,168.22 | - The total non-recurring gains and losses for 2019 amounted to RMB **12.74 million**, a significant increase from 2018[28](index=28&type=chunk) - This was mainly due to income from floating-rate structured deposits purchased from banks, recognized as fair value change gains of **11.89 million yuan**[28](index=28&type=chunk) [Items Measured at Fair Value](index=13&type=section&id=Items%20Measured%20at%20Fair%20Value) As of the end of 2019, items measured at fair value totaled RMB 737.85 million, a substantial increase from the beginning of the period, mainly due to structured deposits classified as trading financial assets 2019 Items Measured at Fair Value (unit: yuan) | Project Name | Beginning Balance | Ending Balance | Current Period Change | Impact on Current Period Profit | | :--- | :--- | :--- | :--- | :--- | | Other equity instrument investments | 336,299,364.67 | 315,530,888.10 | -20,768,476.57 | 0.00 | | Trading financial assets - structured deposits | 0.00 | 422,316,986.30 | 422,316,986.30 | 11,891,005.50 | | Total | 336,299,364.67 | 737,847,874.40 | 401,548,509.73 | 11,891,005.50 | - The ending balance of trading financial assets—structured deposits was **422.32 million yuan**, impacting current period profit by **11.89 million yuan**[29](index=29&type=chunk) [Company Background](index=14&type=section&id=Company%20Background) Anhui Expressway Company Limited, established in Anhui, China on August 15, 1996, with a registered capital of RMB 1.66 billion, primarily operates and manages toll roads, being the first Chinese highway company listed in Hong Kong - The Company was established on August 15, 1996, in Anhui Province, People's Republic of China, with a registered capital of RMB **1.66 billion yuan**[30](index=30&type=chunk) - The Company primarily engages in the operation and management of toll roads and related businesses[30](index=30&type=chunk) - The Company is the first highway company listed in Hong Kong and the only listed highway company in Anhui Province[30](index=30&type=chunk) - H-shares were listed on The Stock Exchange of Hong Kong Limited (code: 0995) on November 13, 1996, and A-shares were listed on the Shanghai Stock Exchange (code: 600012) on January 7, 2003[30](index=30&type=chunk) [Section III Business Overview](index=15&type=section&id=Section%20III%20Business%20Overview) This section outlines the company's core business of investing, constructing, operating, and managing toll roads in Anhui, its operating model, and the industry landscape, including challenges and opportunities [Description of Company's Main Business, Operating Model, and Industry Situation During the Reporting Period](index=15&type=section&id=Description%20of%20Company's%20Main%20Business,%20Operating%20Model,%20and%20Industry%20Situation%20During%20the%20Reporting%20Period) The company's core business involves investing, constructing, operating, and managing 557 kilometers of toll roads in Anhui, with total assets of RMB 15.92 billion, while also exploring diversified businesses and adapting to industry policy changes - The company's main business is investing, constructing, operating, and managing certain toll roads within Anhui Province, providing passage services to vehicles by collecting tolls[33](index=33&type=chunk) - As of December 31, 2019, the company's operational highway mileage reached **557 kilometers**, with total assets of approximately RMB **15.92 billion yuan**[33](index=33&type=chunk) - The company also provides entrusted management services for certain road sections to Anhui Transportation Holding Group and its subsidiaries, managing a total expressway mileage of **707 kilometers**[33](index=33&type=chunk) - The Group actively explores businesses such as expressway roadside advertising, quasi-financial services, and fund investments to expand its profit margins[33](index=33&type=chunk) - The company operates under a toll road business model, with the industry entering a stable development phase, focusing on parallel route densification, regional expressway connections, smart transportation popularization, and traffic information industrialization[34](index=34&type=chunk) - The "Toll Road Management Regulations" have not yet been officially promulgated, leaving industry policies uncertain; the cancellation of provincial border toll stations and promotion of ETC will bring fundamental changes to the industry's operating management model[34](index=34&type=chunk) [Explanation of Significant Changes in Company's Major Assets During the Reporting Period](index=17&type=section&id=Explanation%20of%20Significant%20Changes%20in%20Company's%20Major%20Assets%20During%20the%20Reporting%20Period) During the reporting period, significant asset changes included a 44.34% decrease in construction in progress due to reclassification, a 92.22% increase in accounts payable, and substantial reductions in long-term payables and deferred tax liabilities due to debt-to-equity conversion Major Asset and Liability Changes (unit: yuan) | Item | December 31, 2019 | December 31, 2018 | Change (%) | Explanation of Change | | :--- | :--- | :--- | :--- | :--- | | Construction in progress | 71,255,879.88 | 128,028,388.34 | -44.34 | Primarily due to the reclassification of Longtang toll station expansion project to fixed assets at the end of the reporting period | | Accounts payable | 1,210,422,954.45 | 629,705,853.96 | 92.22 | Primarily due to increased payables for the Hening Expressway expansion project during the reporting period | | Long-term payables | 392,499,619.04 | 1,079,788,259.52 | -63.65 | Primarily due to Ningxuanhang Company's debt-to-capital reserve conversion and repayment of minority shareholder loans during the reporting period | | Deferred tax liabilities | 15,153,898.32 | 96,381,915.99 | -84.28 | Primarily due to Ningxuanhang Company's debt-to-capital reserve conversion during the reporting period | | Minority interests | 831,833,345.60 | 511,101,971.26 | 62.75 | Primarily due to Ningxuanhang Company's debt-to-capital reserve conversion during the reporting period | - Overseas assets amounted to RMB **2.04 million yuan**, accounting for **0.01%** of total assets[37](index=37&type=chunk) [Analysis of Core Competitiveness During the Reporting Period](index=18&type=section&id=Analysis%20of%20Core%20Competitiveness%20During%20the%20Reporting%20Period) The company's core competitiveness stems from its advantageous geographical location, stable financial performance, strong credit rating, low debt-to-asset ratio, and a positive market image built on transparent information disclosure and consistent high cash dividends - The Group's core business is the concession operation of transportation infrastructure, with its operating area located in Anhui Province, enjoying a superior geographical location and significant regional advantages, benefiting from the national "Yangtze River Delta Integration" strategy and "Yangtze River Economic Belt" development strategy[38](index=38&type=chunk) - The company's performance is excellent and stable, with a high credit rating, low asset-liability ratio, and strong solvency, providing effective guarantees for future equity financing and capital operations[38](index=38&type=chunk) - The company's information disclosure is sufficient, fair, and compliant, and it consistently adheres to a high cash dividend policy, establishing a stable investor base and a good market image in both domestic and overseas capital markets[38](index=38&type=chunk) [Section IV Board of Directors' Report](index=20&type=section&id=Section%20IV%20Board%20of%20Directors'%20Report) This section details the company's operational performance, strategic implementation, investment activities, and governance, while also acknowledging challenges such as slowing traffic growth and the impact of the COVID-19 pandemic [Management Discussion and Analysis of Operations](index=20&type=section&id=Management%20Discussion%20and%20Analysis%20of%20Operations) The company successfully implemented its "1123" development strategy, completing the Hening Expressway expansion, enhancing operational digitalization, and making progress in overseas investments, despite facing economic headwinds and the COVID-19 pandemic - The company deeply implemented the "1123" development strategy, and various targets and tasks were basically completed[39](index=39&type=chunk) - The Hening Expressway expansion project was fully completed and put into operation with eight lanes; during the reporting period, an investment of RMB **1.72 billion yuan** was completed, with a cumulative investment of **3.65 billion yuan**[40](index=40&type=chunk) - Operational informatization achieved full coverage, increasing the proportion of independent maintenance of mechanical and electrical equipment, and improving the one-time pass rate of ETC lanes[40](index=40&type=chunk) - The work of canceling provincial border toll stations was largely completed, with 8 main line toll stations dismantled and renovated, 1 temporary ramp station newly built, and ETC lane renovation and gantry system construction completed[40](index=40&type=chunk) - The company participated in an investment consortium led by China Merchants Expressway, intending to acquire a **51%** equity stake and shareholder loans in Turkey's Istanbul Third Bridge and Northern Marmara Motorway and its operation and maintenance company[41](index=41&type=chunk) - An investment of RMB **6 million yuan** was made to establish an information industry company, holding a **10%** stake, with the first installment of **3 million yuan** already paid[41](index=41&type=chunk) - In 2019, a total of RMB **212 million yuan** in equity dividends was recognized, an increase of **17.78%** compared to the same period last year[41](index=41&type=chunk) - The company's corporate governance structure is sound, with the "three meetings and one layer" performing their respective duties, continuously optimizing internal control systems[42](index=42&type=chunk) - The company faces challenges from the COVID-19 pandemic, slow traffic growth on main road assets, approaching expiration of concession periods for core road sections, and the test of intelligent upgrading of operation and management[43](index=43&type=chunk) [Key Operating Performance During the Reporting Period](index=23&type=section&id=Key%20Operating%20Performance%20During%20the%20Reporting%20Period) In 2019, operating revenue under PRC GAAP decreased by 0.69% to RMB 2.95 billion, while HKFRS revenue increased by 19.73% to RMB 4.64 billion, driven by construction contract income, with management and financial expenses showing varied changes 2019 Key Financial Data (under PRC GAAP, unit: thousand yuan) | Indicator | 2019 | 2018 | Period-on-period change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 2,946,421 | 2,966,949 | -0.69 | | Total Profit | 1,560,167 | 1,547,540 | 0.82 | | Net Profit Attributable to Owners of the Company | 1,097,546 | 1,123,042 | -2.27 | | Basic Earnings Per Share (yuan) | 0.6617 | 0.6771 | -2.27 | 2019 Key Financial Data (under HKFRS, unit: thousand yuan) | Indicator | 2019 | 2018 | Period-on-period change (%) | | :--- | :--- | :--- | :--- | | Revenue | 4,640,431 | 3,875,803 | 19.73 | | Profit before income tax | 1,550,142 | 1,537,528 | 0.82 | | Profit attributable to owners of the Company | 1,089,855 | 1,115,361 | -2.29 | | Basic earnings per share (yuan) | 0.6571 | 0.6725 | -2.29 | - The Group's toll revenue in 2019 was RMB **2.75 billion yuan**, an increase of **2.15%** year-on-year[45](index=45&type=chunk) - Policy-related toll exemptions totaled RMB **10.02 billion yuan**, an increase of **8.09%** year-on-year[45](index=45&type=chunk)[46](index=46&type=chunk) 2019 Toll Revenue and Traffic Flow Changes for Each Toll Road | Project | 2019 Daily Average Traffic Flow (vehicles) | 2018 Daily Average Traffic Flow (vehicles) | Traffic Flow Change (%) | 2019 Toll Revenue (thousand yuan) | 2018 Toll Revenue (thousand yuan) | Toll Revenue Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Hening Expressway | 24,308 | 24,876 | -2.28 | 843,864 | 888,218 | -4.99 | | G205 Tianchang Section New Line | 6,921 | 5,987 | 15.60 | 87,128 | 75,309 | 15.69 | | Gaojie Expressway | 18,053 | 17,133 | 5.37 | 716,249 | 684,742 | 4.60 | | Xuanguang Expressway | 26,221 | 25,341 | 3.47 | 547,359 | 544,842 | 0.46 | | Lianyungang-Huoerguosi Expressway Anhui Section | 16,523 | 14,682 | 12.54 | 291,486 | 264,128 | 10.36 | | Ninghuai Expressway Tianchang Section | 35,822 | 34,568 | 3.63 | 106,802 | 108,037 | -1.14 | | Guangci Expressway | 29,584 | 27,361 | 8.12 | 110,610 | 99,723 | 10.92 | | Ningxuanhang Expressway | 4,988 | 3,944 | 26.47 | 132,748 | 111,513 | 19.04 | - Wantong Pawnshop achieved operating revenue of RMB **4.23 million yuan** and net profit of RMB **2.93 million yuan** in 2019, an increase in profit of RMB **2.49 million yuan** compared to the previous year[56](index=56&type=chunk) 2019 Analysis of Changes in Income Statement and Cash Flow Statement Items (unit: yuan) | Item | Current Period Amount | Prior Period Amount | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 2,946,420,820.29 | 2,966,948,529.24 | -0.69 | | Operating Costs | 1,272,488,308.82 | 1,282,803,758.59 | -0.80 | | Administrative Expenses | 98,015,239.43 | 84,383,089.78 | 16.16 | | Financial Expenses | 51,699,093.28 | 53,115,973.85 | -2.67 | | Gains from Fair Value Changes | 11,891,005.50 | 0.00 | Not applicable | | Net Cash Flow from Operating Activities | 1,822,702,104.07 | 1,807,617,059.70 | 0.83 | | Net Cash Flow from Investing Activities | -1,716,710,610.67 | -714,135,025.76 | 140.39 | | Net Cash Flow from Financing Activities | -654,204,253.20 | -469,402,476.69 | 39.37 | - Administrative expenses increased by **16.16%**, mainly due to increased remuneration for management personnel[59](index=59&type=chunk)[68](index=68&type=chunk) - Financial expenses decreased by **2.67%**, mainly due to the reduction in amortization of the carrying amount of long-term payables to minority shareholders after Ningxuanhang Company's debt-to-capital reserve conversion[59](index=59&type=chunk)[69](index=69&type=chunk) - Gains from fair value changes increased, primarily due to the company's income from floating-rate structured deposits purchased from banks[59](index=59&type=chunk)[70](index=70&type=chunk) - Net cash outflow from investing activities increased by **140.39%**, mainly due to a year-on-year increase in the net amount of structured deposits purchased from banks[59](index=59&type=chunk)[73](index=73&type=chunk) - Net cash outflow from financing activities increased by **39.37%**, mainly due to a year-on-year increase in Ningxuanhang Company's repayment of minority shareholder loans[59](index=59&type=chunk)[73](index=73&type=chunk) 2019 Main Business by Industry (unit: yuan) | Industry Segment | Operating Revenue | Operating Costs | Gross Profit Margin (%) | Year-on-year change in Operating Revenue (%) | Year-on-year change in Operating Costs (%) | Year-on-year change in Gross Profit Margin (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Toll Road Business | 2,780,302,310.31 | 1,162,024,345.50 | 58.21 | 2.04 | 5.97 | Decreased by 1.54 percentage points | | Pawn Business | 4,225,831.65 | 0.00 | Not applicable | -33.49 | Not applicable | Not applicable | - Highway maintenance expenses in the toll road business increased by **44.68%** year-on-year, mainly due to a significant increase in highway maintenance costs for sections like Lianyungang-Huoerguosi Expressway and Xuanguang Expressway due to their long service life and deteriorating road conditions[65](index=65&type=chunk) 2019 Asset and Liability Status Changes (unit: yuan) | Item Name | Current Period End Amount | Proportion of Total Assets at Period End (%) | Prior Period End Amount | Proportion of Total Assets at Prior Period End (%) | Change from Prior Period End (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Construction in progress | 71,255,879.88 | 0.45 | 128,028,388.34 | 0.87 | -44.34 | | Accounts payable | 1,210,422,954.45 | 7.60 | 629,705,853.96 | 4.26 | 92.22 | | Long-term payables | 392,499,619.04 | 2.47 | 1,079,788,259.52 | 7.31 | -63.65 | | Deferred tax liabilities | 15,153,898.32 | 0.10 | 96,381,915.99 | 0.65 | -84.28 | | Minority interests | 831,833,345.60 | 5.23 | 511,101,971.26 | 3.46 | 62.75 | [Industry Operating Information Analysis](index=34&type=section&id=Industry%20Operating%20Information%20Analysis) The expressway industry offers broad development potential, particularly in central and western regions, but faces challenges from declining investment returns, rising costs, policy-driven toll reductions, and competition from other transport modes, necessitating diversification and digital transformation - The expressway industry has broad development space, benefiting from major national strategies (such as Yangtze River Delta integration, "Transportation Powerhouse" construction) and road network construction space in central and western provinces[77](index=77&type=chunk) - The industry faces challenges of gradually decreasing investment returns, including limited growth in toll revenue, rising land acquisition and demolition costs, increasing policy-driven toll reductions, and diversion effects from other transportation modes[78](index=78&type=chunk) - Diversification and transformation have become strategic choices for industry development[78](index=78&type=chunk) - The controlling shareholder has strong capabilities, and state-owned enterprise reform (such as equity incentives, asset securitization, transformation, and upgrading) provides huge opportunities for the company's development[79](index=79&type=chunk) - The informatization level of expressways is continuously strengthening, and the trend of information industrialization based on big data, cloud computing, and other technologies has formed, bringing new opportunities for the company's transformation and upgrading[80](index=80&type=chunk) [Investment Status Analysis](index=36&type=section&id=Investment%20Status%20Analysis) The company made new equity investments of RMB 3 million in an information industry company and committed USD 48.195 million to acquire a 7% stake in a Turkish bridge and highway project, while the Hening Expressway expansion project was completed and operational - During the reporting period, the company made new equity investments of RMB **3 million yuan**, participating in the establishment of Anhui Transportation Holding Information Industry Company, holding a **10%** stake[81](index=81&type=chunk) - The company participated in an investment consortium led by China Merchants Expressway, intending to invest **48.195 million USD** to hold a **7%** stake in the consortium's Hong Kong SPV, acquiring a **51%** equity stake and shareholder loans in Turkey's Istanbul Third Bridge and Northern Marmara Motorway and its operation and maintenance company[82](index=82&type=chunk) Significant Non-Equity Investment: Hening Expressway Expansion Project | Project Name | Project Overview | Estimated Amount (hundred million yuan) | Project Progress | Amount Invested This Year (hundred million yuan) | Cumulative Actual Investment (hundred million yuan) | Project Revenue Status | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Hening Expressway Expansion Project | Total length approximately 87 kilometers | 63.75 | The project commenced construction in November 2016. | 17.19 | 36.49 | The project officially commenced operations at the end of 2019 | Financial Assets Measured at Fair Value (unit: yuan) | Project Name | Beginning Balance | Ending Balance | Impact on Current Period Profit | | :--- | :--- | :--- | :--- | | Other equity instrument investments | 336,299,364.67 | 315,530,888.10 | 0.00 | | Trading financial assets - structured deposits | 0.00 | 422,316,986.30 | 11,891,005.50 | | Total | 336,299,364.67 | 737,847,874.40 | 11,891,005.50 | [Analysis of Major Holding and Participating Companies](index=38&type=section&id=Analysis%20of%20Major%20Holding%20and%20Participating%20Companies) The company's portfolio of holding and participating companies spans highway operations, media, and financial investments, with most entities reporting profits, though Ningxuanhang Company recorded a net loss of RMB 368.97 million in 2019 Financial and Business Overview of Major Holding and Participating Companies (unit: thousand yuan) | Company Name | Group's Equity Interest | Registered Capital | Total Assets as of Dec 31, 2019 | Net Assets as of Dec 31, 2019 | 2019 Operating Revenue | 2019 Net Profit | Main Business | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Xuanguang Company | 55.47% | 111,760 | 987,198 | 687,361 | 550,989 | 251,141 | Construction, management, and operation of Xuanguang Expressway | | Ningxuanhang Company | 51% | 300,000 | 4,736,250 | 818,105 | 154,031 | -368,972 | Construction, design, supervision, toll collection, maintenance, management, technical consulting, and advertising services for high-grade highways | | Guangci Company | 55.47% | 56,800 | 275,130 | 258,354 | 109,153 | 66,888 | Construction, management, and operation of Guangci Expressway | | Gaosu Media | 38% | 50,000 | 481,148 | 348,626 | 148,805 | 67,437 | Design, production, publication, and agency of domestic advertising | | Xinan Financial | 6.62% | 1,900,000 | 3,407,296 | 2,851,282 | 210,132 | 104,325 | Financial investment, equity investment, management consulting | | Xinan Capital | 6.62% | 1,120,000 | 2,808,223 | 1,040,107 | 603,919 | 80,517 | Internet financial services, network information services, pawn business, etc. | | Wantong Pawnshop | 71.43% | 157,500 | 81,902 | 73,071 | 4,226 | 2,929 | Movable property pledge pawn business, property rights pledge pawn business, real estate mortgage pawn business | | Wantong Microcredit | 10% | 150,000 | 117,857 | 115,026 | 8,211 | 522 | Issuance of small loans, small enterprise management consulting, financial consulting | - Ningxuanhang Company's net profit in 2019 was **-368.97 million yuan**, indicating a continued loss[85](index=85&type=chunk) [Company's Discussion and Analysis of Future Development](index=40&type=section&id=Company's%20Discussion%20and%20Analysis%20of%20Future%20Development) The company's "1123" development strategy focuses on asset injection, internationalization, and diversified growth to expand its core highway business, innovate, and explore global markets, while acknowledging policy and market risks - Future development trends in the expressway industry include slowing investment growth but still large scale, growth potential in central and western regions, and a focus on road network optimization, connection, and structural synergistic adjustment[91](index=91&type=chunk) - Industry investment and financing system reforms will deepen, with PPP models and market-based debt financing becoming hot topics[91](index=91&type=chunk) - The company has formulated a "1123" development strategy: "focusing on one core (highway asset resources), implementing one task (asset injection), exploring two directions (internationalization, diversification), and achieving three major goals (expanding main business scale, innovating diversified development, exploring international markets)"[93](index=93&type=chunk) - The company's operating plan is affected by the COVID-19 pandemic, with a toll-free policy implemented from February 17, 2020, impacting operating targets, and the company will actively seek policy support[94](index=94&type=chunk)[97](index=97&type=chunk) - The company faces policy risks, including adjustments to industry policies (toll standards, ETC promotion) and the risk of concession expiration[98](index=98&type=chunk)[99](index=99&type=chunk) - The company faces market risks, including the impact of macroeconomic fluctuations and changes in the road network (such as new parallel routes, high-speed rail diversion, and shift from road to rail/water transport) on toll revenue[101](index=101&type=chunk)[102](index=102&type=chunk) [Work on Actively Fulfilling Social Responsibilities](index=46&type=section&id=Work%20on%20Actively%20Fulfilling%20Social%20Responsibilities) The company actively fulfills its ESG responsibilities, adhering to laws and regulations, enhancing governance, and achieving significant results in road safety, green operations, and poverty alleviation, confirming compliance with HKEX ESG guidelines - The company actively undertakes corporate environmental, social, and governance responsibilities, strictly complying with laws and regulations in operational practices, environmental protection, and employment[103](index=103&type=chunk) - In 2019, relying on the ESG working group, the company reviewed and assessed material issues, and refined internal rules and annual management practices[103](index=103&type=chunk) - The company continuously promotes road safety and smooth traffic management, green maintenance, green operations, and green office practices, and enhances service capabilities, with its "Smiling Service" brand receiving multiple honors[103](index=103&type=chunk) - The company continues to advance targeted poverty alleviation efforts, implementing industrial poverty alleviation, public welfare education, and infrastructure construction projects in paired poverty-stricken villages, achieving the goal of "villages lifted out of poverty, households lifted out of poverty" as scheduled[103](index=103&type=chunk) - The Board of Directors confirms that the company complies with the applicable provisions of the "Environmental, Social and Governance Reporting Guide" contained in the Listing Rules of The Stock Exchange of Hong Kong Limited[103](index=103&type=chunk) [Liquidity, Financial Resources, and Capital Structure](index=47&type=section&id=Liquidity,%20Financial%20Resources,%20and%20Capital%20Structure) The group secured RMB 545 million in new bank loans in 2019, with a year-end balance of RMB 2.11 billion in long-term borrowings, maintaining a low capital-to-debt ratio of 6.17% and substantial unused credit lines - During the reporting period, the Group cumulatively obtained bank loans of RMB **545 million yuan** (2018: RMB **42 million yuan**)[107](index=107&type=chunk) - As of the end of the reporting period, the bank loan balance was RMB **2.11 billion yuan** (2018: RMB **1.71 billion yuan**), all of which were long-term borrowings[107](index=107&type=chunk) - As of December 31, 2019, the capital-to-debt ratio (under HKFRS) was **6.17%** (2018: **5.13%**), consistently maintaining the capital-to-debt ratio below **30%**[108](index=108&type=chunk) - The Group has a good credit rating, with a total credit line of RMB **3.06 billion yuan** as of December 31, 2019, and an unused credit line of RMB **1.65 billion yuan**[73](index=73&type=chunk) [Pledge of Assets and Contingent Liabilities](index=48&type=section&id=Pledge%20of%20Assets%20and%20Contingent%20Liabilities) As of December 31, 2019, approximately RMB 580 million in bank loans were secured by future toll revenues from the Hening Expressway expansion, and RMB 830 million by toll revenues from the Lixuan section of the Ningxuanhang Expressway, with no contingent liabilities - As of December 31, 2019, bank loans of approximately RMB **580 million yuan** were pledged against the toll revenue to be enjoyed by the Group after the completion of the Hening Expressway expansion project[109](index=109&type=chunk) - Bank loans of approximately RMB **830 million yuan** were pledged against the toll revenue enjoyed by the Group from the Lixuan to Xuancheng section of the Ningxuanhang Expressway (Anhui section)[109](index=109&type=chunk) - As of December 31, 2019, the Group had no contingent liabilities[109](index=109&type=chunk) [Significant Investments and Acquisitions/Disposals](index=48&type=section&id=Significant%20Investments%20and%20Acquisitions%2FDisposals) The company plans to invest USD 48.195 million for a 7% stake in a Hong Kong SPV, which will acquire 51% equity and shareholder loans in Turkey's Third Bosphorus Bridge and Northern Marmara Motorway, with no payment made as of the disclosure date - The company participated in an investment consortium led by China Merchants Expressway, intending to acquire a **51%** equity stake and shareholder loans in Turkey's Istanbul Third Bridge and Northern Marmara Motorway and its operation and maintenance company[110](index=110&type=chunk) - The company intends to invest **48.195 million USD** and hold a **7%** stake in the consortium's Hong Kong SPV[110](index=110&type=chunk) - As of the disclosure date of this announcement, the company has not yet paid the investment amount[110](index=110&type=chunk) [Charitable Donations](index=49&type=section&id=Charitable%20Donations) For the year ended December 31, 2019, the group made charitable donations of approximately RMB 0.25 million, an increase from RMB 0.23 million in 2018 - For the year ended December 31, 2019, the Group made charitable donations of approximately RMB **0.25 million yuan** (2018: RMB **0.23 million yuan**)[114](index=114&type=chunk) [Section V Significant Matters](index=49&type=section&id=Section%20V%20Significant%20Matters) This section covers the company's profit distribution plan, fulfillment of commitments, analysis of accounting policy changes, appointment of auditors, significant related party transactions, major contracts, and other important operational updates [Ordinary Share Profit Distribution or Capital Reserve Conversion Plan](index=49&type=section&id=Ordinary%20Share%20Profit%20Distribution%20or%20Capital%20Reserve%20Conversion%20Plan) The company proposes a cash dividend of RMB 2.30 per 10 shares (tax inclusive) for 2019, totaling RMB 381.48 million, representing 34.76% of net profit attributable to ordinary shareholders, continuing its 23-year dividend payout streak - The company has consistently rewarded shareholders since its listing, distributing cash dividends uninterrupted for **23 years**[117](index=117&type=chunk) - The company has further refined its cash dividend policy in the "Articles of Association," standardizing the decision-making mechanism and procedures for profit distribution plans[117](index=117&type=chunk) Company's Ordinary Share Dividend Distribution Plans or Proposals for the Past Three Years (unit: thousand yuan) | Dividend Year | Dividend per 10 shares (yuan) (tax inclusive) | Amount of Cash Dividend (tax inclusive) | Net Profit Attributable to Ordinary Shareholders of Listed Company in Consolidated Statement for the Dividend Year | Ratio to Net Profit Attributable to Ordinary Shareholders of Listed Company in Consolidated Statement (%) | | :--- | :--- | :--- | :--- | :--- | | 2019 | 2.30 | 381,480.30 | 1,097,546.19 | 34.76 | | 2018 | 2.50 | 414,652.50 | 1,123,042.23 | 36.92 | | 2017 | 2.30 | 381,480.30 | 1,091,343.09 | 34.96 | - This year, the company will not implement a capital reserve conversion plan[5](index=5&type=chunk) [Fulfillment of Commitments](index=52&type=section&id=Fulfillment%20of%20Commitments) The company's controlling shareholder, Anhui Transportation Holding Group, committed to supporting asset acquisitions and proposing long-term incentive plans, with all commitments being timely and strictly fulfilled during the reporting period Fulfillment of Commitments | Commitment Background | Commitment Type | Committing Party | Commitment Content | Commitment Time and Duration | Has Performance Deadline | Timely and Strictly Fulfilled | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Commitments related to share reform | Other | Anhui Transportation Holding Group | Will continue to support the company in acquiring high-quality highway assets owned by Anhui Transportation Holding Group in the future, and will, as always, focus on protecting shareholders' interests. | February 13, 2006, long-term effective | No | Yes | | Commitments related to share reform | Other | Anhui Transportation Holding Group, China Merchants Expressway | After the completion of the share reform, will recommend that the company's Board of Directors formulate a long-term incentive plan, including equity incentives, and that the company's Board of Directors implement such long-term incentive plan in accordance with relevant national regulations or after approval by the company's general meeting of shareholders. | February 13, 2006, long-term effective | No | Yes | | Commitments related to initial public offering | Resolution of horizontal competition | Anhui Transportation Holding Group | Commits not to participate in any business or activity that actually or potentially constitutes direct or indirect competition with the company's current business. | October 12, 1996, long-term effective | No | Yes | [Analysis of Reasons and Impact of Changes in Accounting Policies, Accounting Estimates, or Correction of Significant Accounting Errors](index=53&type=section&id=Analysis%20of%20Reasons%20and%20Impact%20of%20Changes%20in%20Accounting%20Policies,%20Accounting%20Estimates,%20or%20Correction%20of%20Significant%20Accounting%20Errors) The company retrospectively adopted HKFRS 16 "Leases" from January 1, 2019, resulting in a RMB 9.40 million increase in right-of-use assets and a corresponding decrease in land use rights, with no impact on retained earnings - The Group retrospectively adopted HKFRS 16 "Leases" from January 1, 2019[124](index=124&type=chunk) - Due to the adoption of the new lease standard, right-of-use assets in the consolidated balance sheet increased by RMB **9.40 million yuan**, land use rights decreased by RMB **9.40 million yuan**, with no impact on retained earnings as of January 1, 2019[127](index=127&type=chunk) - The company did not restate comparative figures for the 2018 reporting period[124](index=124&type=chunk) - The company did not experience any significant accounting error corrections[128](index=128&type=chunk) [Appointment and Dismissal of Accounting Firms](index=55&type=section&id=Appointment%20and%20Dismissal%20of%20Accounting%20Firms) The company re-appointed PwC Zhongtian as its domestic auditor (RMB 1.05 million) and PwC as its Hong Kong auditor (RMB 0.70 million) for 2019, both for 18 years, with PwC Zhongtian also auditing internal controls (RMB 0.35 million) Appointment of Accounting Firms (unit: ten thousand yuan) | Firm Type | Name | Remuneration | Audit Tenure | | :--- | :--- | :--- | :--- | | Domestic Accounting Firm | PwC Zhongtian Certified Public Accountants (Special General Partnership) | 105 | 18 | | Overseas Accounting Firm | PricewaterhouseCoopers | 70 | 18 | | Internal Control Audit Accounting Firm | PwC Zhongtian Certified Public Accountants (Special General Partnership) | 35 | - | - The company's audit committee is responsible for reviewing the appointment,