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].

[Important Notice](index=3&type=section&id=Important%20Notice) The board, supervisory board, and senior management guarantee the truthfulness and completeness of this quarterly report - The company's board of directors, supervisory board, and all senior management ensure the truthfulness, accuracy, and completeness of this quarterly report and bear corresponding legal responsibilities[4](index=4&type=chunk) - Hu Wei, the company's head, Zhao Guiping, the person in charge of accounting, and Li Xiaojun, the head of the accounting department, guarantee the truthfulness, accuracy, and completeness of the financial statements[5](index=5&type=chunk) - The company's financial statements for the first quarter of 2021 are unaudited[5](index=5&type=chunk) [Company Profile](index=3&type=section&id=Company%20Profile) This section outlines the company's key financial performance and shareholder structure for the reporting period [Key Financial Data](index=3&type=section&id=Key%20Financial%20Data) In Q1 2021, the company achieved a significant turnaround, with revenue growing 313.31% to CNY 1.96 billion and net profit reaching CNY 541 million Key Financial Data for Q1 2021 | Indicator | Current Period-End / Current Period | Prior Year / Prior Year-End | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | **Total Assets (CNY)** | 58,305,290,489.70 | 55,144,962,042.63 | 5.73% | | **Net Assets Attributable to Shareholders (CNY)** | 23,537,891,908.32 | 23,042,941,782.92 | 2.15% | | **Net Cash Flow from Operating Activities (CNY)** | 677,216,593.31 | -335,801,179.71 | Not Applicable | | **Operating Revenue (CNY)** | 1,962,015,531.22 | 474,711,617.77 | 313.31% | | **Net Profit Attributable to Shareholders (CNY)** | 540,534,999.13 | -132,684,403.98 | Not Applicable | | **Basic Earnings Per Share (CNY/share)** | 0.227 | -0.061 | Not Applicable | - Total non-recurring gains and losses for the reporting period amounted to **CNY 14.14 million**, primarily from asset disposal gains of **CNY 15.23 million** due to government compensation for land acquisition along expressways[9](index=9&type=chunk) [Total Shareholders, Top Ten Shareholders, and Top Ten Circulating Shareholders at Period-End](index=5&type=section&id=Total%20Shareholders%2C%20Top%20Ten%20Shareholders%2C%20and%20Top%20Ten%20Circulating%20Shareholders%20at%20Period-End) As of the reporting period end, the company had 18,767 shareholders, with the top three holding a concentrated majority of shares - As of the end of the reporting period, the company had a total of **18,767 shareholders**, including **18,528 A-share shareholders** and **239 H-share shareholders**[10](index=10&type=chunk) Top Ten Shareholders' Holdings | Shareholder Name | Number of Shares Held (shares) | Shareholding Ratio (%) | | :--- | :--- | :--- | | HKSCC NOMINEES LIMITED | 729,642,042 | 33.46 | | Xintongchan Industrial Development (Shenzhen) Co., Ltd. | 654,780,000 | 30.03 | | Shenzhen Shenguanghui Highway Development Co., Ltd. | 411,459,887 | 18.87 | | China Merchants Highway Network Technology Holdings Co., Ltd. | 91,092,743 | 4.18 | | Guangdong Road and Bridge Construction Development Co., Ltd. | 61,948,790 | 2.84 | - Explanation of related party relationships: Xintongchan Industrial Development (Shenzhen) Co., Ltd. and Shenzhen Shenguanghui Highway Development Co., Ltd. are both related parties controlled by Shenzhen International Holdings Co., Ltd[12](index=12&type=chunk) [Significant Events](index=6&type=section&id=Significant%20Events) This section details the company's operational performance, financial analysis, and key developments during the reporting period [Operating Information](index=6&type=section&id=Operating%20Information) Core toll road business recovered significantly, while environmental protection expanded with new projects and clean energy acquisitions [Toll Road Business](index=6&type=section&id=Toll%20Road%20Business) Toll road operations normalized, showing significant traffic and revenue increases due to economic recovery and a low prior-year base - Due to the low base in the prior year caused by the pandemic and free toll policies, all toll road projects experienced significant year-on-year growth in traffic volume and toll revenue during the reporting period[13](index=13&type=chunk) Daily Operating Data for Major Toll Road Projects | Toll Road | Daily Average Mixed Traffic Volume (thousand vehicles/day) | Daily Average Toll Revenue (CNY thousand/day) | | :--- | :--- | :--- | | **Shenzhen Area** | | | | Jihe East Section | 313 | 1,923 | | Outer Ring Project | 194 | 2,143 | | Shuiguan Expressway | 268 | 1,701 | | **Other Areas** | | | | Qinglian Expressway | 58 | 2,831 | | Yangmao Expressway | 45 | 1,314 | - The Outer Ring Phase I project, opened in late December 2020, performed well with **daily average toll revenue of CNY 2.14 million**, though it caused some traffic diversion from the Jihe Expressway[17](index=17&type=chunk) [Environmental Protection Business](index=8&type=section&id=Environmental%20Protection%20Business) Environmental protection business expanded with increased waste management revenue, new project signings, and Xinjiang Mulei wind power acquisitions, enhancing clean energy - Solid waste resource management: Lande Environmental's kitchen waste treatment capacity increased, with operating revenue growing significantly year-on-year; the Guangming Environmental Park project was officially signed in February; completed the controlling acquisition of a **50% equity stake in Qiantai Company**, entering the field of comprehensive utilization of discarded new energy vehicle batteries[21](index=21&type=chunk) - Clean energy: Acquired three Xinjiang Mulei wind power projects during the reporting period, which, after consolidation, collectively generated **70,579.73 MWh of grid-connected electricity**; Baotou Nanfeng project generated **182,156.18 MWh**, a **24% year-on-year increase**[23](index=23&type=chunk) [Financial Analysis](index=9&type=section&id=Financial%20Analysis) The company achieved a net profit of CNY 541 million, a significant turnaround from prior year's loss, driven by revenue growth and increased interest-bearing debt Key Income Statement Item Changes for Q1 2021 | Item | 2021 Q1 (CNY thousand) | 2020 Q1 (CNY thousand) | Year-on-Year Change (%) | Primary Reason | | :--- | :--- | :--- | :--- | :--- | | **Operating Revenue** | 1,962,016 | 474,712 | 313.31% | Prior year affected by pandemic and free toll policies, current period toll revenue recovered | | **Operating Cost** | 1,056,874 | 518,400 | 103.87% | Increased depreciation and amortization due to traffic growth, and cost recognition for Guilong development project | | **Net Profit Attributable to Parent** | 540,535 | -132,684 | Not Applicable | Primarily due to significant decline in toll road revenue in prior year | - Capital expenditure during the reporting period was approximately **CNY 2.69 billion**; total outstanding interest-bearing debt at period-end was approximately **CNY 23.1 billion**, a **19.43% increase** from the beginning of the year, primarily due to increased borrowings for the acquisition of Mulei wind power projects and new office building purchases; the asset-liability ratio was **54.02%**, an increase of **1.67 percentage points** from the beginning of the year[25](index=25&type=chunk) - During the reporting period, the company completed the **100% equity acquisition** of Qianzhi, Qianhui, and Qianxin (Mulei Wind Power Projects), consolidating them into the financial statements; these three companies collectively contributed **CNY 28.86 million in operating revenue** and **CNY 2.51 million in net profit attributable to parent**[25](index=25&type=chunk) [Analysis of Significant Changes in Major Financial Statement Items and Indicators and Their Reasons](index=10&type=section&id=3.3%20Analysis%20of%20Significant%20Changes%20in%20Major%20Financial%20Statement%20Items%20and%20Indicators%20and%20Their%20Reasons) Significant changes in financial statement items include increased fixed assets and long-term prepayments from acquisitions, and a substantial rise in investment income Significant Changes in Major Financial Statement Items | Item | Change (%) | Primary Reason | | :--- | :--- | :--- | | **Fixed Assets** | 58.93% | Mulei wind power projects consolidated | | **Long-term Prepayments** | 330.45% | Prepayment for new office building purchase | | **Short-term Borrowings** | 66.24% | Increased short-term borrowings based on market funding conditions | | **Other Current Liabilities** | 47.86% | Issuance of ultra-short-term financing bonds | | **Taxes and Surcharges** | 1,045.64% | Increased revenue led to corresponding increase in taxes and surcharges | | **Investment Income** | 317.27% | Lower investment income from associates in prior year, and increased performance of Derun Environment in current period | | **Net Cash Flow from Operating Activities** | Not Applicable | Lower cash inflow from tolls in prior year due to pandemic and free toll policies | | **Net Cash Flow from Investing Activities** | Not Applicable | Payment for new office building prepayment and equity consideration for Mulei wind power projects acquisition | [Progress of Significant Events](index=11&type=section&id=3.4%20Analysis%20of%20Progress%2C%20Impact%2C%20and%20Solutions%20for%20Significant%20Events) The company completed Xinjiang Mulei wind power acquisition, issued short-term financing bonds, and extended H-share private placement resolution validity - The company invested approximately **CNY 1.015 billion** to complete the **100% equity acquisition** of three Xinjiang Mulei wind power projects, with a total installed capacity of **299 MW**[28](index=28&type=chunk) - In February and March 2021, the company issued two tranches of ultra-short-term financing bonds, each for **CNY 1 billion**, with maturities of **60 days and 180 days** and interest rates of **2.65% and 2.75%**, respectively[28](index=28&type=chunk)[29](index=29&type=chunk) - To ensure the smooth progress of the private placement of H-shares, the board of directors approved extending the validity period of relevant resolutions and authorizations by **12 months to March 30, 2022**, pending shareholder approval[29](index=29&type=chunk) [Performance Forecast](index=14&type=section&id=3.6%20Warning%20and%20Explanation%20of%20Potential%20Loss%20or%20Significant%20Change%20in%20Cumulative%20Net%20Profit%20from%20Year-Beginning%20to%20End%20of%20Next%20Reporting%20Period) The company forecasts a significant year-on-year net profit increase for H1 2021, primarily due to a low comparative base from prior year's pandemic impact - The Group expects a **significant year-on-year increase** in net profit for the first half of 2021[33](index=33&type=chunk) - The primary reason for the significant performance growth is the **low comparative base** in the first half of 2020, when toll road revenue significantly declined due to the pandemic and free toll policies[33](index=33&type=chunk) [Appendix](index=15&type=section&id=Appendix) This appendix provides the company's unaudited consolidated and parent company financial statements for the first quarter of 2021 [Financial Statements](index=15&type=section&id=Financial%20Statements) This section presents the company's unaudited consolidated and parent company balance sheets, income statements, and cash flow statements for Q1 2021 [Consolidated Balance Sheet](index=15&type=section&id=Consolidated%20Balance%20Sheet) As of March 31, 2021, total assets were CNY 58.31 billion, total liabilities CNY 31.50 billion, and net assets attributable to shareholders CNY 23.54 billion Key Items of Consolidated Balance Sheet | Item | March 31, 2021 (CNY) | December 31, 2020 (CNY) | | :--- | :--- | :--- | | **Total Assets** | 58,305,290,489.70 | 55,144,962,042.63 | | **Total Liabilities** | 31,496,202,963.17 | 28,865,852,158.86 | | **Total Owners' Equity Attributable to Parent Company** | 23,537,891,908.32 | 23,042,941,782.92 | [Parent Company Balance Sheet](index=17&type=section&id=Parent%20Company%20Balance%20Sheet) As of March 31, 2021, the parent company's total assets were CNY 40.18 billion, total liabilities CNY 21.82 billion, and total owner's equity CNY 18.35 billion Key Items of Parent Company Balance Sheet | Item | March 31, 2021 (CNY) | December 31, 2020 (CNY) | | :--- | :--- | :--- | | **Total Assets** | 40,175,179,202.76 | 36,786,576,377.85 | | **Total Liabilities** | 21,821,024,928.95 | 18,758,101,048.69 | | **Total Owners' Equity** | 18,354,154,273.81 | 18,028,475,329.16 | [Consolidated Income Statement](index=19&type=section&id=Consolidated%20Income%20Statement) In Q1 2021, consolidated operating revenue was CNY 1.96 billion, with net profit attributable to parent company shareholders of CNY 541 million, a significant turnaround Key Items of Consolidated Income Statement | Item | 2021 Q1 (CNY) | 2020 Q1 (CNY) | | :--- | :--- | :--- | | **I. Total Operating Revenue** | 1,962,015,531.22 | 474,711,617.77 | | **III. Operating Profit** | 750,595,014.03 | -219,930,715.23 | | **V. Net Profit** | 585,562,516.85 | -174,228,740.36 | | **Net Profit Attributable to Parent Company Shareholders** | 540,534,999.13 | -132,684,403.98 | [Parent Company Income Statement](index=21&type=section&id=Parent%20Company%20Income%20Statement) In Q1 2021, parent company operating revenue was CNY 149 million, with net profit of CNY 372 million, largely due to investment income Key Items of Parent Company Income Statement | Item | 2021 Q1 (CNY) | 2020 Q1 (CNY) | | :--- | :--- | :--- | | **I. Operating Revenue** | 149,040,642.42 | 54,369,841.66 | | **Investment Income** | 397,364,682.84 | -11,707,862.20 | | **IV. Net Profit** | 371,678,944.65 | -70,353,117.54 | [Consolidated Cash Flow Statement](index=22&type=section&id=Consolidated%20Cash%20Flow%20Statement) Q1 2021 saw positive net cash flow from operating activities of CNY 677 million, while investment activities resulted in a net outflow of CNY 2.27 billion Key Items of Consolidated Cash Flow Statement | Item | 2021 Q1 (CNY) | 2020 Q1 (CNY) | | :--- | :--- | :--- | | **Net Cash Flow from Operating Activities** | 677,216,593.31 | -335,801,179.71 | | **Net Cash Flow from Investing Activities** | -2,266,944,593.98 | -286,429,394.96 | | **Net Cash Flow from Financing Activities** | 1,748,058,149.90 | 1,458,258,351.05 | | **Net Increase in Cash and Cash Equivalents** | 158,328,252.82 | 835,977,124.87 | [Parent Company Cash Flow Statement](index=24&type=section&id=Parent%20Company%20Cash%20Flow%20Statement) In Q1 2021, parent company operating cash flow was CNY 28 million, with a significant net outflow from investment activities of CNY 3.05 billion Key Items of Parent Company Cash Flow Statement | Item | 2021 Q1 (CNY) | 2020 Q1 (CNY) | | :--- | :--- | :--- | | **Net Cash Flow from Operating Activities** | 28,392,252.51 | 88,453,083.53 | | **Net Cash Flow from Investing Activities** | -3,054,646,041.73 | -1,643,707,367.19 | | **Net Cash Flow from Financing Activities** | 2,879,883,135.11 | 2,309,435,756.96 | | **Net Increase in Cash and Cash Equivalents** | -146,370,188.35 | 754,183,600.82 |

Financial Performance - The company reported a total revenue of approximately 1.5 billion RMB for the year 2020, reflecting a year-on-year growth of 10%[14]. - In 2020, the company's operating revenue reached CNY 8,026,737,099.99, representing a 25.61% increase compared to CNY 6,390,295,110.82 in 2019[30]. - The net profit attributable to shareholders was CNY 2,054,523,306.30, a decrease of 19.88% from CNY 2,564,317,594.25 in the previous year[30]. - The basic earnings per share for 2020 was CNY 0.936, down 20.44% from CNY 1.176 in 2019[31]. - The total assets of the company increased by 20.78% to CNY 55,144,962,042.63 at the end of 2020, compared to CNY 45,658,413,658.91 at the end of 2019[30]. - The net cash flow from operating activities was CNY 1,100,633,933.07, a decrease of 35.08% from CNY 1,695,357,337.06 in 2019[30]. - The company reported a weighted average return on equity of 10.83% for 2020, down from 13.73% in 2019, a decrease of 2.89 percentage points[31]. - The company achieved a net profit of 2,054,523 thousand RMB in 2020, a decrease from 2,564,318 thousand RMB in 2019, with a year-on-year growth of approximately 0.32% after excluding deferred tax asset impacts from 2019[151]. - Total operating revenue for 2020 was 8,026,737 thousand RMB, representing a year-on-year increase of 25.61% due to the inclusion of new environmental businesses[153]. Dividends and Shareholder Returns - The board has proposed a final cash dividend of RMB 0.43 per share for the year 2020, subject to approval at the annual general meeting[5]. - The company proposed a cash dividend of CNY 0.43 per share for the 2020 fiscal year, totaling approximately CNY 938 million, which accounts for 45.96% of the net profit attributable to ordinary shareholders[69]. Audit and Compliance - The company reported a standard unqualified audit opinion from Ernst & Young Hua Ming[4]. - There were no non-operating fund occupations by controlling shareholders or related parties during the reporting period[7]. - The company has not violated decision-making procedures for providing guarantees[7]. - The financial report is guaranteed to be true, accurate, and complete by the company's management[6]. Operational Developments - The user base increased by 15% year-on-year, reaching 2 million active users by the end of 2020[15]. - The company plans to expand its market presence by launching two new highway projects in 2021, expected to add 50 kilometers of new routes[15]. - Research and development expenses increased by 20% in 2020, focusing on new traffic management technologies[14]. - The operational efficiency improved, with a reduction in average toll collection time by 25%[14]. - The company is exploring opportunities for international expansion, particularly in Southeast Asia, with potential investments of up to 200 million RMB[15]. - The company is actively involved in the development of urban infrastructure projects through public-private partnerships (PPP) to improve service delivery[17]. Acquisitions and Investments - The company completed the acquisition of a regional competitor, which is expected to contribute an additional 300 million RMB in annual revenue[15]. - The company completed the acquisition of 89.93% of Longda Company, which was included in the consolidated financial statements starting from November 26, 2020[40]. - The company acquired 67.14% of the equity in Lande Environmental and 50% of the equity in Shenshan Qiantai during 2020, enhancing its market position[64][65]. - The company completed the acquisition of 89.93% equity in Longda Expressway on December 1, 2020[53]. Environmental Initiatives - New environmental initiatives were introduced, aiming for a 15% reduction in carbon emissions by 2025[14]. - The company is focusing on organic waste treatment as a key area for development under its large environmental industry strategy, supported by national environmental policies[116]. - The company established a wholly-owned subsidiary, Shenzhen Expressway New Energy Holdings Co., Ltd., with a registered capital of 1.4 billion yuan to focus on wind power and other clean energy investments[124]. Financial Management and Capital Structure - The company issued RMB 4 billion perpetual bonds during the reporting period, which were included in other equity instruments[35]. - The company issued CNY 10 billion in short-term financing bonds in 2020, effectively managing its funding costs[64]. - The company plans to optimize its capital structure and maintain adequate cash reserves to mitigate liquidity risks[188]. - The company actively expanded its financing channels, obtaining approval for RMB 4 billion in short-term financing and RMB 2 billion in green corporate bonds[191]. Impact of COVID-19 - The company experienced a decline in revenue during the pandemic due to a policy that exempted all vehicles from toll fees from February 17 to May 6, 2020[89]. - The company reduced toll fees for over 63 million vehicles during the pandemic, with an average of over 3,000 personnel deployed daily for epidemic prevention[92]. - The implementation of new toll policies is expected to have a long-term positive impact on operational efficiency and cost reduction in the highway sector[88]. Future Outlook - The company plans to continue expanding its market presence and investing in new technologies to enhance operational efficiency[30]. - The group plans to focus on solid waste resource management and clean energy sectors, aiming to become a leader in organic waste treatment and dismantling of old vehicles[77]. - The group is set to leverage its dual main business structure to expand into the environmental protection and clean energy sectors, while maintaining its strengths in toll road operations[83].