四川成渝高速公路(00107) - 2019 - 年度财报

Company Overview This section provides fundamental information about the company, including definitions, basic legal details, and a concise profile of its core business and financial standing Definitions This section defines key road projects, abbreviations of associated companies, and other professional terms used in the report, providing a foundational understanding - Major road projects mentioned in the report include Airport Expressway, Chengle Expressway, Chengya Expressway, and Chengyu Expressway[5] - Key subsidiaries and investment entities mentioned include Renshou Land Company, Shuhai Company, Jiaotou Construction Company, and Zhonglu Energy Company[26] Company Information This section provides the company's basic legal and contact information, including its legal name, registered address, stock exchange codes, board secretary contact, and information disclosure channels Company Details | Item | Information | | :--- | :--- | | Company Name | Sichuan Chengyu Expressway Company Limited | | A-share Code | 601107 (Shanghai Stock Exchange) | | H-share Code | 00107 (The Stock Exchange of Hong Kong Limited) | | Legal Representative | Gan Yongyi | | Registered Address | No. 252 Wuhouci Street, Chengdu, Sichuan Province, China | Company Profile Established in 1997, the company is listed in Hong Kong and Shanghai, primarily investing in, constructing, operating, and managing expressways in Sichuan Province, with total assets of approximately RMB 37.86 billion and operating 744 kilometers of expressways by end of 2019 - The company primarily holds all or a majority of equity interests in expressways within Sichuan Province, including Chengyu Expressway, Chengya Expressway, and Chengle Expressway[76] Key Indicators (as of December 31, 2019) | Indicator | Amount (RMB thousands) | | :--- | :--- | | Total Toll Road Mileage | Approximately 744 kilometers | | Total Assets | 37,860,574 | | Net Assets | 16,153,968 | Chairman's Report This report provides an overview of the company's performance, strategic initiatives, and future outlook, highlighting key achievements and challenges faced during the reporting period Performance and Dividends In 2019, net profit attributable to owners increased by 27.83% to RMB 1.086 billion, with a proposed final cash dividend of RMB 0.11 per share (tax inclusive) Performance and Proposed Dividend | Indicator | 2019 | 2018 | YoY Change | | :--- | :--- | :--- | :--- | | Profit attributable to owners (RMB thousands) | 1,086,131 | 849,638 | +27.83% | | Basic Earnings Per Share (RMB) | 0.355 | 0.278 | +27.70% | | Proposed Final Dividend Per Share (RMB) | 0.11 | - | - | 2019 Business Review The company achieved steady operational growth in 2019, with net revenue increasing by 14.45% and significant breakthroughs in its core toll road business and diversified segments - In 2019, the company's toll revenue reached RMB 3.899 billion, a 9.29% year-on-year increase; revenue from related diversified segments reached RMB 3.908 billion, accounting for 50.06% of total revenue[85] - Major breakthroughs in the core toll road business include: - Winning the bid for the Tianqiong Expressway project as the lead party - Jointly participating with other companies in the acquisition of the Istanbul Third Bridge and Northern Ring Expressway in Turkey - Completion and opening of the experimental section of the Chengle Expressway expansion project[86] - Significant achievements in diversified business segments: - Financial Investment: Financing lease company achieved growth in both revenue and profit, with an investment of RMB 69 million in China Railway Signal & Communication Corporation Limited[86] - Urban Operations: Renshou Beicheng Times project generated sales proceeds of RMB 1.01 billion[86] - Energy Sales: Zhonglu Energy Company's net profit increased by 70.26% year-on-year, achieving its best historical performance[86] - Culture, Tourism, and Education: The Dashuan River health and wellness tourism project in Lushan County entered the substantive promotion phase[87] Outlook and Strategies For 2020, the company plans to strengthen its core toll road business and diversified segments, while implementing cost control and efficiency measures to mitigate the impact of the COVID-19 toll-free policy - The company will wage a "main business offensive" to consolidate its core foundation and a "diversified industry positional battle" to strengthen business segments aligned with its main operations[89] - To address the toll-free policy during the COVID-19 pandemic, the company will implement measures such as cost control, budget adjustments, efficiency improvements, orderly resumption of work, and seeking supporting policies, striving to balance social responsibility with economic benefits[89] Management Discussion and Analysis This section provides a comprehensive review and analysis of the Group's business performance, financial results, and future development plans for the reporting period Business Review and Analysis In 2019, the Group's net revenue grew by 14.45% to RMB 7.807 billion, and net profit attributable to owners increased by 27.83% to RMB 1.086 billion, driven by strong performance in urban operations and financial investments 2019 Net Revenue and YoY Change by Business Segment | Business Segment | Net Revenue (RMB thousands) | YoY Growth Rate | | :--- | :--- | :--- | | Toll Road | 3,899,438 | 9.29% | | Financial Investment | 147,321 | 68.36% | | Urban Operations | 1,987,349 | 57.96% | | Energy Investment | 1,772,635 | -7.06% | | Total | 7,806,743 | 14.45% | Performance Summary The Group's net revenue increased by 14.45% to RMB 7.807 billion, and net profit attributable to owners grew by 27.83% to RMB 1.086 billion, with varied performance across key subsidiaries Performance of Major Subsidiaries (2019) | Company Name | Revenue (RMB thousands) | Revenue YoY | Profit (RMB thousands) | Profit YoY | | :--- | :--- | :--- | :--- | :--- | | Chengren Branch | 1,021,189 | 18.07% | 393,342 | 38.50% | | Chengle Company | 496,947 | -11.57% | 258,330 | -16.48% | | Suiguang Suixi Company | 370,984 | 30.10% | (340,573) | -20.29% (loss reduction) | | Ziyang Shunan Company | 263,957 | 19.71% | 42,424 | 469.76% | | Zhonglu Energy Company | 1,272,981 | -10.52% | 41,318 | 70.26% | | Chengyu Financial Leasing Company | 143,399 | 63.88% | 44,564 | 22.61% | Toll Road Segment Operations In 2019, total toll revenue increased by 9.28% to RMB 3.915 billion, driven by policy changes and traffic growth, though some expressways experienced declines due to construction Expressway Operating Performance (2019) | Project | Daily Average Vehicle Traffic | Traffic YoY | Toll Revenue (RMB thousands) | Revenue YoY | | :--- | :--- | :--- | :--- | :--- | | Chengyu Expressway | 23,042 | -6.56% | 944,238 | 13.74% | | Chengya Expressway | 41,596 | 3.12% | 966,357 | 5.37% | | Chengren Expressway | 40,389 | 1.31% | 1,024,965 | 18.08% | | Chengle Expressway | 28,943 | -17.95% | 498,832 | -11.57% | | Suixi Expressway | 2,929 | 10.91% | 154,873 | 52.54% | - Toll revenue growth was influenced by multiple favorable policies, including the cancellation of toll fee discounts for normally loaded trucks starting January 15, 2019, and the reclassification of 20-30 seat passenger vehicles as Class III vehicles from January 1, 2019[100][101] - Chengle Expressway and Chengbei Exit Expressway experienced negative impacts on vehicle traffic and toll revenue due to expansion and road surface treatment construction closures[111] Diversified Business Operations The diversified business segments achieved significant results in 2019, with urban operations and financial investments showing strong revenue growth, while energy investment saw a slight decline - Urban Operations: Net revenue of RMB 1.987 billion, a 57.96% year-on-year increase, primarily contributed by BT/PPP projects[112] - Energy Investment: Net revenue of RMB 1.773 billion, a 7.06% year-on-year decrease, mainly due to reduced sales of petrochemical products[112] - Financial Investment: Net revenue of RMB 147 million, a 68.36% year-on-year increase, with business covering various forms such as financing leases, trusts, and banking[112] - Culture, Tourism, and Education: As an emerging business segment, it achieved breakthroughs, with an investment intention agreement signed for the Dashuan River health and wellness tourism project in Lushan County[113] Major Investment and Financing Projects The Group advanced several major investment projects, including the RMB 22.16 billion Chengle Expressway expansion, the RMB 8.685 billion Tianqiong Expressway, and an overseas acquisition in Turkey - Chengle Expressway Expansion Project: Estimated total investment of approximately RMB 22.16 billion, with the experimental section opened in November 2019, and cumulative investment reaching RMB 2.712 billion by year-end[114] - Tianqiong Expressway Project: The company successfully won the bid as the lead party, with an estimated total investment of RMB 8.685 billion, adopting a BOT model, and a project company established for investment, construction, and operation[120][121] - Turkey Acquisition Project: Jointly with China Merchants Expressway and other companies, the Group plans to acquire a 51% equity stake in the Istanbul Third Bridge and Northern Ring Expressway project in Turkey, with the company intending to invest USD 48.195 million for a 7% stake[122] - China Railway Signal & Communication Corporation Limited A-share IPO Strategic Placement: Participated in the strategic placement with RMB 69.258 million of self-owned funds, acquiring 11.839 million shares with a 12-month lock-up period[124] Financial Review and Analysis The Group's total revenue increased by 14.45%, driven by urban operations and financial investments, while operating expenses rose by 15.32% due to construction costs, leading to a 25.67% increase in profit for the year 2019 Operating Results Summary (RMB thousands) | Indicator | 2019 | 2018 | | :--- | :--- | :--- | | Revenue | 7,806,743 | 6,820,997 | | Profit Before Tax | 1,463,539 | 1,205,912 | | Profit Attributable to Owners | 1,086,131 | 849,638 | Financial Position Summary (RMB thousands) | Indicator | December 31, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Total Non-current Assets | 28,950,380 | 28,257,374 | | Total Current Assets | 8,910,194 | 7,777,684 | | Total Assets | 37,860,574 | 36,035,058 | | Total Current Liabilities | 7,395,309 | 5,277,181 | | Total Non-current Liabilities | 14,311,297 | 15,873,478 | | Total Liabilities | 21,706,606 | 21,150,659 | | Net Assets | 16,153,968 | 14,884,399 | Operating Results Analysis Revenue growth of 14.45% was primarily driven by urban operations and financial investments, while operating expenses increased by 15.32% due to construction costs, resulting in a 27.83% increase in profit attributable to owners - Revenue growth was primarily driven by the urban operations segment (+57.96%) and the financial investment segment (+68.36%)[127][128] - Operating expenses increased by 15.32%, mainly due to a substantial 95.94% year-on-year increase in construction costs related to service concession arrangements[130] - Full-year profit attributable to owners increased by 27.83%, primarily contributed by a RMB 216 million increase in profit from the toll road segment and a RMB 78 million increase in profit from the urban operations segment[133] Financial Position Analysis As of year-end 2019, total assets grew to RMB 37.86 billion, with non-current assets increasing due to the Chengle Expressway expansion, and the debt-to-capital ratio improving to 57.33% - Non-current assets increased by RMB 693 million, primarily due to a RMB 613 million increase in service concession arrangements (Chengle Expressway expansion project)[134] - Current liabilities significantly increased by 40.14%, mainly due to the reclassification of bank and other interest-bearing loans due within one year[136] - The debt-to-capital ratio (total liabilities/total assets) was 57.33%, a decrease from 58.69% at the end of 2018[139] Cash Flow Analysis Cash and bank balances decreased by RMB 706 million to RMB 2.95 billion at year-end 2019, with operating cash flow significantly reduced due to increased trade receivables and service concession arrangements Consolidated Cash Flow Summary (RMB thousands) | Cash Flow Item | 2019 | 2018 | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 607,204 | 1,939,479 | | Net Cash Flow from/(Used in) Investing Activities | 689,180 | (536,992) | | Net Cash Flow from Financing Activities | (2,002,100) | (464,320) | | Net Increase/(Decrease) in Cash and Cash Equivalents | (705,716) | 938,167 | Business Development Plan The 2020 plan focuses on strengthening the core expressway business and diversified industries through strategic investments, capital structure optimization, cost control, and institutional innovation - Consolidate core business: Increase investment in new expressway construction and expansion of existing road networks with clear geographical advantages and good profit expectations, and actively implement a "going out" strategy to acquire high-quality expressway projects both domestically and internationally[149] - Strengthen diversification: Leverage the advantages of road network resources (vehicle flow, logistics, human flow, cash flow) to expand related business areas and improve the return on project capital[149] - Optimize capital structure: Coordinate financing plans, utilize favorable financial, fiscal, and tax policies, reasonably adjust debt levels, and effectively reduce financial expenses[150] Corporate Governance Report This report details the company's corporate governance framework, compliance with regulatory codes, and the roles and responsibilities of its board, committees, and shareholders Corporate Governance Status The company largely complied with governance codes, with minor deviations, and maintained a robust governance structure with a board, supervisory committee, and management, supported by four specialized board committees - During the reporting period, the company complied with most provisions of the HKEX Corporate Governance Code, with only two deviations: some directors were unable to attend general meetings due to official duties; and the roles of Chairman and General Manager were temporarily held by the same person[151] - The Board confirmed its responsibility for establishing, implementing, and overseeing the company's risk management and internal control systems, reviewing their effectiveness annually; in 2019, the "Internal Control Manual" was revised and improved, with overall internal control operating effectively[154][155] Shareholders and General Meetings The company ensures equal treatment for all shareholders, maintains independence from major shareholders, and adheres to a stable dividend policy with a cash payout ratio of no less than 30% of distributable profit - The company maintains complete separation from its major shareholders in five aspects: personnel, assets, finance, organization, and business, ensuring independent operation[159] - The company's cash dividend policy stipulates that if cash dividends are distributed, the ratio shall not be less than 30% of the parent company's distributable profit for the current period (whichever is lower between domestic and overseas standards)[163] Board of Directors and Directors The Board, comprising 12 members with over one-third independent non-executive directors, oversees strategic decisions and major investments, supported by four specialized committees, and provides continuous professional development for directors - The Board has four specialized committees: Audit Committee, Strategy Committee, Nomination Committee, and Remuneration and Appraisal Committee, to assist in effectively fulfilling its duties[174] - As of the end of 2019, the Board consisted of 12 members, including 4 independent non-executive directors, accounting for over one-third, meeting regulatory requirements[175] Board Committees This section details the responsibilities and annual work of the Audit, Strategy, Nomination, and Remuneration & Appraisal Committees, highlighting their oversight of financial reporting, internal control, strategic planning, and executive compensation - Audit Committee: Fulfills corporate governance functions, monitors internal control, financial reporting, and risk management procedures, and provides recommendations on the appointment of external auditors[191] - Strategy Committee: Researches and provides recommendations on the company's long-term development strategy and major investment and financing proposals[200] - Nomination Committee: Responsible for formulating the board's diversity policy, researching selection criteria and procedures for directors and senior management, and making recommendations[201] - Remuneration and Appraisal Committee: Responsible for formulating and recommending remuneration policies and conducting performance appraisals for directors and senior management[203] Directors' Report This report provides an overview of the Group's principal activities, key risks, and connected transactions during the reporting period Principal Activities The Group's principal activities involve investing in, constructing, operating, and managing expressway infrastructure projects, complemented by diversified operations across five segments - The expressways managed and operated by the Group include Chengyu Expressway, Chengya Expressway, Chengren Expressway, Chengle Expressway, Chengbei Exit Expressway, Suixi Expressway, and Suiguang Expressway[215] Principal Risks and Uncertainties The company faces policy, market, financial, and management risks, which it addresses through government engagement, project development, diversification, and enhanced internal controls - Policy Risks: Toll standard adjustments, operating period limitations, and changes in toll collection methods (cancellation of provincial border toll stations); countermeasures include strengthening communication with the government, rolling out new projects, and implementing a diversified strategy[218][219][220][221] - Market Risks: Macroeconomic fluctuations leading to changes in traffic volume, and increased competition from a denser regional road network; countermeasures include continuous monitoring of macroeconomic conditions and strengthening road network research and analysis[222][223][224] - Management Risks: Risks from daily operations (e.g., maintenance, traffic accidents) and natural disasters, as well as the long payback period and uncertainty of expressway investment projects; countermeasures include strengthening preventive maintenance, optimizing investment decision-making processes, and promoting refined management[226][227][228] Connected Transactions The Group engaged in various connected transactions, including construction, procurement, and overseas acquisitions with related parties, all conducted under fair terms and approved by independent non-executive directors - Engaged in ongoing connected transactions with Sichuan Provincial Investment Group Co., Ltd. (Sichuan Jiaotou) and its subsidiaries, including construction engineering, material procurement, office leasing, and sales agency[259][262][263] - Jointly established a joint venture with major shareholder China Merchants Expressway and other consortium members to acquire an expressway project in Turkey[258] - Subsidiary Zhonglu Energy purchased refined oil products from related party PetroChina Sichuan Sales Branch, with annual procurement amounting to approximately RMB 1.071 billion[262] Directors, Supervisors, Senior Management, and Employees This section details changes in the company's leadership team and provides an overview of its employee structure, compensation, and training initiatives Changes in Directors, Supervisors, and Senior Management The company experienced significant changes in its leadership team in 2019, including the resignation of the Chairman and Vice Chairman, and the election of new board and supervisory committee members - Mr. Zhou Liming resigned as Chairman on December 31, 2019, and Mr. Gan Yongyi was elected as the new Chairman on January 17, 2020[280] - On November 13, 2019, the company completed the re-election of its Board of Directors and Supervisory Committee, with several directors and supervisors retiring upon term expiration and a new cohort of members elected[280] Employee Information As of year-end 2019, the Group had 4,428 employees, predominantly production staff, with over 80% holding college degrees or higher, supported by performance-linked compensation, comprehensive benefits, and extensive training Employee Statistics | Item | Number of People | | :--- | :--- | | Total Employees | 4,428 | | Professional Composition | | | Production Personnel | 3,213 | | Technical Personnel | 522 | | Administrative Personnel | 523 | | Education Level | | | Postgraduate and Above | 190 | | Bachelor's Degree | 1,215 | | College Degree | 2,118 | Supervisors' Report This report presents the independent opinion of the Supervisory Committee on the company's operations, governance, financial reporting, and connected transactions for the year Independent Opinion of the Supervisory Committee The Supervisory Committee confirmed the company's lawful operations, compliant decision-making, effective internal controls, diligent performance of directors and senior management, and fair connected transactions - The company operated lawfully, with compliant decision-making procedures, and directors and senior management performed diligently, with no actions found to harm the company or shareholders' interests[305] - The company's financial reports are true and accurate, and the auditor issued a standard unqualified audit opinion[306] - The company's internal control evaluation report is comprehensive and objective, indicating a relatively complete internal control system[307] - The company's connected transactions were reasonably priced and compliant with procedures, with no insider trading[308] Independent Auditor's Report This report presents the independent auditor's opinion on the company's financial statements and highlights key audit matters identified during the audit process Audit Opinion Ernst & Young issued an unqualified audit opinion on the 2019 consolidated financial statements, affirming their fair presentation in accordance with Hong Kong Financial Reporting Standards and Companies Ordinance - The auditor believes that the consolidated financial statements fairly and accurately reflect the financial position, operating results, and cash flows of the company and the Group in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants and the disclosure requirements of the Hong Kong Companies Ordinance[311] Key Audit Matters Key audit matters included the impairment assessment of trade receivables, customer loans, and contract assets, and the amortization of service concession arrangements, both involving significant management judgment and estimation - Impairment of Trade Receivables, Customer Loans, and Contract Assets: Management is required to estimate expected credit losses (ECL) based on customer credit status, aging, forward-looking information, etc., involving significant judgment[314] - Amortization of Service Concession Arrangements: Amortization is determined using the units-of-production method, based on the proportion of estimated total vehicle traffic over the entire operating period, which involves significant judgment and estimation of factors like GDP growth and road network impact[315] Financial Statements and Notes This section comprises the consolidated financial statements and their accompanying notes, providing a detailed account of the company's financial performance, position, and cash flows Consolidated Statement of Profit or Loss and Other Comprehensive Income This statement presents the company's financial performance for 2019, showing RMB 7.807 billion in revenue, RMB 1.464 billion in profit before tax, and RMB 1.086 billion in profit attributable to owners 2019 Consolidated Statement of Profit or Loss Key Data (RMB thousands) | Indicator | 2019 | 2018 | | :--- | :--- | :--- | | Revenue | 7,806,743 | 6,820,997 | | Gross Profit | 2,305,206 | 2,072,476 | | Profit Before Tax | 1,463,539 | 1,205,912 | | Profit for the Year | 1,133,289 | 901,826 | | Profit Attributable to Owners | 1,086,131 | 849,638 | Consolidated Statement of Financial Position This statement reflects the company's financial position as of December 31, 2019, with total assets of RMB 37.861 billion, total liabilities of RMB 21.707 billion, and net assets (total equity) of RMB 16.154 billion 2019 Consolidated Statement of Financial Position Key Data (RMB thousands) | Indicator | December 31, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Total Non-current Assets | 28,950,380 | 28,257,374 | | Total Current Assets | 8,910,194 | 7,777,684 | | Total Assets | 37,860,574 | 36,035,058 | | Total Current Liabilities | 7,395,309 | 5,277,181 | | Total Non-current Liabilities | 14,311,297 | 15,873,478 | | Total Liabilities | 21,706,606 | 21,150,659 | | Net Assets | 16,153,968 | 14,884,399 | Consolidated Statement of Cash Flows This statement details the company's cash flows for 2019, with RMB 607 million net cash from operating activities, RMB 689 million net cash from investing activities, and RMB 2.002 billion net cash used in financing activities 2019 Consolidated Statement of Cash Flows Summary (RMB thousands) | Item | 2019 | 2018 | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 607,204 | 1,939,479 | | Net Cash Flow from/(Used in) Investing Activities | 689,180 | (536,992) | | Net Cash Flow from Financing Activities | (2,002,100) | (464,320) | | Net Increase/(Decrease) in Cash and Cash Equivalents | (705,716) | 938,167 | Notes to the Financial Statements This section provides detailed explanations and supplementary information to the financial statements, covering accounting policies, estimates, segment information, revenue, connected transactions, and post-balance sheet events - The notes disclose the toll-free policy implemented at the beginning of 2020 due to the COVID-19 pandemic, indicating that this event may have a significant adverse impact on the Group's financial position in 2020[577]