浙江沪杭甬(00576) - 2025 - 中期财报

Management Report Summary Strategic Direction and Business Development The Group adheres to its strategic direction, focusing on core business operations, technological innovation, governance upgrades, and green development to accelerate its transformation into an international investment holding company[1] - The Group's strategic direction is to "expand increments, extend stock, activate variables, and stabilize profitability," focusing on core business operations, technological innovation, governance upgrades, and green, low-carbon initiatives[1] - Its subsidiary, Zheshang Securities, actively seized capital market opportunities, leading to significant improvements in operating results[1] - In 2024, the Company acquired 100% equity of Yonglan Expressway, a key transportation route to the Pearl River Delta, Hong Kong, and Macau[1] Definitions Key Terms and Definitions This section defines key terms and corporate entities used in the report, ensuring a clear understanding of the content - Key entities are defined, such as "the Company" referring to Zhejiang Expressway Co, Ltd, and "Communications Group" being the Company's controlling shareholder[4] - The Group's major expressway companies (e g, Hanghui Company, Jinhua Company, Zhoushan Company) and their respective shareholding ratios are listed[4][6] - "The Period" is explicitly defined as the period from January 1, 2025, to June 30, 2025, providing a baseline for the report's timeframe[4] 2025 Interim Results Interim Financial Performance Overview The Group's H1 2025 revenue increased by 3.8% YoY to RMB 8.685 billion, with profit attributable to owners rising by 4.0% to RMB 2.787 billion, while no interim dividend was proposed 2025 H1 Interim Results Overview | Indicator | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | YoY Growth Rate | | :--- | :--- | :--- | :--- | | Revenue | 8,685,460 | 8,367,599 | 3.8% | | Profit Attributable to Owners of the Company | 2,787,480 | 2,680,010 | 4.0% | | Basic Earnings Per Share | 46.51 cents | 44.72 cents | 4.0% | | Diluted Earnings Per Share | 46.51 cents | 44.04 cents | 5.6% | - The Board of Directors recommends not to declare an interim dividend for 2025[8] - The condensed consolidated financial statements are unaudited but have been reviewed by the Audit Committee[8] Business Review Overall Business Performance In H1 2025, the Group's total revenue grew by 3.8% to RMB 8.685 billion, driven by a 13.4% increase in securities business revenue, which now constitutes 36.6% of the total - In H1 2025, China's GDP grew by 5.3% YoY, and Zhejiang Province's GDP grew by 5.8% YoY[9] 2025 H1 Revenue Composition | Business Segment | H1 2025 Revenue (RMB thousand) | H1 2024 Revenue (RMB thousand) | YoY Growth Rate | % of Total Revenue | | :--- | :--- | :--- | :--- | :--- | | Expressway Operations | 5,132,493 | 5,112,572 | 0.4% | 59.1% | | Securities Business | 3,182,990 | 2,805,936 | 13.4% | 36.6% | | Other Businesses | 369,974 | 449,091 | -17.6% | 4.3% | | Total Revenue | 8,685,457 | 8,367,599 | 3.8% | 100% | Expressway Operations Expressway toll revenue grew by 0.4% to RMB 5.132 billion amidst a 1.5% increase in traffic volume, with performance supported by regional economic growth and strategic operational enhancements - Expressway toll revenue increased by 0.4% YoY to RMB 5.132 billion, with overall traffic volume growing by 1.5% YoY[12] Expressway Segment Performance (H1 2025) | Expressway | Average Daily Full-trip Traffic Volume (vehicles) | YoY Growth Rate (Traffic) | Toll Revenue (RMB million) | YoY Growth Rate (Revenue) | | :--- | :--- | :--- | :--- | :--- | | Shanghai-Hangzhou-Ningbo Expressway | 90,928 | 2.06% | 2,400.94 | 0.8% | | Shangsan Expressway | 30,678 | -9.97% | 464.00 | -15.7% | | Jinhua Section of Yongjin Expressway | 35,155 | 4.79% | 279.18 | 3.7% | | Hanghui Expressway | 28,215 | -4.36% | 334.57 | -5.5% | | Huihang Expressway | 13,912 | 6.13% | 103.89 | 2.5% | | Zhoushan Cross-sea Bridge | 32,448 | 10.64% | 630.09 | 10.4% | | Longli-Lilong Expressway | 17,770 | 7.58% | 407.89 | 5.4% | | Zhajiasu Expressway | 43,615 | 4.13% | 243.06 | 2.7% | | Huangqunan Expressway | 13,739 | 6.54% | 268.87 | 2.6% | - The slower growth in toll revenue compared to traffic volume was mainly due to the 15% toll discount for ETC-equipped trucks implemented on April 25, 2025[14] - Zhoushan Cross-sea Bridge benefited from industrial park development and the construction of the Yong-Zhou Expressway Connection, leading to a significant increase in truck traffic[14] - Traffic on Shangsan and Hanghui Expressways declined due to construction-related traffic diversions and the opening of new competing routes[14] - The Group enhanced road network operational efficiency through measures like hard shoulder running, intelligent upgrades, and intensive construction management[15] - Successfully won the bid for the Yong-Zhou Expressway Connection (Phase II) project and acquired a 51% stake in Guisan Expressway through a joint venture investment platform, expanding its strategic regional presence[17] - Accelerated the development of green, low-carbon industries by launching new energy heavy-duty truck battery swapping stations and grid-connecting distributed photovoltaic power projects[17] - Deepened innovation-driven development, with Zhejiang Zhijiang Intelligent Transportation Technology Co, Ltd obtaining high-tech enterprise status and exploring the application of smart expressway data assetization[17] Securities Business Zheshang Securities capitalized on a stabilizing A-share market to achieve a 13.4% YoY increase in operating revenue to RMB 3.183 billion, driven by strong growth in investment income - China's capital market showed an overall trend of stabilization and recovery, supported by policy measures and economic recovery, leading to active trading in the A-share market[18] - Zheshang Securities' operating revenue increased by 13.4% YoY to RMB 3.183 billion[18] Zheshang Securities H1 2025 Revenue Breakdown | Revenue Type | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | YoY Growth Rate | | :--- | :--- | :--- | :--- | | Commission and Fee Income | 1,886,362 | 1,609,014 | 17.2% | | Interest Income | 1,296,628 | 1,196,922 | 8.3% | | Securities Investment Income | 1,416,100 | 574,768 | 146.4% | Hotel and Catering Business The Group's hotel and catering business faced continued pressure in H1 2025, with both Zhejiang Grand Hotel and Zheshang Grand Metropark Hotel experiencing slight revenue declines Hotel and Catering Business H1 2025 Revenue | Hotel Name | H1 2025 Revenue (RMB thousand) | YoY Decrease Rate | | :--- | :--- | :--- | | Zhejiang Grand Hotel | 18,910 | 4.0% | | Zheshang Grand Metropark Hotel | 30,890 | 3.8% | - Zhejiang Grand Hotel is actively exploring street stall operations to inject new momentum and counter industry pressures[19] Long-term Investments The Group's long-term investments showed mixed results, with strong profit growth from Shengxin Company and financial services, while some expressway investments declined due to construction impacts Long-term Investment Net Profit Performance (H1 2025) | Investee Entity | Business Type | H1 2025 Net Profit (RMB thousand) | YoY Growth/Change | | :--- | :--- | :--- | :--- | | Shengxin Company | Expressway | 117,110 | 46.7% | | Zhijiang Jiaokong | Expressway | 69,940 | N/A | | Hangning Company | Expressway | 201,850 | -20.3% | | Wenzhou Yongtaiwen Company | Expressway | 99,180 | -26.0% | | Zhejiang Communications Finance | Financial Services | 247,890 | 15.2% | | Changjiang Golden Leasing | Financial Leasing | 350,420 | 4.5% | | Zheshang Fund of Funds | Equity Investment | (29,010) | N/A (Net Loss) | - The decline in net profit for Hangning Expressway and Yongtaiwen Expressway was primarily due to traffic disruptions from expansion and reconstruction projects on related sections[21][22] - As of the report's publication date, Shanghai Rural Commercial Bank had not yet released its 2025 interim results[24] Financial Analysis Profitability Profit attributable to owners of the Company rose by 4.0% to RMB 2.787 billion in H1 2025, though the return on equity decreased by 8.7% to 6.0% H1 2025 Profitability Metrics | Indicator | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Profit Attributable to Owners of the Company | RMB 2.787 billion | RMB 2.680 billion | +4.0% | | Basic Earnings Per Share | RMB 46.51 cents | RMB 44.72 cents | +4.0% | | Diluted Earnings Per Share | RMB 46.51 cents | RMB 44.04 cents | +5.6% | | Return on Equity | 6.0% | 6.6% | -8.7% | Liquidity and Financial Resources As of June 30, 2025, the Group maintained strong liquidity with total current assets of RMB 183.044 billion and a net cash inflow from operating activities of RMB 4.905 billion Liquidity Metrics (as of June 30, 2025) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | RMB 183.044 billion | RMB 145.924 billion | | Current Ratio | 1.30 | 1.30 | | Current Ratio (excluding client funds from securities business) | 1.50 | 1.60 | | Net Cash Inflow from Operating Activities (during the period) | RMB 4.905 billion | RMB 6.492 billion | - Financial assets at fair value through profit or loss amounted to RMB 50.323 billion, with 54.1% invested in bonds, 26.9% in funds, and 5.5% in stocks[28] - The directors believe the Company will not face any liquidity issues in the foreseeable future[30] Borrowings and Gearing As of June 30, 2025, the Group's total interest-bearing borrowings increased to RMB 59.389 billion, with an improved interest coverage ratio of 7.5 and a gearing ratio of 67.9% Borrowings and Gearing Metrics (as of June 30, 2025) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Liabilities | RMB 176.763 billion | RMB 143.484 billion | | Total Interest-bearing Borrowings | RMB 59.389 billion | RMB 55.266 billion | | Interest Coverage Ratio (during the period) | 7.5 | 5.6 | | Gearing Ratio | 67.9% | 66.1% | | Gearing Ratio (excluding client funds from securities business) | 56.7% | 56.6% | - Of the interest-bearing borrowings, 52.9% are not repayable within one year, indicating manageable short-term repayment pressure[31] Maturity Profile of Interest-bearing Borrowings (as of June 30, 2025) | Maturity | Total (RMB thousand) | Within 1 Year (RMB thousand) | 2 to 5 Years (RMB thousand) | Over 5 Years (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Floating Rate Borrowings | 15,232,531 | 1,747,717 | 8,526,954 | 4,957,860 | | Fixed Rate Borrowings | 44,156,316 | 26,222,576 | 17,933,740 | 0 | | Total | 59,388,847 | 27,970,293 | 26,460,694 | 4,957,860 | Capital Structure As of June 30, 2025, the Group's total equity stood at RMB 83.68 billion, with the leverage ratio slightly increasing to 130.9% from 129.0% at the end of 2024 Capital Structure Overview (as of June 30, 2025) | Indicator | Amount (RMB thousand) | % of Total Capital | | :--- | :--- | :--- | | Total Equity | 83,680,104 | 32.1% | | Fixed Rate Debt | 146,446,890 | 56.2% | | Floating Rate Debt | 15,232,530 | 5.8% | | Interest-free Debt | 15,083,360 | 5.9% | | Leverage Ratio | 130.9% | N/A | - The leverage ratio increased from 129.0% as of December 31, 2024, to 130.9% as of June 30, 2025[37] Capital Expenditure Commitments and Utilisation The Group's capital expenditure for the period was RMB 504 million, with outstanding commitments of RMB 4.908 billion, primarily for expressway expansion projects H1 2025 Capital Expenditure Utilisation | Purpose | Amount (RMB thousand) | | :--- | :--- | | Expressway Expansion Projects | 304,860 | | Purchase of Equipment and Facilities | 115,420 | | Equity Investments | 51,000 | | Purchase of Properties | 32,390 | | Total | 503,670 | Capital Expenditure Commitments (as of June 30, 2025) | Purpose | Amount (RMB thousand) | | :--- | :--- | | Expressway Expansion Projects | 2,495,140 | | Purchase of Equipment and Facilities | 1,468,160 | | Equity Investments | 742,000 | | Purchase of Properties | 202,740 | | Total | 4,908,040 | - The Group will prioritize internal resources to fund its capital expenditure commitments, with any shortfall to be met through a combination of debt and equity financing channels[38] Contingent Liabilities and Pledge of Assets As of June 30, 2025, the Group had contingent liabilities and pledged assets primarily related to guarantees for bank loans and pledged toll rights for several expressways, totaling over RMB 12.4 billion - The Company, jointly with Shaoxing Communications Investment Group Co, Ltd, provided a guarantee for a bank loan of RMB 2.2 billion to Shengxin Company, with an outstanding balance of RMB 395 million as of June 30, 2025[39] - Zhoushan Cross-sea Bridge's toll rights were pledged as security for bank loans with an outstanding balance of RMB 4.787 billion[39] - Longli-Lilong Expressway's toll rights were pledged as security for bank loans with an outstanding balance of RMB 6.069 billion[39] - Zhajiasu Expressway's toll rights were pledged as security for bank loans with an outstanding balance of RMB 1.241 billion[39] Foreign Exchange Risk The Group's foreign exchange risk is limited, arising mainly from H-share dividends, Hong Kong operations, and outstanding Euro convertible bonds and USD senior notes, with no hedging instruments used during the period - The Group's main operations are settled in RMB, with foreign exchange risk exposure primarily from HKD dividend payments, Hong Kong operations, Euro convertible bonds, and USD senior fixed-rate notes[42] - The outstanding balance of the EUR 230 million zero-coupon convertible bonds issued in 2021 is EUR 27.2 million, which will be redeemed on September 9, 2025[42] - The USD 470 million senior fixed-rate notes issued in 2021 will mature in July 2026, with a coupon rate of 1.638% per annum[42] - No hedging financial instruments were used to mitigate foreign exchange risk during the period[43] Use of Proceeds from Convertible Bonds The net proceeds of approximately EUR 229 million from the EUR 230 million zero-coupon convertible bonds issued in 2021 have been fully used to repay existing borrowings - The net proceeds of approximately EUR 229 million from the EUR 230 million convertible bonds issued in 2021 have been fully used to repay existing borrowings[44] - The purpose of the issuance was to improve the debt structure, enhance liquidity, and strengthen investment capabilities[44] Use of Proceeds from Rights Issue Of the remaining RMB 5.2 billion from the 2023 rights issue, RMB 250 million was used for expressway projects in H1 2025, with the remaining RMB 5.0 billion allocated for future projects and working capital - The remaining proceeds from the 2023 rights issue amounted to RMB 5.2 billion (calculated at the exchange rate at the end of 2024)[45] - As of June 30, 2025, RMB 250 million had been used for existing expressway expansion projects[45] - Of the remaining RMB 5.0 billion, RMB 3.97 billion will be used for expressway expansion, with the rest for supplementing working capital and repaying borrowings[45] Outlook Macroeconomic Outlook In H2 2025, while the external environment faces uncertainty, China's economy is expected to maintain stable and positive growth driven by domestic demand and technological innovation - Global geopolitical tensions and trade policy adjustments will increase uncertainty in the external environment[46] - The Chinese government will adhere to the principle of seeking progress while maintaining stability, expanding domestic demand, and promoting the integration of technological and industrial innovation[46] - China's economy is expected to maintain a stable and positive growth trend, driven by coordinated macroeconomic policies and the release of domestic demand potential[46] Expressway Business Outlook The Group's expressway business will focus on enhancing operational efficiency, pursuing strategic M&A and innovative financing like REITs, and accelerating industrial transformation in energy, smart transport, and related economies - The expressway business is expected to benefit from China's stable economic growth and the resilience of Zhejiang's economy[47] - The Group will deepen its focus on its core business, strengthening accident prevention, congestion management, and scientific maintenance to improve service quality[47] - It will steadily advance capital operations, explore M&A opportunities for high-quality expressways, research innovative financing channels like REITs, and promote existing expansion projects[49] - The Group will accelerate industrial transformation, focusing on transport-energy integration (new energy heavy-duty truck charging, photovoltaic projects), smart transportation (product iteration), and road-derived economies (expanding operational businesses)[49] - It will strengthen digital and intelligent empowerment by advancing digital internal controls, building an energy management platform, and exploring business models for data asset trading[49] Securities Business Outlook Zheshang Securities will navigate market opportunities and challenges by leveraging its business strengths, supporting tech financing, expanding its client base, and integrating AI into core operations - The securities business faces opportunities from deepening capital market reforms, accelerated fintech development, and expanding cross-border financial services[51] - It also faces challenges from international financial market uncertainty, stricter industry regulation, and intensified market competition[51] - Zheshang Securities will support the equity and debt financing and M&A of technology companies, and seize emerging demands in cross-border wealth management and overseas listings[51] - It will continue its strategy of "developing new clients + activating existing clients" to expand its brokerage client base and build a distinctive wealth management brand[51] - The firm will focus on cultivating the application of Artificial Intelligence in core business scenarios such as investment research and advisory services, comprehensively promoting fintech empowerment[51] Disclosure of Interests and Other Matters Dealings in Listed Securities Neither the Company nor its subsidiaries purchased, sold, redeemed, or cancelled any of the Company's listed securities during the period - Neither the Company nor any of its subsidiaries purchased, sold, redeemed or cancelled any of the Company's listed securities during the Period[53] Disclosure of Interests of Directors, Supervisors and Chief Executive As of June 30, 2025, no directors, supervisors, or the chief executive held any disclosable interests or short positions in the shares or debentures of the Company or its associated corporations - As of June 30, 2025, none of the directors, supervisors, or the chief executive held any disclosable interests or short positions in the shares, underlying shares, or debentures of the Company or its associated corporations[54] Disclosure of Interests of Substantial Shareholders As of June 30, 2025, key substantial shareholders included Communications Group, China Merchants Expressway, BlackRock, Inc, and JP Morgan Chase & Co, with varying long and short positions in the Company's shares Interests of Substantial Shareholders (as of June 30, 2025) | Substantial Shareholder | Capacity | Number of shares held | % of Issued Share Capital | | :--- | :--- | :--- | :--- | | Communications Group | Beneficial owner (Domestic Shares) | 4,014,778,800 | 100% (Domestic Shares) | | Communications Group (via subsidiaries) | Indirect interest (H Shares) | 72,471,195 | 3.66% (H Shares) | | China Merchants Expressway | Beneficial owner (H Shares) | 363,914,280 (L) | 18.39% (H Shares) | | BlackRock, Inc | Interest of controlled corporation (H Shares) | 140,124,775 (L) | 7.08% (H Shares) | | BlackRock, Inc | Interest of controlled corporation (H Shares) | 18,924,000 (S) | 0.96% (H Shares) | | JP Morgan Chase & Co | Person having a security interest in shares (H Shares) | 123,101,175 (L) | 6.22% (H Shares) | | JP Morgan Chase & Co | Person having a security interest in shares (H Shares) | 4,768,798 (S) | 0.24% (H Shares) | | JP Morgan Chase & Co | Person having a security interest in shares (H Shares) | 77,461,881 (P) | 3.91% (H Shares) | Corporate Governance Compliance The Company complied with the code provisions of the Corporate Governance Code and the directors adhered to the Model Code for securities transactions throughout the period - The Company complied with the code provisions of the Corporate Governance Code and adopted the recommended best practices during the Period[57] - The directors confirmed full compliance with the Model Code and the Company's own code for directors' securities transactions[57] Employees and Remuneration Policy As of June 30, 2025, the Group employed 10,358 staff, with remuneration determined by market conditions and individual performance Employee Distribution (as of June 30, 2025) | Business Segment | No. of Employees on June 30, 2025 | No. of Employees on Dec 31, 2024 | | :--- | :--- | :--- | | Expressway Operations | 5,097 | 4,969 | | Securities Business | 5,261 | 5,302 | | Group Total | 10,358 | 10,271 | - Remuneration and benefits are maintained at competitive levels and are determined based on market conditions and the performance, qualifications, and experience of individual employees[60] Future Plans for Material Investments In H2 2025, the Group plans to continue several expressway expansion projects and commence construction of the Yong-Zhou Expressway Connection (Phase II), with no other material investment plans - In H2 2025, the Group plans to continue the expansion projects for Zhajiasu Expressway, the Jinhua Section, and the Shaoxing Section of Yongjin Expressway[61] - The Group plans to commence the construction of the Yong-Zhou Expressway Connection (Phase II) project[61] - Funding sources will include internal resources, borrowings (if applicable), proceeds from the rights issue, and government subsidies[61] Changes in Directors' Information There were no material changes to the directors' information during the reporting period - There were no material changes in the directors' information during the reporting period and up to the date of this report[62] Directors' Responsibility Statement The directors confirmed the fair presentation of the Group's financial position and performance in the condensed consolidated financial statements and the interim report - The directors confirm that the condensed consolidated financial statements give a true and fair view of the Group's financial position and profit[64] - The directors confirm that the management discussion and analysis in the interim report provides a fair review of the Group's business development and performance[64] - The directors confirm that the interim report provides a fair review of significant related party transactions and changes during the period[64] Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Overview of Profit or Loss and Comprehensive Income The Group's H1 2025 revenue was RMB 8.685 billion, a 3.8% YoY increase, while profit for the period grew 17.4% to RMB 3.925 billion, driven by a 146.4% surge in securities investment income Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the 6 months ended June 30, 2025) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 8,685,457 | 8,367,599 | | Cost of sales | (5,244,295) | (4,681,165) | | Gross profit | 3,441,162 | 3,686,434 | | Securities investment income | 1,416,097 | 574,768 | | Profit before tax | 4,864,215 | 4,155,754 | | Profit for the period | 3,924,615 | 3,343,806 | | Profit attributable to owners of the Company | 2,787,482 | 2,680,010 | | Basic earnings per share (RMB cents) | 46.51 | 44.72 | | Diluted earnings per share (RMB cents) | 46.51 | 44.04 | - Securities investment income surged by 146.4% YoY, serving as a key driver for the growth in profit for the period[65] - Finance costs decreased by 17.6% from RMB 910 million in 2024 to RMB 750 million in 2025[65] Condensed Consolidated Statement of Financial Position Statement of Financial Position As of June 30, 2025, the Group's total assets were RMB 260.443 billion, a 19.6% increase from year-end 2024, while total liabilities grew 23.2% to RMB 176.763 billion Condensed Consolidated Statement of Financial Position (as of June 30, 2025) | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Non-current assets | 77,398,780 | 71,258,072 | | Current assets | 183,044,097 | 145,924,295 | | Total assets | 260,442,877 | 217,182,367 | | Current liabilities | 144,392,083 | 108,265,977 | | Non-current liabilities | 32,370,690 | 35,218,026 | | Total liabilities | 176,762,773 | 143,484,003 | | Equity attributable to owners of the Company | 46,432,023 | 46,040,953 | | Non-controlling interests | 37,248,081 | 27,657,411 | | Total equity | 83,680,104 | 73,698,364 | - Goodwill increased significantly from RMB 86.867 million at year-end 2024 to RMB 749 million as of June 30, 2025, primarily due to a business combination[68][116] - Bank balances held on behalf of customers and clearing settlement funds grew by 37.5% from RMB 49.066 billion at year-end 2024 to RMB 67.491 billion[68] Condensed Consolidated Statement of Changes in Equity Analysis of Changes in Equity As of June 30, 2025, equity attributable to owners was RMB 46.432 billion, with total equity changes driven mainly by a RMB 9.0 billion increase in non-controlling interests from a subsidiary acquisition Condensed Consolidated Statement of Changes in Equity (as of June 30, 2025) | Indicator | June 30, 2025 (RMB thousand) | January 1, 2025 (RMB thousand) | | :--- | :--- | :--- | | Share capital | 5,993,801 | 5,993,801 | | Share premium | 7,805,445 | 7,805,445 | | Statutory reserve | 6,885,424 | 6,885,424 | | Capital reserve | 1,712 | 1,712 | | Revaluation reserve | 412,397 | 499,133 | | Exchange translation reserve | 8,929 | 10,992 | | Retained profits | 14,094,699 | 11,307,217 | | Subtotal of equity attributable to owners of the Company | 46,432,023 | 46,040,953 | | Non-controlling interests | 37,248,081 | 27,657,411 | | Total | 83,680,104 | 73,698,364 | - Non-controlling interests increased significantly by RMB 9.0 billion due to the acquisition of a subsidiary[72] - The distribution of the 2024 dividend, amounting to RMB 2.308 billion, led to a decrease in retained profits[72] Condensed Consolidated Statement of Cash Flows Cash Flow Overview The Group's net cash inflow from operating activities in H1 2025 was RMB 4.905 billion, a decrease from the prior year, resulting in a net decrease in cash of RMB 3.448 billion Condensed Consolidated Statement of Cash Flows (For the 6 months ended June 30, 2025) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net cash from operating activities | 4,905,185 | 6,491,968 | | Net cash used in investing activities | (5,411,598) | (7,693,002) | | Net cash used in financing activities | (2,941,154) | (1,999,731) | | Net decrease in cash and cash equivalents | (3,447,567) | (3,200,765) | | Cash and cash equivalents at beginning of period | 20,932,480 | 23,830,440 | | Cash and cash equivalents at end of period | 17,475,811 | 20,631,944 | - Net cash inflow from operating activities decreased by 24.59% YoY[74] - Net cash outflow from investing activities decreased by 29.66% YoY[74] Notes to the Condensed Consolidated Financial Statements Basis of Preparation These condensed consolidated financial statements have been prepared in accordance with Hong Kong Accounting Standard 34 and the applicable disclosure requirements of the Hong Kong Stock Exchange Listing Rules - These financial statements have been prepared in accordance with Hong Kong Accounting Standard 34 and Appendix 16 of the Listing Rules[75] Principal Accounting Policies The financial statements are prepared under the historical cost convention, with certain financial instruments measured at fair value, and the accounting policies adopted are consistent with the 2024 annual report - The financial statements are prepared under the historical cost convention, except for certain financial instruments measured at fair value[76] - The adoption of revised Hong Kong Financial Reporting Standards had no material impact on the Group's financial position, performance, or disclosures[77] Revenue and Segment Information The Group's H1 2025 total revenue was RMB 8.685 billion, with expressway operations contributing 59.1% and securities business contributing 36.6%, the latter showing strong 13.4% revenue growth Segment Revenue and Profit (For the 6 months ended June 30, 2025) | Segment | 2025 Revenue (RMB thousand) | 2024 Revenue (RMB thousand) | Revenue YoY Change | 2025 Profit (RMB thousand) | 2024 Profit (RMB thousand) | Profit YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Expressway Operations | 5,132,493 | 5,112,572 | 0.4% | 2,258,255 | 2,125,371 | 6.2% | | Securities Business | 3,182,990 | 2,805,936 | 13.4% | 1,258,411 | 803,521 | 56.6% | | Other Businesses | 369,974 | 449,091 | -17.6% | 407,949 | 414,914 | -1.7% | | Total | 8,685,457 | 8,367,599 | 3.8% | 3,924,615 | 3,343,806 | 17.4% | Major Business Revenue Breakdown (For the 6 months ended June 30, 2025) | Business Type | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Expressway operations revenue | 5,132,493 | 5,112,572 | | Securities business commission and fee income | 1,886,362 | 1,609,014 | | Securities business interest income | 1,296,628 | 1,196,922 | | Hotel and catering revenue | 49,801 | 51,791 | | Construction service revenue | 305,722 | 376,475 | | PPP business revenue | 14,451 | 20,825 | | Total | 8,685,457 | 8,367,599 | Other Income, Gains and Losses The Group's other income, gains and losses totaled RMB 231 million in H1 2025, a significant decrease from RMB 447 million in the prior year, mainly due to net foreign exchange and spot trading losses Other Income, Gains and Losses (For the 6 months ended June 30, 2025) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest income from financial institutions | 230,786 | 234,017 | | Rental income | 34,985 | 37,075 | | (Loss)/gain on fair value changes of derivative component of convertible bonds | (10,022) | 2,987 | | Net foreign exchange (loss)/gain | (36,183) | 2,914 | | Net (loss)/gain on spot trading | (97,186) | 29,297 | | Management fee income | 10,354 | 10,033 | | Compensation | 42,093 | 25,960 | | Gain on disposal of assets | 5,326 | 20,524 | | Others | 51,158 | 83,757 | | Total | 231,311 | 446,564 | - The period recorded a net foreign exchange loss of RMB 36.183 million and a net spot trading loss of RMB 97.186 million, compared to gains in the same period last year[81] Finance Costs The Group's finance costs in H1 2025 totaled RMB 750 million, a 17.6% decrease from RMB 910 million in the prior year, mainly due to lower interest expenses on borrowings and bonds Finance Costs Breakdown (For the 6 months ended June 30, 2025) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Bank and other borrowings | 245,688 | 316,129 | | Short-term financing bills | 79,260 | 14,431 | | Bonds payable | 410,041 | 450,865 | | Convertible bonds | 5,154 | 116,771 | | Lease liabilities | 11,128 | 11,759 | | Less: Capitalised interest expense | 1,737 | – | | Total | 749,534 | 909,955 | - Interest expense on convertible bonds decreased significantly from RMB 117 million in the prior year period to RMB 5.154 million[83] Profit Before Tax The Group's profit before tax for H1 2025 was RMB 4.864 billion, a 17.0% increase from RMB 4.156 billion in the prior year, driven by higher investment income and lower finance costs Items in Profit Before Tax Calculation (For the 6 months ended June 30, 2025) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 372,101 | 449,827 | | Amortisation of expressway operating rights | 1,342,873 | 1,356,384 | | Amortisation of other intangible assets | 67,170 | 53,201 | | Depreciation of right-of-use assets | 77,786 | 106,271 | - Depreciation of property, plant and equipment and depreciation of right-of-use assets both decreased[84] Income Tax Expense The Group's income tax expense for H1 2025 was RMB 940 million, a 15.8% increase from RMB 812 million in the prior year, with the corporate income tax rate for Chinese subsidiaries at 25% Income Tax Expense Breakdown (For the 6 months ended June 30, 2025) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | PRC Enterprise Income Tax | 970,386 | 572,230 | | Deferred tax | (30,786) | 239,718 | | Total | 939,600 | 811,948 | - The corporate income tax rate for Chinese subsidiaries is 25%[85] - The Group had no estimated assessable profit in Hong Kong for the period, thus no provision for Hong Kong Profits Tax was made[86] Earnings Per Share The Group's basic earnings per share for H1 2025 was RMB 46.51 cents, a 4.0% YoY increase, while diluted earnings per share was RMB 46.51 cents, a 5.6% YoY increase Earnings Per Share Data (For the 6 months ended June 30, 2025) | Indicator | 2025 (RMB thousand/thousand shares) | 2024 (RMB thousand/thousand shares) | | :--- | :--- | :--- | | Profit for the period attributable to owners of the Company | 2,787,482 | 2,680,010 | | Profit for the purpose of basic earnings per share | 2,787,482 | 2,680,010 | | Profit for the purpose of diluted earnings per share | 2,818,899 | 2,656,901 | | Number of ordinary shares for basic earnings per share | 5,993,801 | 5,993,498 | | Weighted average number of ordinary shares for diluted earnings per share | 6,032,485 | 6,032,466 | | Basic earnings per share (RMB cents) | 46.51 | 44.72 | | Diluted earnings per share (RMB cents) | 46.51 | 44.04 | Accounts Receivable As of June 30, 2025, the Group's accounts receivable (net of credit loss allowance) was RMB 1.338 billion, a 27.4% increase from year-end 2024, primarily from expressway tolls and securities business fees Accounts Receivable Overview (as of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Accounts receivable (contracts with customers) | 1,362,757 | 1,070,246 | | Less: Allowance for credit losses | (24,415) | (19,748) | | Total | 1,338,342 | 1,050,498 | Ageing Analysis of Accounts Receivable (as of June 30, 2025) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 3 months | 681,205 | 489,187 | | 3 months to 1 year | 339,549 | 391,596 | | 1 to 2 years | 257,939 | 168,839 | | Over 2 years | 59,649 | 876 | | Total | 1,338,342 | 1,050,498 | - No credit period is granted to customers of the expressway business, with accounts receivable mainly comprising toll fees[89] Loans to Customers Arising from Margin Financing Business As of June 30, 2025, the Group's loans and interest to customers from margin financing amounted to RMB 29.113 billion, a 20.18% increase from year-end 2024, secured by client collateral valued at RMB 90.054 billion - Loans and interest to customers from the margin financing business amounted to RMB 29.113 billion, a 20.18% increase[93] - The loans are secured by customers' stock securities and cash funds held as collateral[93] - The undiscounted total value of pledged stock securities as collateral for financing was RMB 90.054 billion, and cash collateral obtained from customers was RMB 6.988 billion[93] Other Receivables and Prepayments As of June 30, 2025, the Group's other receivables and prepayments totaled RMB 7.505 billion, a 41.1% increase from year-end 2024, mainly driven by a rise in trading deposits Other Receivables and Prepayments Breakdown (as of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Non-current prepayments | 517,840 | 242,873 | | Non-current receivables under government cooperation projects | 758,661 | 742,735 | | Current prepayments | 437,292 | 491,682 | | Current trading deposits | 4,691,307 | 3,296,745 | | Current standard warehouse receipts | 457,997 | – | | Current receivables under government cooperation projects | 241,912 | 246,762 | | Total | 7,504,563 | 5,317,878 | - Trading deposits increased by 42.28% from RMB 3.297 billion at year-end 2024 to RMB 4.691 billion[95] Financial Assets Purchased under Resale Agreements As of June 30, 2025, the Group's financial assets purchased under resale agreements stood at RMB 5.237 billion, with collateral fair value of RMB 10.202 billion Financial Assets Purchased under Resale Agreements Breakdown (as of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Bonds | 2,677,571 | 2,858,303 | | Stock securities | 2,660,604 | 2,734,995 | | Less: Impairment allowance | (101,310) | (102,242) | | Total | 5,236,865 | 5,491,056 | - The fair value of the collateral securities was RMB 10.202 billion[97] Accounts Payable As of June 30, 2025, the Group's accounts payable was RMB 998 million, a 12.7% decrease from year-end 2024, primarily comprising payables for expressway maintenance Ageing Analysis of Accounts Payable (as of June 30, 2025) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 3 months | 232,220 | 537,785 | | 3 months to 1 year | 283,295 | 124,735 | | 1 to 2 years | 159,807 | 132,298 | | 2 to 3 years | 56,735 | 76,991 | | Over 3 years | 265,553 | 271,397 | | Total | 997,610 | 1,143,206 | - Accounts payable within three months decreased from RMB 538 million at year-end 2024 to RMB 232 million[99] Other Payables and Accruals As of June 30, 2025, the Group's other payables and accruals stood at RMB 10.512 billion, a slight increase from year-end 2024, mainly comprising staff costs payable and trading deposits Other Payables and Accruals Breakdown (as of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Staff costs payable | 2,159,036 | 1,550,259 | | Trading deposits | 6,551,357 | 5,937,262 | | Payables to fund company clients in transit | 179,981 | 503,337 | | Consideration payable for equity | – | 779,016 | | Total | 10,511,680 | 10,132,003 | - Staff costs payable increased by 39.27% from RMB 1.55 billion at year-end 2024 to RMB 2.159 billion[100] - Payables to fund company clients in transit decreased from RMB 503 million at year-end 2024 to RMB 180 million[100] Financial Assets Sold under Repurchase Agreements As of June 30, 2025, the Group's financial assets sold under repurchase agreements increased by 33.1% to RMB 30.796 billion, primarily consisting of bonds where the Group retained substantial risks and rewards Financial Assets Sold under Repurchase Agreements Breakdown (as of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Bonds | 30,796,348 | 23,139,450 | | Total | 30,796,348 | 23,139,450 | - Repurchase agreements involve the sale of securities with a simultaneous agreement to repurchase them at a fixed price on a future date[102] - The Group has retained substantially all the credit risks, market risks, and rewards associated with the securities sold[102] Convertible Bonds The Company issued EUR 230 million zero-coupon convertible bonds in 2021, and has issued a notice to redeem all outstanding bonds on September 9, 2025 - In January 2021, the Company issued EUR 230 million principal amount of zero-coupon convertible bonds due 2026[104] - Bondholders have the right to convert the bonds into ordinary shares at an initial conversion price of HKD 8.83 per H share, with the latest conversion price being HKD 5.84[105] - The Company issued a redemption notice on July 29, 2025, to redeem all outstanding bonds on September 9, 2025[114] Movement of Convertible Bonds (as of June 30, 2025) | Item | Debt Component (RMB thousand) | Derivative Component (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | | As at December 31, 2024 | 194,709 | 30,158 | 224,867 | | Exchange realignment | 21,654 | – | 21,654 | | Interest expense | 5,154 | – | 5,154 | | Loss on fair value changes | – | 10,022 | 10,022 | | As at June 30, 2025 | 221,517 | 40,180 | 261,697 | Business Combination Zheshang Securities obtained control of Guodu Securities in May 2025 and consolidated it, resulting in goodwill of RMB 662 million from the RMB 5.373 billion acquisition cost - Zheshang Securities obtained control of Guodu Securities in May 2025 and has since included it in its consolidation scope[115] Fair Value of Guodu Securities at Acquisition Date | Item | Fair Value at Acquisition Date (RMB thousand) | | :--- | :--- | | Total assets | 37,036,994 | | Total liabilities | (23,325,838) | | Identifiable net assets | 13,711,156 | | Less: Minority interests | (9,000,056) | | Net assets acquired | 4,711,100 | | Goodwill | 662,164 | | Total cost of combination | 5,373,264 | Related Party Transactions and Balances The Group engaged in various transactions with related parties, including management services with Communications Group, road maintenance, construction costs, and financial services with associates - The Company provided management and administrative services to Communications Group and its subsidiaries, with service fees of RMB 10.354 million during the period[120] - The Group entered into road maintenance agreements with several subsidiaries of Communications Group, incurring road maintenance expenses of RMB 137 million during the period[122] - Jinhua Company and Zhajiasu Company paid RMB 231 million in construction costs to subsidiaries of Zhejiang Communications Construction Group for expressway expansion projects[122] - Zhejiang Communications Finance provided new short-term and long-term loans to Longli-Lilong Company and De'an Company, with interest expenses of RMB 11.452 million during the period[126][127] - The Group placed deposits with Zhejiang Communications Finance, recognizing interest income of RMB 34.389 million during the period[128] - Zheshang Industrial engaged in OTC derivative transactions with Zheshang Zhongtuo Group, resulting in an investment loss of RMB 2.918 million during the period[131] - Zhajiasu Company provided an entrusted loan of RMB 180 million to China Merchants Expressway, earning interest income of RMB 1.304 million during the period[132] Fair Value Measurement of Financial Instruments The Group's financial instruments are measured at fair value using a three-level hierarchy, with Level 3 instruments, including unlisted equity investments, valued using unobservable inputs - The fair value of financial instruments is measured using a three-level hierarchy: Level 1 (quoted prices in active markets), Level 2 (observable inputs), and Level 3 (unobservable inputs)[134][135] Movement of Level 3 Financial Instruments (as of June 30, 2025) | Item | Financial assets at FVTPL (RMB thousand) | Derivative financial assets (RMB thousand) | Financial liabilities at FVTPL (RMB thousand) | Derivative financial liabilities (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | As at December 31, 2024 | 471,564 | 532,726 | 300,567 | 419,781 | 1,724,638 | | Additions | 169,000 | – | – | 18,006 | 187,006 | | Disposals | (400) | (227,228) | – | (21,405) | (249,033) | | Fair value changes | 6,329 | – | (464) | (16,302) | (10,437) | | As at June 30, 2025 | 646,493 | 305,498 | 300,103 | 400,080 | 1,652,174 | - The fair value of the debt component of the 2021 convertible bonds is classified as Level 3, determined using estimated cash flows and a discount rate reflecting the Company's credit risk[149] Summary of Financial Information of the Company As of June 30, 2025, the Company's interests in subsidiaries stood at RMB 12.24 billion, with total assets of RMB 43.536 billion and total equity of RMB 25.743 billion Summary of Financial Information of the Company (as of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Interests in subsidiaries | 12,239,875 | 11,988,197 | | Amounts due from subsidiaries | 1,280,155 | 1,280,171 | | Other assets | 30,015,690 | 32,034,514 | | Total assets | 43,535,720 | 45,302,882 | | Total liabilities | 17,793,086 | 18,236,263 | | Share capital | 5,993,801 | 5,993,801 | | Reserves | 19,748,833 | 21,072,818 | | Total equity | 25,742,634 | 27,066,619 | Events After the Reporting Period The Company is planning a major asset restructuring with Zhejiang Zhenyang Development Co, Ltd, involving a share-swap merger, which is still in the planning stage and subject to regulatory approval - The Company is planning a major asset restructuring with Zhejiang Zhenyang Development Co, Ltd, through the issuance of A-shares to absorb and merge Zhenyang Development via a share swap[152] - This transaction is still in the planning stage, no formal agreement has been signed, and it is subject to approval from relevant regulatory authorities[152] Approval of the Condensed Consolidated Financial Statements The condensed consolidated financial statements were approved by the Board of Directors on August 22, 2025 - The condensed consolidated financial statements were approved by the Board of Directors on August 22, 2025[153] Corporate Information Company's Basic Information This section provides detailed corporate information for Zhejiang Expressway Co, Ltd, including its board members, legal advisors, auditors, and H-share listing details - Lists Board of Directors members including Chairman Mr Yuan Yingjie and Executive Directors Mr Wu Wei and Mr Li Wei[154] - The Company's registered office is located at 199 Wuxing Road, Shangcheng District, Hangzhou, Zhejiang Province, PRC[154] - The H-shares are listed on The Stock Exchange of Hong Kong Limited under the stock code 0576[155] Group Structure Chart Group Company and Business Structure This section presents a chart of the Group's company and business structure as of August 22, 2025, outlining its subsidiaries, associates, and joint ventures across various business segments - The chart illustrates the equity relationships between the Company and its subsidiaries, associates, and joint ventures[157] - It clearly labels the names and lengths of major expressway sections, such as the Shanghai-Hangzhou Expressway (102.6 km) and the Zhoushan Cross-sea Bridge (46.3 km)[157] - It showcases diversified business segments including financial services, investment funds, financial leasing, and banking[157] Financial Summary Key Financial Indicator Charts This section provides charts illustrating the Group's key financial indicators from 2021 to H1 2025, offering a visual overview of trends in revenue, net profit, EPS, and ROE - Charts show the revenue trend from 2021 to H1 2025, with H1 2025 revenue at RMB 8.685 billion[158][159] - Charts show the net profit trend from 2021 to H1 2025, with H1 2025 net profit at RMB 3.925 billion[160][161] - Charts show the earnings per share trend from 2021 to H1 2025, with H1 2025 EPS at RMB 46.51 cents[162][163] - Charts show the return on equity trend from 2021 to H1 2025, with H1 2025 ROE at 6.0%[164][165] Map of Expressways in Zhejiang Province Zhejiang Province Expressway Network This section provides a map of the expressway network in Zhejiang Province, visually presenting the geographical distribution of the Group's expressways and their strategic locations - The map displays the expressway network within Zhejiang Province[166][167] - It helps in understanding the geographical location and strategic advantages of the Group's expressway assets[166][167]