浙江沪杭甬(00576) - 2022 - 年度业绩

Overall Report Summary & Key Highlights Key Financial Highlights The Group's 2022 revenue decreased by 8.4% to RMB 14.899 billion, but profit attributable to owners increased by 12.9% to RMB 5.379 billion, with basic EPS at RMB 123.85 cents and diluted EPS at RMB 117.62 cents Key Financial Indicators for 2022 | Indicator | 2022 (RMB 10 thousand) | 2021 (RMB 10 thousand) | YoY Change (%) | | :--------------- | :--------------------- | :--------------------- | :------------- | | Revenue | 1,489,873 | 1,626,260 | -8.4 | | Profit attributable to owners of the Company | 537,887 | 476,243 | 12.9 | | Basic Earnings Per Share (cents) | 123.85 | 109.65 | 12.9 | | Diluted Earnings Per Share (cents) | 117.62 | 102.50 | 14.8 | - The Board recommended a dividend of RMB 37.50 cents per share, consistent with 2021, pending approval at the Annual General Meeting[2] Consolidated Financial Statements Consolidated Income Statement The Group's 2022 consolidated income statement shows profit for the year increased to RMB 6.503 billion from RMB 6.290 billion in 2021, with total comprehensive income also rising to RMB 6.518 billion Summary of Consolidated Income and Other Comprehensive Income Statement | Indicator | 2022 (RMB thousand) | 2021 (RMB thousand) | | :------------------- | :------------------ | :------------------ | | Revenue | 14,898,730 | 16,262,601 | | Operating costs | (8,857,926) | (9,521,482) | | Gross profit | 6,040,804 | 6,741,119 | | Profit before tax | 7,542,261 | 8,164,125 | | Income tax expense | (1,039,051) | (1,873,961) | | Profit for the year | 6,503,210 | 6,290,164 | | Total comprehensive income for the year | 6,518,301 | 6,328,808 | | Profit attributable to owners of the Company | 5,378,866 | 4,762,431 | | Basic Earnings Per Share (RMB cents) | 123.85 | 109.65 | | Diluted Earnings Per Share (RMB cents) | 117.62 | 102.50 | Consolidated Balance Sheet As of December 31, 2022, total assets increased to RMB 186.406 billion from RMB 176.297 billion, with a decrease in highway operating rights but a significant increase in bank balances and settlement funds held for customers, while total liabilities rose to RMB 136.196 billion Summary of Consolidated Balance Sheet | Indicator | Dec 31, 2022 (RMB thousand) | Dec 31, 2021 (RMB thousand) | | :------------------- | :-------------------------- | :-------------------------- | | Total non-current assets | 40,276,748 | 45,453,364 | | Total current assets | 146,128,776 | 130,843,318 | | Total assets | 186,405,524 | 176,296,682 | | Total current liabilities | 101,298,754 | 97,700,214 | | Total non-current liabilities | 34,897,108 | 34,173,443 | | Total liabilities | 136,195,862 | 131,873,657 | | Equity attributable to owners of the Company | 30,918,290 | 27,150,342 | | Non-controlling interests | 19,291,372 | 17,272,683 | | Total equity | 50,209,662 | 44,423,025 | - Highway operating rights decreased from RMB 26.053 billion in 2021 to RMB 19.797 billion in 2022, while bank balances and settlement funds held for customers increased from RMB 38.393 billion to RMB 48.745 billion[6] Notes to the Financial Statements Basis of Presentation and Accounting Policies The consolidated financial statements are prepared under Hong Kong Financial Reporting Standards, primarily using the historical cost convention, with no significant impact from newly adopted revised standards - The consolidated financial statements are prepared in accordance with Hong Kong Financial Reporting Standards and include disclosures required by the Listing Rules of The Stock Exchange of Hong Kong Limited and the Hong Kong Companies Ordinance[8] - The financial statements are prepared on the historical cost basis, except for certain financial instruments measured at fair value[9] - The revised Hong Kong Financial Reporting Standards adopted this year, including HKFRS 3, HKFRS 16, HKAS 16, HKAS 37, and annual improvements, have no significant impact on the Group's financial position, performance, or disclosures[10][11] Operating Segments The Group's operating segments, including highway, securities, and other businesses, are used by key decision-makers for resource allocation and performance assessment - The Group's operating segments include: - Highway Business: Operation and management of high-grade highways, collecting tolls - Securities Business: Securities and futures brokerage, margin financing and securities lending, underwriting and sponsorship, asset management, advisory services, and proprietary securities trading - Other Businesses: Hotel operations, construction of high-grade highways, investments in other financial institutions, and other services[12] Segment Revenue and Results In 2022, highway business remained the largest revenue source, but both securities and other businesses experienced declines in revenue and profit Segment Revenue and Profit (2022 vs 2021) | Segment | 2022 Revenue (RMB thousand) | 2022 Profit (RMB thousand) | 2021 Revenue (RMB thousand) | 2021 Profit (RMB thousand) | | :--------------- | :---------------------- | :---------------------- | :---------------------- | :---------------------- | | Highway Business | 8,660,333 | 4,041,889 | 9,607,199 | 3,194,046 | | Securities Business | 6,080,383 | 1,709,964 | 6,403,024 | 2,372,970 | | Other Businesses | 158,014 | 751,357 | 252,378 | 723,148 | | Total | 14,898,730 | 6,503,210 | 16,262,601 | 6,290,164 | Segment Assets and Liabilities As of December 31, 2022, the securities business segment held the highest total assets and liabilities, while highway business assets and liabilities both decreased Segment Assets and Liabilities (Dec 31, 2022 vs Dec 31, 2021) | Segment | 2022 Assets (RMB thousand) | 2021 Assets (RMB thousand) | 2022 Liabilities (RMB thousand) | 2021 Liabilities (RMB thousand) | | :--------------- | :---------------------- | :---------------------- | :---------------------- | :---------------------- | | Highway Business | 39,363,170 | 41,373,465 | (25,795,642) | (29,592,173) | | Securities Business | 137,584,981 | 125,941,428 | (109,660,591) | (101,422,949) | | Other Businesses | 9,370,506 | 8,894,922 | (739,629) | (858,535) | | Consolidated Assets (Liabilities) | 186,405,524 | 176,296,682 | (136,195,862) | (131,873,657) | Other Segment Information Segments show differences in income tax expense, interest income/expense, impairment losses, and non-current asset additions, with highway business having the largest depreciation and amortization Other Segment Information (2022 vs 2021) | Indicator | Highway Business 2022 (RMB thousand) | Securities Business 2022 (RMB thousand) | Other Businesses 2022 (RMB thousand) | Total 2022 (RMB thousand) | | :------------------- | :----------------------------- | :------------------------- | :------------------------- | :--------------------- | | Income tax expense | 638,475 | 395,486 | 5,090 | 1,039,051 | | Interest expense | 912,896 | 828,543 | 28,569 | 1,770,008 | | Additions to non-current assets | 1,444,064 | 285,226 | 30,771 | 1,760,061 | | Depreciation and amortization | 3,053,188 | 295,510 | 36,292 | 3,384,990 | | Gain on disposal of subsidiaries | 1,881,262 | – | – | 1,881,262 | | | Highway Business 2021 (RMB thousand) | Securities Business 2021 (RMB thousand) | Other Businesses 2021 (RMB thousand) | Total 2021 (RMB thousand) | | Income tax expense | 1,152,881 | 718,789 | 2,291 | 1,873,961 | | Interest expense | 981,865 | 928,099 | 32,569 | 1,942,533 | | Additions to non-current assets | 6,409,180 | 503,291 | 44,056 | 6,956,527 | | Depreciation and amortization | 2,918,751 | 263,107 | 36,607 | 3,218,465 | Major Business Revenue Analysis The Group's 2022 total revenue was RMB 14.899 billion, with highway business as the largest contributor; securities commission and fee income decreased, but interest income increased Major Business Revenue (2022 vs 2021) | Business Category | 2022 (RMB thousand) | 2021 (RMB thousand) | | :----------------- | :------------------ | :------------------ | | Highway Business Revenue | 8,660,333 | 9,607,199 | | Securities Business Commission and Fee Income | 3,689,947 | 4,155,663 | | Securities Business Interest Income | 2,390,436 | 2,247,361 | | Hotel and Catering Revenue | 88,143 | 113,526 | | PPP Business Revenue | 69,871 | 138,852 | | Total | 14,898,730 | 16,262,601 | Other Income and Gains/Losses Total other income and gains/losses for 2022 significantly increased to RMB 2.094 billion from RMB 733 million in 2021, primarily due to gains from disposal of subsidiaries Other Income and Gains/Losses (2022 vs 2021) | Item | 2022 (RMB thousand) | 2021 (RMB thousand) | | :------------------------- | :------------------ | :------------------ | | Interest income from financial institutions | 142,358 | 119,027 | | Rental income | 70,875 | 89,441 | | Gain from fair value changes of derivative component of convertible bonds | 31,951 | 27,453 | | Net exchange (loss) gain | (229,412) | 231,659 | | Net (loss) gain from spot transactions | (37,237) | 43,716 | | Government grants | 72,031 | 51,155 | | Gain on disposal of subsidiaries | 1,881,262 | – | | Total | 2,093,933 | 733,071 | - Gain from disposal of subsidiaries in 2022 was RMB 1.881 billion, primarily from Zhejiang Shenjiahuhang Expressway Co Ltd ceasing to be a subsidiary after the issuance of the CICC-Zhejiang Expressway-Shenjiahuhang Expressway Asset-Backed Special Plan (Private REITs)[21] Income Tax Expense The Group's 2022 income tax expense significantly decreased to RMB 1.039 billion from RMB 1.874 billion in 2021, mainly due to lower profit before tax and tax effects of non-taxable income Income Tax Expense (2022 vs 2021) | Item | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--------- | :------------------ | :------------------ | | Current tax | 1,081,139 | 1,810,332 | | Deferred tax | (42,088) | 63,629 | | Total | 1,039,051 | 1,873,961 | Tax Expense and Profit Before Tax Reconciliation | Adjustment Item | 2022 (RMB thousand) | 2021 (RMB thousand) | | :----------------------- | :------------------ | :------------------ | | Profit before tax | 7,542,261 | 8,164,125 | | Tax at China Enterprise Income Tax rate of 25% | 1,885,565 | 2,041,031 | | Tax effect of share of profits of associates | (188,022) | (241,519) | | Tax effect of non-taxable income | (620,275) | (63,415) | | Income tax expense for the year | 1,039,051 | 1,873,961 | Dividends and Earnings Per Share The Group distributed RMB 1.629 billion in dividends for 2022 and proposed a dividend of RMB 37.50 cents per share, with both basic and diluted earnings per share increasing Dividend Distribution (2022 vs 2021) | Item | 2022 (RMB thousand) | 2021 (RMB thousand) | | :------------- | :------------------ | :------------------ | | Dividends paid during the year | 1,628,668 | 1,541,806 | - The Board recommended a dividend of RMB 37.5 cents per share for the year ended December 31, 2022, totaling RMB 1.629 billion, consistent with 2021[24] Earnings Per Share Calculation (2022 vs 2021) | Indicator | 2022 (RMB thousand/thousand shares) | 2021 (RMB thousand/thousand shares) | | :----------------------- | :-------------------------- | :-------------------------- | | Profit for the year attributable to owners of the Company | 5,378,866 | 4,762,431 | | Profit for basic EPS calculation | 5,378,866 | 4,762,431 | | Profit for diluted EPS calculation | 5,427,261 | 4,702,924 | | Number of ordinary shares for basic EPS calculation | 4,343,115 | 4,343,115 | | Weighted average number of ordinary shares for diluted EPS calculation | 4,614,399 | 4,588,176 | Accounts Receivable The Group's total accounts receivable increased to RMB 554 million at the end of 2022, primarily from highway tolls, with the largest portion due within three months Accounts Receivable Composition (Dec 31, 2022 vs Dec 31, 2021) | Item | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--------------- | :------------------ | :------------------ | | Contracts with customers | 560,701 | 473,691 | | Less: Provision for credit losses | (6,333) | (5,799) | | Total | 554,368 | 467,892 | - Accounts receivable for the highway business primarily consist of tolls due from Zhejiang and Anhui Provincial Highway Toll Settlement Centers, with no credit period[26] Accounts Receivable Ageing Analysis (Dec 31, 2022 vs Dec 31, 2021) | Ageing | 2022 (RMB thousand) | 2021 (RMB thousand) | | :----------- | :------------------ | :------------------ | | Within 3 months | 349,646 | 335,308 | | 3 months to 1 year | 181,217 | 121,753 | | 1 to 2 years | 21,025 | 7,554 | | Over 2 years | 2,480 | 3,277 | | Total | 554,368 | 467,892 | Accounts Payable The Group's total accounts payable decreased to RMB 1.160 billion at the end of 2022 from RMB 1.388 billion in 2021, mainly for highway maintenance and construction, with the largest portion due within three months - Accounts payable primarily relate to expenses for highway maintenance and high-grade highway construction[29] Accounts Payable Ageing Analysis (Dec 31, 2022 vs Dec 31, 2021) | Ageing | 2022 (RMB thousand) | 2021 (RMB thousand) | | :----------- | :------------------ | :------------------ | | Within 3 months | 655,734 | 875,632 | | 3 months to 1 year | 139,613 | 114,352 | | 1 to 2 years | 102,852 | 87,079 | | 2 to 3 years | 39,269 | 62,461 | | Over 3 years | 222,365 | 248,009 | | Total | 1,159,833 | 1,387,533 | Convertible Bonds The Group issued two types of convertible bonds, a 2021 Euro zero-coupon bond and a 2022 RMB bond by its subsidiary Zheshang Securities, both with conversion and redemption rights impacting financial statements Convertible Bonds 2021 In 2021, the Company issued a EUR 230 million zero-coupon convertible bond due in 2026, comprising debt and derivative components, with conversion and redemption rights for both the Company and holders - A zero-coupon convertible bond with a principal amount of EUR 230 million was issued on January 20, 2021, due in 2026, and listed on the Stock Exchange[30] - Conversion right: Holders can convert into ordinary shares between March 2, 2021, and January 10, 2026, at an initial conversion price of HKD 8.83 per H share (most recently HKD 7.80)[31] - Redemption right: The Company may redeem under specific conditions (e.g., H-share closing price reaching 130% of conversion price or unredeemed principal falling below 10%), and holders can exercise a put option on January 20, 2024[33][34][35] Convertible Bonds 2021 Debt and Derivative Component Changes (Dec 31, 2022) | Item | Debt Component (RMB thousand) | Derivative Component in P&L (RMB thousand) | Total (RMB thousand) | | :----------------------- | :-------------------- | :-------------------------- | :---------------- | | As at December 31, 2021 | 1,374,445 | 340,217 | 1,714,662 | | Exchange realignment | 37,073 | – | 37,073 | | Interest expense | 68,617 | – | 68,617 | | Gain from fair value changes | – | (31,951) | (31,951) | | As at December 31, 2022 | 1,480,135 | 308,266 | 1,788,401 | Convertible Bonds 2022 In 2022, subsidiary Zheshang Securities issued an RMB 7 billion convertible bond due in 2028, comprising debt and equity components, with conversion and conditional redemption rights - On June 14, 2022, subsidiary Zheshang Securities issued a convertible bond with a principal amount of RMB 7 billion, due in 2028, and listed on the Shanghai Stock Exchange[37] - Conversion right: Holders can convert into ordinary shares between December 20, 2022, and June 13, 2028, at an initial conversion price of RMB 10.49 per share (RMB 10.32 as of December 31, 2022)[38] - Redemption right: Redeemable at 106% of face value at maturity; conditional redemption includes stock closing price not less than 130% of conversion price or outstanding unconverted amount less than RMB 30 million[39][40] Convertible Bonds 2022 Debt and Equity Component Changes (Dec 31, 2022) | Item | Debt Component (RMB thousand) | Equity Component (RMB thousand) | Total (RMB thousand) | | :----------------------- | :-------------------- | :-------------------- | :---------------- | | Issued on June 14, 2022 | 2,856,082 | 310,732 | 3,166,814 | | Transaction costs | (12,782) | (1,387) | (14,169) | | Interest expense | 71,825 | – | 71,825 | | Increase | 1,008,644 | 166,912 | 1,175,556 | | Conversion | (97) | (10) | (107) | | As at December 31, 2022 | 3,923,672 | 476,247 | 4,399,919 | Business Review Overall Business Performance In 2022, global economic slowdown and recurring domestic epidemics impacted the Group's business, leading to an 8.4% year-on-year decrease in total revenue, with both highway toll and securities business revenues declining - In 2022, global economic slowdown and recurring domestic epidemics led to a significant decrease in the Group's highway toll revenue and securities business revenue[43] Total Revenue by Business Segment (2022) | Business Category | 2022 Revenue (RMB thousand) | % of Total Revenue (%) | | :--------------- | :---------------------- | :--------------- | | Highway Business | 8,660,333 | 58.1 | | Securities Business | 6,080,383 | 40.8 | | Other Businesses | 158,014 | 1.1 | | Total Revenue | 14,898,730 | 100 | Highway Business In 2022, highway business saw significant declines in traffic and toll revenue due to recurring epidemics, network changes, and policy adjustments; the Group responded with smart upgrades, differentiated pricing, and private REITs issuance - Highway business was negatively impacted by recurring epidemics, strict control measures, network changes (e.g., opening of Hangzhou-Taizhou High-speed Railway), and toll policy adjustments (e.g., 10% toll reduction for trucks), leading to significant declines in traffic volume and toll revenue[45][46] - The Group actively responded by completing smart upgrades for HSR-Hangzhou-Ningbo Expressway, promoting differentiated pricing and "highway + tourism" marketing, and successfully issuing RMB 6.317 billion in Shenjiahuhang Private REITs to revitalize existing assets[46] Toll Revenue and Traffic Volume Changes by Highway Section (2022) | Section | Average Daily Full-Journey Traffic Volume (vehicles) | YoY Change (%) | Toll Revenue (RMB million) | YoY Change (%) | | :--------------- | :----------------------------------- | :------------- | :------------------------- | :------------- | | HSR-Hangzhou-Ningbo Expressway | 67,314 | -8.94 | 3,971.71 | -7.4 | | Shangsan Expressway | 27,383 | -19.14 | 984.74 | -19.6 | | Yongjin Expressway Jinhua Section | 26,698 | -13.58 | 466.33 | -14.0 | | Shenjiahuhang Expressway | 29,958 | -13.23 | 619.17 | -20.4 | | Zhoushan Cross-sea Bridge | 20,349 | -8.26 | 827.69 | -11.4 | | Zha-Jia-Su Expressway | 31,470 | -16.99 | 389.62 | 18.6 | Securities Business In 2022, securities business performed poorly due to global capital market shocks and domestic economic downturn, with declining investment and investment banking revenues; Zheshang Securities supported growth through mixed-ownership reform and convertible bond issuance - Global capital market shocks and domestic economic downturn led to a sluggish overall performance in the securities business, with declining revenues from securities investment and investment banking[49] - Zheshang Securities completed mixed-ownership reform of Zheshang Futures, raising approximately RMB 1.73 billion, and successfully issued RMB 7 billion in convertible bonds to support capital-driven business development[49] Securities Business Revenue Composition (2022 vs 2021) | Item | 2022 (RMB thousand) | 2021 (RMB thousand) | YoY Change (%) | | :----------------- | :------------------ | :------------------ | :----------- | | Total Securities Business Revenue | 6,080,383 | 6,403,024 | -5.0 | | Commission and Fee Income | 3,689,947 | 4,155,663 | -11.2 | | Interest Income | 2,390,436 | 2,247,361 | 6.4 | | Securities Investment Income | 679,734 | 1,835,563 | -62.9 | Hotel and Catering Business In 2022, the hotel and catering business faced sustained pressure and significant revenue decline due to recurring domestic epidemics suppressing business travel and offline consumption demand - Recurring domestic epidemics severely suppressed business travel and offline consumption demand, leading to sustained operational pressure for the Group's two hotels[50] Hotel and Catering Business Revenue (2022 vs 2021) | Hotel Name | 2022 Revenue (RMB 10 thousand) | 2021 Revenue (RMB 10 thousand) | | :----------------- | :----------------------- | :----------------------- | | Zhejiang Grand Hotel Co Ltd | 2,349 | 4,545 | | Zheshang Kaiyuan Mingdu Hotel | 6,466 | 6,808 | Long-term Investments The Group's long-term investments, including joint ventures and associates, showed mixed performance in 2022, with some associates achieving net profit growth while others faced losses - Joint venture Shengxin Company (Yongjin Expressway Shaoxing Section) reported a net profit of RMB 99.54 million in 2022, a year-on-year decrease[51] - Associate Zhejiang Hangning Expressway Co Ltd reported a net profit of RMB 208 million in 2022, an increase[51] - Associate Zhejiang Zheshang Transformation and Upgrading Mother Fund Partnership (Limited Partnership) reported a net loss attributable to the Company of RMB 40.99 million in 2022, compared to a net profit of RMB 178 million in 2021[51] Financial Analysis Profitability Analysis The Group's 2022 profit attributable to owners increased by 12.9% year-on-year, with growth in both basic and diluted EPS, though return on equity slightly decreased Profitability Indicators (2022 vs 2021) | Indicator | 2022 (RMB 10 thousand) | 2021 (RMB 10 thousand) | YoY Change (%) | | :------------------- | :--------------------- | :--------------------- | :----------- | | Profit attributable to owners of the Company | 537,887 | 476,243 | 12.9 | | Basic Earnings Per Share (cents) | 123.85 | 109.65 | 12.9 | | Diluted Earnings Per Share (cents) | 117.62 | 102.50 | 14.8 | | Return on Equity (%) | 17.4 | 18.0 | -0.6 | Liquidity and Financial Resources As of end-2022, total current assets grew to RMB 146.129 billion, liquidity ratios (including after excluding client funds from securities business) improved, and net cash inflow from operating activities was RMB 7.641 billion Current Assets Composition (Dec 31, 2022 vs Dec 31, 2021) | Item | 2022 (RMB 10 thousand) | % of Total (%) | 2021 (RMB 10 thousand) | % of Total (%) | | :--------------------------------- | :------------------- | :------- | :------------------- | :------- | | Total current assets | 14,612,878 | 100 | 13,084,332 | 100 | | Bank balances, settlement funds, deposits and cash | 2,429,100 | 16.6 | 1,769,910 | 13.5 | | Bank balances and settlement funds held for customers | 4,874,480 | 33.4 | 3,839,280 | 29.3 | | Financial assets at fair value through profit or loss | 4,378,994 | 30.0 | 4,544,571 | 34.7 | | Client loans from margin financing and securities lending business | 1,755,727 | 12.0 | 1,939,413 | 14.8 | Current Ratios (Dec 31, 2022 vs Dec 31, 2021) | Indicator | 2022 | 2021 | | :--------------- | :----- | :----- | | Current Ratio | 1.40 | 1.30 | | Current Ratio excluding client funds from securities business | 1.80 | 1.60 | - Net cash inflow from operating activities for the period was RMB 7.641 billion[53] Borrowings and Solvency As of end-2022, total liabilities were RMB 136.196 billion, interest-bearing borrowings decreased by 8.1% to RMB 49.697 billion, profit to interest coverage was 5.3, and debt-to-asset ratios (including after excluding client funds from securities business) both decreased Total Liabilities Composition (Dec 31, 2022) | Item | % of Total (%) | | :--------------------- | :------- | | Bank and other borrowings | 12.6 | | Short-term financing payable | 2.6 | | Bonds payable | 17.1 | | Financial assets sold under repurchase agreements | 17.5 | | Client funds from securities business | 35.6 | - Total interest-bearing borrowings were RMB 49.697 billion, an 8.1% decrease from end-2021, with 68.6% not repayable within one year[54] - Profit to interest coverage ratio for 2022 was 5.3 (2021: 5.2)[54] Debt-to-Asset Ratios (Dec 31, 2022 vs Dec 31, 2021) | Indicator | 2022 (%) | 2021 (%) | | :--------------- | :--------- | :--------- | | Debt-to-Asset Ratio | 73.1 | 74.8 | | Debt-to-Asset Ratio excluding client funds from securities business | 63.7 | 68.0 | Capital Structure As of end-2022, the Group's total equity was RMB 50.210 billion, with fixed-rate debt being the largest component of total capital, and the leverage ratio decreased - The Group's total equity was RMB 50.210 billion[56] Total Capital Composition (Dec 31, 2022) | Debt Type | Amount (RMB 10 thousand) | % of Total Capital (%) | | :------------- | :----------------- | :--------------------- | | Fixed-rate debt | 10,695,498 | 57.4 | | Floating-rate debt | 1,616,074 | 8.7 | | Interest-free debt | 1,308,014 | 7.0 | - The leverage ratio (total debt less client funds from securities business divided by total equity) was 174.8%, a decrease from 211.2% in 2021[56] Capital Expenditure Commitments and Usage Capital expenditure for the period was RMB 1.712 billion, primarily for equipment and facility construction; as of end-2022, total capital expenditure commitments were RMB 5.731 billion, mainly for highway renovation and expansion projects Capital Expenditure Usage (2022) | Item | Amount (RMB 10 thousand) | | :----------------- | :----------------- | | Equity investments | 8,000 | | Construction of buildings | 14,044 | | Construction of equipment, facilities and ancillary facilities | 149,150 | | Total | 171,194 | Capital Expenditure Commitments (Dec 31, 2022) | Item | Amount (RMB 10 thousand) | | :----------------- | :----------------- | | Equity investments | 86,025 | | Construction of buildings | 115,629 | | Construction of equipment, facilities and ancillary facilities | 121,443 | | Highway renovation and expansion projects | 250,000 | | Total | 573,097 | Contingent Liabilities and Asset Pledges As of end-2022, the Group had bank loan guarantees for joint ventures and subsidiary bank loans secured by highway toll rights or trade receivables - The Company provided guarantees for joint venture Shengxin Company's bank loans of RMB 2.2 billion, with an outstanding balance of RMB 643 million as of December 31, 2022[58] - Subsidiary Zhejiang Zhoushan Cross-sea Bridge Co Ltd pledged highway toll rights, with an outstanding bank loan balance of RMB 5.722 billion[58] - Subsidiary Zhejiang Longli Lilong Expressway Co Ltd pledged highway toll rights, with an outstanding bank and other borrowings balance of RMB 4.640 billion[59] Foreign Exchange Risk The Group's primary business is settled in RMB, but it faces foreign exchange exposure to HKD, EUR, and USD from H-share dividends, Hong Kong operations, and issued Euro and USD bonds - The Group's main business is settled in RMB, but it has foreign exchange risk exposure to HKD (H-share dividends), EUR (2021 Euro convertible bonds), and USD (2021 senior fixed-rate bonds)[60] - The Group did not use other hedging financial instruments during the period[60] Outlook and Other Information Business Outlook For 2023, with optimized epidemic control and pro-growth policies, China's economy is expected to recover steadily; the Group anticipates high growth in highway business and new opportunities and challenges in securities - China's economy is expected to recover steadily in 2023, with the Group's highway traffic volume and toll revenue anticipated to achieve higher growth due to a low base effect[61] - The highway business will focus on market-oriented operations, deepen reform and innovation, enhance digitalization, and explore differentiated toll models and roadside resource development[62] - The securities business will face opportunities and challenges from the stock issuance registration system reform; Zheshang Securities will accelerate investment banking talent development, client acquisition, investment innovation, and build a synergistic business development system[62] Significant Events After Reporting Period No significant events with a material impact on the Group have occurred since the end of the reporting period - No significant events with a material impact on the Group have occurred since the end of the reporting period[63] Dividend Distribution Details The Company expects to pay the proposed dividend of RMB 37.50 cents per share on or about June 30, 2023, subject to approval at the Annual General Meeting - Subject to shareholder approval at the Annual General Meeting on May 4, 2023, the Company expects to pay a dividend of RMB 37.50 cents per share on or about June 30, 2023[64] Share Transfer Suspension and Record Dates To determine eligibility for the Annual General Meeting and proposed dividend, the Company will suspend H-share transfer registration on specific dates and set corresponding record dates - H-share transfer registration will be suspended from April 28 to May 4, 2023, and from May 10 to May 15, 2023[65] - The record date for the Annual General Meeting is May 4, 2023, and for the proposed dividend is May 15, 2023[65] Compliance and Publication The Company complied with the Corporate Governance Code in Appendix 14 of the Listing Rules during the reporting period and published its annual results announcement and annual report on the Stock Exchange and company websites - The Company complied with the code provisions of the Corporate Governance Code set out in Appendix 14 of the Listing Rules during the period[66] - The annual results announcement was published on the Stock Exchange website (www.hkexnews.hk) and the Company's website (www.zjec.com.cn)[67](index=67&type=chunk)