[Definitions](index=5&type=section&id=Item%201.%20Definitions) This chapter provides definitions and explanations for professional terms, company name abbreviations, project names, and industry-specific vocabulary used throughout the report [Company Profile and Key Financial Indicators](index=11&type=section&id=Item%202.%20Company%20Profile%20and%20Key%20Financial%20Indicators) This section provides an overview of the company's fundamental information, stock details, and a comprehensive analysis of its key financial performance and indicators over the past three years [Company Information and Stock Overview](index=11&type=section&id=Company%20Information%20and%20Stock%20Overview) Shenzhen Expressway Company Limited (SZEC) is an A+H share listed company registered in Shenzhen, with Hu Wei as its legal representative, listed on SSE and HKEX - Company's Chinese abbreviation is **深高速** (Shenzhen Expressway), and its legal representative is **Hu Wei**[18](index=18&type=chunk) Stock Information | Stock Type | Listing Exchange | Stock Abbreviation | Stock Code | | :--- | :--- | :--- | :--- | | A-share | Shanghai Stock Exchange | Shenzhen Expressway | 600548 | | H-share | The Stock Exchange of Hong Kong Limited | Shenzhen Expressway | 00548 | [Key Accounting Data and Financial Indicators for the Past Three Years](index=13&type=section&id=Key%20Accounting%20Data%20and%20Financial%20Indicators%20for%20the%20Past%20Three%20Years) In 2021, the company achieved significant performance growth, with operating revenue increasing by 35.45% to RMB 10.872 billion, and net profit attributable to shareholders increasing by 26.85% to RMB 2.606 billion Key Accounting Data (RMB) | Key Accounting Data | 2021 | 2020 | Period-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 10,871,924,008.52 | 8,026,737,099.99 | 35.45 | | Net Profit Attributable to Listed Company Shareholders | 2,606,254,756.43 | 2,054,523,306.30 | 26.85 | | Net Cash Flow from Operating Activities | 3,941,530,767.73 | 1,100,633,933.07 | 258.11 | | Net Assets Attributable to Listed Company Shareholders | 24,638,965,669.92 | 23,042,941,782.92 | 6.93 | | Total Assets | 60,613,494,756.12 | 55,144,962,042.63 | 9.92 | Key Financial Indicators | Key Financial Indicators | 2021 | 2020 | Period-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (RMB/share) | 1.110 | 0.936 | 18.59 | | Weighted Average Return on Net Assets (%) | 12.24 | 10.83 | Increased by 1.41 percentage points | 2021 Quarterly Key Financial Data (RMB) | Indicator | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 1,962,015,531.22 | 2,249,122,448.62 | 2,414,993,814.35 | 4,245,792,214.33 | | Net Profit Attributable to Listed Company Shareholders | 540,534,999.13 | 678,796,456.73 | 708,364,351.34 | 678,558,949.23 | [Annual Events](index=19&type=section&id=Item%203.%20Annual%20Events) This section highlights the company's significant milestones and strategic developments throughout the year, including major project advancements, acquisitions, financing activities, and key governance decisions [Review of Major Annual Events](index=19&type=section&id=Review%20of%20Major%20Annual%20Events) 2021 was a pivotal year for the company's strategic development, achieving significant progress in project construction, business acquisitions, financing activities, and corporate governance, including the commencement of the Jihe Expressway expansion, acquisition of Xinjiang Mulei wind power projects, issuance of USD 300 million bonds, and initiation of a strategic acquisition of Bay Area Development's controlling stake - In January, the pilot section of the Jihe Expressway expansion project commenced, and **100% equity** of Xinjiang Mulei 'Qianzhi Company' and 'Qianhui Company' was acquired[38](index=38&type=chunk) - In March, a Memorandum of Understanding was signed with Shenzhen Investment Holdings, proposing to acquire **71.83% equity** of Bay Area Development[38](index=38&type=chunk) - In July, **USD 300 million bonds** were successfully issued[39](index=39&type=chunk) - In December, the proposal to acquire **100% equity** of Shenzhen Investment Holdings Infrastructure via non-public agreement and the company's '14th Five-Year (2021-2025) Development Strategy' were both approved by the general meeting of shareholders[40](index=40&type=chunk) [Chairman's Address](index=21&type=section&id=Item%204.%20Chairman's%20Address) This section presents the Chairman's review of the company's annual performance, key achievements, and strategic vision for future development, emphasizing core business consolidation and new growth opportunities [Performance Review and Future Outlook](index=21&type=section&id=Performance%20Review%20and%20Future%20Outlook) Chairman Hu Wei summarized 2021 operating performance, with operating revenue of RMB 10.872 billion and net profit of RMB 2.606 billion, proposing a final dividend of RMB 0.62 per share, while outlining future strategies focusing on toll road expansion and environmental protection 2021 Performance Overview | Indicator | Amount | Year-on-Year Growth | | :--- | :--- | :--- | | Operating Revenue | RMB 10.872 billion | 35.45% | | Net Profit | RMB 2.606 billion | 26.85% | | Earnings Per Share | RMB 1.110 | - | | Proposed Final Dividend | RMB 0.62 per share | - | - Business Review: In 2021, the company achieved targets in key project construction, highway operations, project acquisitions, and financing activities, notably the successful strategic acquisition of Hong Kong-listed Bay Area Development[42](index=42&type=chunk) - Future Outlook: The toll road industry has entered a mature phase, with expansion and reconstruction becoming important investment opportunities, while the environmental protection industry is experiencing significant development opportunities under the 'dual carbon' goals, with the company focusing on organic waste treatment, hazardous waste disposal, and clean energy generation[44](index=44&type=chunk) - The company formulated its '14th Five-Year (2021-2025) Development Strategy', centered on toll roads and environmental protection as dual core businesses, aiming to become a leading infrastructure construction and operation service provider[46](index=46&type=chunk) [Management Discussion and Analysis](index=24&type=section&id=Item%205.%20Management%20Discussion%20and%20Analysis) This section provides an in-depth analysis of the company's business operations, industry landscape, core competencies, key operating performance, and future development strategies, including identified risks and mitigation plans [Company Business and Industry Overview](index=24&type=section&id=Company%20Business%20and%20Industry%20Overview) The company primarily invests in, constructs, and manages toll roads and environmental protection businesses, having established a dual-core business structure and multiple platforms, with the toll road industry shifting to maturity and environmental protection facing significant opportunities under 'dual carbon' strategies - The company is positioned as an urban and transportation infrastructure construction and operation service provider, having formed a dual-core business structure of **toll roads and environmental protection**[48](index=48&type=chunk)[51](index=51&type=chunk) - The toll road industry has entered a mature phase, with fewer high-quality new projects, but core road asset expansion and reconstruction present historical opportunities[57](index=57&type=chunk) - Driven by 'dual carbon' strategic goals, the solid waste resource treatment and clean energy industries face significant market opportunities, and the company has initially completed its industrial layout in these two areas[59](index=59&type=chunk)[61](index=61&type=chunk)[63](index=63&type=chunk) [Business Operations During the Reporting Period](index=30&type=section&id=Business%20Operations%20During%20the%20Reporting%20Period) In 2021, the company achieved operating revenue of RMB 10.872 billion, with toll revenue of RMB 5.893 billion (54.2%) and environmental business revenue of RMB 1.793 billion (16.5%), driven by normalized toll road operations and strategic acquisitions in environmental protection 2021 Operating Revenue Composition | Business Segment | Revenue (RMB billion) | Share of Total Revenue (%) | | :--- | :--- | :--- | | Toll Revenue | 5.893 | 54.20 | | Environmental Business Revenue | 1.793 | 16.50 | | Other Revenue | 3.186 | 29.30 | | **Total** | **10.872** | **100.00** | - Toll Road Business: Outer Ring Project Phase I performed well, with average daily toll revenue of approximately **RMB 2.52 million**; traffic volume on Yanjiang Expressway and Longda Expressway maintained good growth, and the company completed the acquisition of a controlling stake in Bay Area Development in January 2022, further consolidating its core advantages[73](index=73&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk) - Environmental Protection Business: In solid waste resource utilization, **6 existing Lande Environmental projects** entered commercial operation, and the Guangming Environmental Park project was signed and commenced construction; in clean energy, the acquisition of three Xinjiang Mulei wind power projects (totaling **299MW**) was completed, bringing the group's total controlled wind power installed capacity to **648MW**[84](index=84&type=chunk)[86](index=86&type=chunk)[88](index=88&type=chunk) - Industry-Finance Integration: Increased equity in the financial leasing company to **90.25%**, providing synergistic support for the expansion of the environmental protection core business, and holds approximately **3.44% stake** in Bank of Guizhou, generating stable investment income[99](index=99&type=chunk) [Analysis of Core Competencies During the Reporting Period](index=44&type=section&id=Analysis%20of%20Core%20Competencies%20During%20the%20Reporting%20Period) The company's core competencies are primarily its Greater Bay Area infrastructure state-owned asset platform advantage, integrated management capabilities, innovation capabilities, and strong financing platform, enabling strategic project acquisition and efficient operations - Greater Bay Area Infrastructure State-owned Asset Platform Advantage: As a platform under Shenzhen State-owned Assets, the company has an advantage in acquiring high-quality projects within the region, exemplified by the successful controlling acquisition of Bay Area Development[103](index=103&type=chunk) - Integrated Management Capabilities: The company possesses comprehensive management capabilities from investment to operation, extending these capabilities to new business areas such as solid waste resource management and clean energy[104](index=104&type=chunk) - Innovation Capabilities: Continuous innovation in business models (e.g., PPP, capital-funded development + land development) and technology application (e.g., intelligent transportation, smart environmental protection), with **333 patent authorizations** by the end of 2021[105](index=105&type=chunk) - Strong Financing Platform: Possesses A+H shares and Bay Area Development, three listing platforms, high domestic and international credit ratings, diverse and cost-effective financing channels[105](index=105&type=chunk) [Key Operating Performance During the Reporting Period](index=45&type=section&id=Key%20Operating%20Performance%20During%20the%20Reporting%20Period) In 2021, the group's net profit attributable to shareholders increased by 26.85% to RMB 2.606 billion, primarily due to contributions from new projects and recovery growth in toll road business, while maintaining a stable financial position despite increased financial expenses and decreased investment income Profit Statement and Cash Flow Statement Major Items Change (RMB thousands) | Item | Current Period (RMB thousands) | Prior Period (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 10,871,924 | 8,026,737 | 35.45 | | Operating Cost | 7,080,446 | 5,214,517 | 35.78 | | Financial Expenses | 749,134 | 491,548 | 52.40 | | Investment Income | 570,093 | 937,363 | -39.18 | | Net Cash Flow from Operating Activities | 3,941,531 | 1,100,634 | 258.11 | - Revenue growth primarily stemmed from the newly opened Outer Ring Expressway Phase I, newly acquired Mulei Wind Power projects, recovery growth in existing toll roads, and recognition of construction service revenue under concession arrangements[109](index=109&type=chunk)[111](index=111&type=chunk) - Investment income decreased mainly because of fewer property deliveries from joint venture United Land (Meilincun project), leading to a significant year-on-year decline in real estate development income[126](index=126&type=chunk)[127](index=127&type=chunk) Key Financial Ratios | Key Indicator | End of 2021 | End of 2020 | | :--- | :--- | :--- | | Asset-Liability Ratio | 54.18% | 52.35% | | Net Debt-to-Equity Ratio | 68.95% | 61.18% | [Discussion and Analysis of the Company's Future Development](index=66&type=section&id=Discussion%20and%20Analysis%20of%20the%20Company's%20Future%20Development) The company's '14th Five-Year' strategy aims to consolidate toll road advantages and expand into environmental protection and clean energy, targeting RMB 12 billion in 2022 operating revenue, with significant capital expenditure plans and identified risks including policy, operational, business expansion, financing, and construction management - '14th Five-Year' Strategic Goal: Deepen presence in the Greater Bay Area, striving to become a leading service provider in highway transportation and environmental protection infrastructure construction and operation[167](index=167&type=chunk) - 2022 Operating Target: Total operating revenue target of **RMB 12 billion**, with operating costs, administrative expenses, and selling expenses controlled at around **RMB 6.36 billion**[169](index=169&type=chunk) 2022-2024 Capital Expenditure Plan (Partial) (RMB thousands) | Project Name | 2022 (RMB thousands) | 2023 (RMB thousands) | 2024 (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Bay Area Development Acquisition | 5,363,930 | 1,992,311 | - | 7,356,241 | | Outer Ring Project | 454,726 | 644,867 | - | 1,099,593 | | Yanjiang Phase II | 641,180 | 271,875 | 12,000 | 925,055 | | Guangming Environmental Park PPP Project | 506,628 | 69,907 | - | 576,535 | - Major risks faced by the company include: policy risks (revision of toll road management regulations, stricter environmental regulations), operational management risks (ETC system, Jihe Expressway expansion impact), business expansion risks (scarcity of quality projects, intense market competition), financing risks (peak capital expenditure period), and construction management risks (multiple projects under simultaneous construction)[174](index=174&type=chunk)[175](index=175&type=chunk)[177](index=177&type=chunk)[180](index=180&type=chunk)[182](index=182&type=chunk)[184](index=184&type=chunk) [Corporate Governance](index=73&type=section&id=Item%206.%20Corporate%20Governance) This section details the company's corporate governance structure, including the roles of the board, supervisory committee, and management, along with information on directors, supervisors, senior management, employee matters, profit distribution, internal controls, and investor relations [Corporate Governance Structure and Operation](index=73&type=section&id=Corporate%20Governance%20Structure%20and%20Operation) The company has established a governance structure comprising the general meeting of shareholders, board of directors, supervisory committee, and management, adhering to SSE and HKEX governance regulations, with five specialized committees effectively operating to ensure independence and proper decision-making - The company's governance structure consists of the general meeting of shareholders, board of directors, supervisory committee, and management, with five specialized committees established: Strategy, Audit, Remuneration, Nomination, and Risk Management[187](index=187&type=chunk)[223](index=223&type=chunk) - During the reporting period, the company held **3 general meetings of shareholders**, **16 board meetings**, and **10 supervisory committee meetings**, deliberating on important proposals such as annual reports, profit distribution, major investments, and amendments to the articles of association[195](index=195&type=chunk)[215](index=215&type=chunk)[239](index=239&type=chunk) - Each specialized committee of the board fulfilled its duties, for example, the Audit Committee reviewed periodic reports and internal control reports, the Remuneration Committee reviewed executive performance appraisal plans, and the Nomination Committee completed the nomination review for directors and executives[225](index=225&type=chunk)[227](index=227&type=chunk)[228](index=228&type=chunk) [Directors, Supervisors, and Senior Management](index=77&type=section&id=Directors%2C%20Supervisors%2C%20and%20Senior%20Management) This chapter details the personal resumes, terms of office, shareholding changes, and remuneration of current and departed directors, supervisors, and senior management during the reporting period, with executive compensation linked to company performance Total Pre-tax Remuneration of Selected Executives in 2021 (RMB ten thousands) | Name | Position | Total Remuneration (RMB ten thousands) | | :--- | :--- | :--- | | Hu Wei | Chairman | 116.99 | | Liao Xiangwen | President | 140.40 | | Wang Zengjin | Executive Director | 126.81 | | Gong Taotao | Board Secretary | 127.90 | - During the reporting period, Chairman Hu Wei purchased **200,000 H-shares** of the company[197](index=197&type=chunk) - The remuneration of the company's directors, supervisors, and senior management is determined based on relevant Chinese policies or regulations, considering market levels and the company's actual situation, with recommendations from the Board's Remuneration Committee and approval by the Board or General Meeting of Shareholders[213](index=213&type=chunk)[245](index=245&type=chunk) [Employee Information and Profit Distribution](index=97&type=section&id=Employee%20Information%20and%20Profit%20Distribution) As of the end of the reporting period, the company had 7,105 employees, with 67.2% in toll collection, implementing a performance-based remuneration system and an active cash dividend policy, proposing RMB 0.62 per share for 2021 - As of the end of the reporting period, the group had a total of **7,105 employees**, of whom **4,775** were toll collection personnel, accounting for **67.2%**[240](index=240&type=chunk)[241](index=241&type=chunk) - The Board recommended a final cash dividend of **RMB 0.62 per share** (including tax) for 2021, totaling approximately **RMB 1.352 billion**, representing **55.88%** of net profit attributable to shareholders after excluding the impact of perpetual bonds[249](index=249&type=chunk) - The company formulated the '2021-2023 Shareholder Return Plan,' which stipulates that, when conditions are met, the profit distributed in cash shall not be less than **55%** of the net profit attributable to shareholders in the consolidated financial statements for the year (after deducting the impact of perpetual bonds and other items)[250](index=250&type=chunk) [Internal Control and Investor Relations](index=101&type=section&id=Internal%20Control%20and%20Investor%20Relations) The company maintains a sound and effective internal control system, with the Board confirming its effectiveness and Deloitte issuing an unqualified audit opinion, while actively managing investor relations through various communication channels - The Board issued the '2021 Annual Internal Control Evaluation Report,' concluding that the company maintained effective internal controls over financial reporting in all material aspects, with no significant deficiencies found[261](index=261&type=chunk)[262](index=262&type=chunk) - Deloitte Touche Tohmatsu Certified Public Accountants LLP, engaged by the company, audited the effectiveness of the company's internal controls over financial reporting and issued an unqualified audit opinion[264](index=264&type=chunk) - The company communicated with investors through various channels, with over **610 interactions** with investors and media reporters and approximately **30 analyst visits** during the year[300](index=300&type=chunk)[301](index=301&type=chunk) [Environmental and Social Responsibility](index=121&type=section&id=Item%207.%20Environmental%20and%20Social%20Responsibility) This section outlines the company's commitment to environmental protection and social welfare, detailing its ESG initiatives, efforts in green transformation, energy conservation, and active participation in community and rural revitalization programs [ESG Work Progress](index=121&type=section&id=ESG%20Work%20Progress) The company actively fulfills its environmental and social responsibilities, prioritizing resource conservation and ecological protection through expanding environmental businesses and using energy-efficient equipment, while engaging in volunteer services and rural revitalization efforts - The company is committed to becoming a leading enterprise in specific environmental protection segments, actively promoting pollution control, ecological protection, and climate change response[309](index=309&type=chunk) - To reduce carbon emissions, the company adopted measures such as increasing wind power project development, using energy-efficient LED lights, and installing solar water heaters in buildings[310](index=310&type=chunk) - In 2021, the company conducted **54 volunteer services**, accumulating **1,932 service hours**, and dispatched employees to Da'an Town, Lufeng City, to participate in rural revitalization work[311](index=311&type=chunk)[312](index=312&type=chunk) [Significant Matters](index=123&type=section&id=Item%208.%20Significant%20Matters) This section covers the fulfillment of key commitments, major related party transactions, significant contracts, and other important events during the reporting period, including acquisitions, bond issuances, and corporate name changes [Fulfillment of Commitments](index=123&type=section&id=Fulfillment%20of%20Commitments) During the reporting period, relevant parties strictly fulfilled their commitments, including the controlling shareholder's transfer of Bay Area Development equity to resolve horizontal competition, while Nanjing Wind Power, Lande Environmental, and Qiantai Company failed to meet 2021 performance commitments, leading to recognized compensation and goodwill impairment - To resolve horizontal competition, the company completed the acquisition of Shenzhen Investment Holdings Infrastructure on **January 11, 2022**, thereby indirectly controlling Bay Area Development and fulfilling the controlling shareholder's commitment[316](index=316&type=chunk) - Nanjing Wind Power's 2021 performance did not meet its commitment, with an estimated net loss of approximately **RMB 113 million**; the company recognized performance compensation receivable of approximately **RMB 103 million**, and accrued goodwill impairment of **RMB 110 million**[318](index=318&type=chunk) - Lande Environmental's 2021 performance did not meet its commitment, with an estimated net loss of approximately **RMB 80 million**; the company recognized performance compensation receivable of approximately **RMB 105 million**[320](index=320&type=chunk) - Qiantai Company's 2021 performance did not meet its commitment, with an estimated net profit of approximately **RMB 2.73 million**; the company recognized performance compensation receivable of approximately **RMB 4.78 million**[321](index=321&type=chunk) [Major Related Party Transactions and Significant Contracts](index=131&type=section&id=Major%20Related%20Party%20Transactions%20and%20Significant%20Contracts) The most significant related party transaction was the company's acquisition of Shenzhen Investment Holdings Infrastructure for up to HKD 10.479 billion, indirectly controlling Bay Area Development, alongside other routine related party transactions and external guarantees totaling RMB 2.304 billion, representing 9.35% of net assets - Significant Related Party Transaction: The company, through its wholly-owned subsidiary Meihua Company, acquired **100% equity** of Shenzhen Investment Holdings Infrastructure at a total cost not exceeding **HKD 10.479 billion**; this transaction was completed on **January 11, 2022**[333](index=333&type=chunk)[334](index=334&type=chunk) External Guarantees (as of end of reporting period) (RMB millions) | Item | Amount (RMB millions) | | :--- | :--- | | Total Guarantee Balance at End of Reporting Period (A) (excluding guarantees to subsidiaries) | 1,258.12 | | Total Guarantee Balance to Subsidiaries at End of Reporting Period (B) | 1,046.23 | | **Total Guarantees (A+B)** | **2,304.35** | | Total Guarantees as % of Company's Net Assets | 9.35 | [Other Significant Matters](index=139&type=section&id=Other%20Significant%20Matters) During the reporting period, the company extended the validity of its H-share issuance resolution, successfully issued USD 300 million overseas bonds and domestic green corporate bonds, initiated absorption mergers of subsidiaries, and changed its corporate name to 'Shenzhen Expressway Group Company Limited' - The validity period for the resolution on non-public issuance of up to **300 million H-shares** was extended to **March 30, 2022**[352](index=352&type=chunk) - Successfully issued **USD 300 million 5-year fixed-rate overseas bonds**, and in China issued **RMB 1.2 billion green corporate bonds** and **RMB 1 billion corporate bonds**[353](index=353&type=chunk) - The company's name changed to 'Shenzhen Expressway Group Company Limited,' with relevant industrial and commercial changes approved on **December 16, 2021**[356](index=356&type=chunk) - Significant Investments: Completed the acquisition of three Xinjiang Mulei wind power projects totaling **RMB 1.015 billion**, and purchased part of the Hanjing Financial Center property for office use at **RMB 1.559 billion**[358](index=358&type=chunk)[359](index=359&type=chunk) [Share Changes and Shareholder Information](index=148&type=section&id=Item%209.%20Share%20Changes%20and%20Shareholder%20Information) This section provides details on the company's share capital structure, including total shares, A and H share proportions, total shareholder count, and information on the top shareholders, as well as the indirect controlling shareholder and ultimate controlling party [Share Capital Structure and Shareholder Information](index=148&type=section&id=Share%20Capital%20Structure%20and%20Shareholder%20Information) During the reporting period, the company's total share capital and structure remained unchanged at 2.181 billion shares (65.72% A-shares, 34.28% H-shares), with 22,046 shareholders, and Shenzhen International as the indirect controlling shareholder - During the reporting period, the company's total number of shares and share capital structure remained unchanged, with a total share capital of **2,180,770,326 shares**[380](index=380&type=chunk) Top Three Shareholders' Shareholding (as of end of reporting period) | Shareholder Name | Number of Shares Held | Proportion (%) | | :--- | :--- | :--- | | HKSCC NOMINEES LIMITED | 730,174,042 | 33.48 | | Xintongchan Industrial Development (Shenzhen) Co., Ltd. | 654,780,000 | 30.03 | | Shenzhen Shenguanghui Highway Development Co., Ltd. | 411,459,887 | 18.87 | - The company's indirect controlling shareholder is **Shenzhen International Holdings Limited**, and the ultimate controlling party is **Shenzhen Municipal People's Government State-owned Assets Supervision and Administration Commission**[396](index=396&type=chunk)[399](index=399&type=chunk) [Bond-Related Information](index=156&type=section&id=Item%2011.%20Bond-Related%20Information) This section provides a comprehensive overview of the company's bond issuances and debt financing instruments, including details on newly issued bonds, their terms, and the utilization of raised funds for project construction and debt repayment [Corporate Bonds and Debt Financing Instruments](index=156&type=section&id=Corporate%20Bonds%20and%20Debt%20Financing%20Instruments) As of the end of the reporting period, the company had outstanding enterprise bonds, corporate bonds (including green bonds), and non-financial enterprise debt financing instruments, having successfully issued multiple tranches totaling RMB 4 billion in super short-term commercial papers, RMB 1.2 billion green corporate bonds, RMB 1 billion corporate bonds, and USD 300 million overseas bonds, with proceeds used for project construction and debt repayment - New bonds issued during the reporting period include: **RMB 1.2 billion 5-year green corporate bonds** (G21 Shengao 1, interest rate **3.49%**), **RMB 1 billion 5-year corporate bonds** (21 Shengao 01, interest rate **3.35%**), and **4 tranches totaling RMB 4 billion** in super short-term commercial papers[382](index=382&type=chunk)[384](index=384&type=chunk)[413](index=413&type=chunk) - The company issued **USD 300 million 5-year fixed-rate overseas bonds** in July 2021, with a coupon rate of **1.75%**, listed and traded on the Hong Kong Stock Exchange[385](index=385&type=chunk) - Proceeds were used according to committed purposes, primarily for project construction (e.g., repayment of Mulei Wind Farm project loans), repayment of maturing debts, etc., with no instances of non-compliant use[407](index=407&type=chunk)[416](index=416&type=chunk)[417](index=417&type=chunk) [Financial Report](index=166&type=section&id=Item%2012.%20Financial%20Report) This section presents the company's audited financial statements, including the audit report, key financial performance indicators, and detailed notes to the financial statements, providing insights into accounting policies, estimates, and financial risks [Audit Report](index=166&type=section&id=Audit%20Report) Deloitte Touche Tohmatsu Certified Public Accountants LLP issued a standard unqualified audit opinion on the company's 2021 financial statements, confirming fair presentation in accordance with accounting standards, with 'amortization of concession rights related to toll roads' identified as a key audit matter due to significant estimates - The auditing firm is **Deloitte Touche Tohmatsu Certified Public Accountants LLP**, which issued a standard unqualified audit opinion[429](index=429&type=chunk)[430](index=430&type=chunk) - A key audit matter is 'amortization of concession rights related to toll roads,' involving significant accounting estimates for predicting total traffic volume over the concession period[433](index=433&type=chunk) [Major Financial Statements](index=170&type=section&id=Major%20Financial%20Statements) Financial statements show steady growth in the company's asset size and profitability, with total assets reaching RMB 60.613 billion (up 9.92%), operating revenue RMB 10.872 billion (up 35.45%), and net profit attributable to parent company shareholders RMB 2.606 billion (up 26.85%), alongside strong operating cash flow Consolidated Balance Sheet Major Items (RMB) | Item | December 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Total Assets | 60,613,494,756.12 | 55,144,962,042.63 | | Total Liabilities | 32,841,718,416.31 | 28,865,852,158.86 | | Total Equity Attributable to Parent Company Owners | 24,638,965,669.92 | 23,042,941,782.92 | Consolidated Income Statement Major Items (RMB) | Item | 2021 Annual | 2020 Annual | | :--- | :--- | :--- | | Total Operating Revenue | 10,871,924,008.52 | 8,026,737,099.99 | | Operating Profit | 3,134,481,421.07 | 2,712,660,568.49 | | Total Profit | 3,178,144,673.41 | 2,709,466,381.23 | | Net Profit Attributable to Parent Company Shareholders | 2,606,254,756.43 | 2,054,523,306.30 | Consolidated Cash Flow Statement Major Items (RMB) | Item | 2021 Annual | 2020 Annual | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 3,941,530,767.73 | 1,100,633,933.07 | | Net Cash Flow from Investing Activities | (5,133,455,901.43) | (4,430,831,833.69) | | Net Cash Flow from Financing Activities | 1,669,296,968.31 | 3,588,278,559.52 | [Notes to Financial Statements (Summary)](index=182&type=section&id=Notes%20to%20Financial%20Statements%20(Summary)) The notes explain financial statement items, including accounting policy adoptions with no material impact, a change in accounting estimate for Changsha Ring Road concession rights, expanded consolidation scope due to acquisitions, segment information highlighting toll business as the primary profit source, and management of foreign exchange and interest rate risks - Accounting Estimate Change: Effective October 1, 2021, the unit amortization amount for Changsha Ring Road concession rights was adjusted from **RMB 5.09/vehicle** to **RMB 2.39/vehicle** due to traffic volume differences, increasing current period net profit attributable to shareholders by approximately **RMB 4.77 million**[568](index=568&type=chunk)[569](index=569&type=chunk)[570](index=570&type=chunk) - Change in Consolidation Scope: During this period, new subsidiaries including Qianzhi Company, Qianhui Company, Qianxin Company, Shanghai Zhuneng, and Ningxia Zhongwei were added through non-common control business combinations[772](index=772&type=chunk) 2021 Annual Segment Financial Information Summary (RMB) | Item | Toll Business | Environmental Business | Other | Total | | :--- | :--- | :--- | :--- | :--- | | External Transaction Revenue | 5,892,744,166.13 | 1,794,627,021.29 | 3,184,552,821.10 | 10,871,924,008.52 | | Total Profit | 2,824,406,477.97 | 312,765,317.91 | (386,093,899.62) | 3,178,144,673.41 |

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

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

Financial Performance - The company's operating revenue for the first half of the year was approximately ¥1.69 billion, a decrease of 37.71% compared to the same period last year[27]. - Net profit attributable to shareholders was approximately ¥43.92 million, reflecting a significant decline of 97.22% year-over-year[27]. - The basic earnings per share decreased to ¥0.020, down 97.22% from ¥0.724 in the previous year[28]. - The weighted average return on equity dropped to 0.24%, a decrease of 8.56 percentage points compared to the previous year[28]. - The total assets increased by 9.19% to approximately ¥49.42 billion compared to the end of the previous year[27]. - The net cash flow from operating activities was negative at approximately -¥157.42 million, a decline of 119.22% year-over-year[27]. - Non-recurring gains and losses totaled approximately ¥55.68 million, with significant contributions from foreign exchange swaps and other financial activities[30]. - The company achieved a total revenue of approximately CNY 1.687 billion in the first half of 2020, representing a year-on-year decline of 37.71%[51]. - The revenue from the main business of toll roads was 1,045,927 thousand RMB, accounting for 62.00% of total revenue, down from 81.40% in the previous year[113]. - The company reported a net profit of 43,923 thousand RMB for the first half of 2020, a decrease of 97.22% compared to 1,578,646 thousand RMB in the same period of 2019, primarily due to reduced toll revenue from the highway free policy during the pandemic[109]. Toll Revenue and Traffic Impact - The company's toll revenue was negatively impacted by government policies that exempted all vehicles from tolls from February 17 to May 6, 2020, leading to a decrease in income during the pandemic[54]. - In the first half of 2020, the overall toll revenue of the group's operated and invested toll roads significantly decreased year-on-year due to the impact of COVID-19, with a notable decline during the free toll period from January 24 to May 6[62]. - Following the resumption of toll collection on May 6, 2020, the average daily mixed traffic volume on the Meiguan Expressway increased by 9.5% to 123,000 vehicles compared to the same period in 2019[60]. - The average daily toll revenue for the Meiguan Expressway during the recovery period rose by 14.5% to RMB 439,000, indicating a positive trend post-lockdown[60]. - The average daily traffic volume and toll revenue on the Meiguan Expressway increased due to the resumption of operations by major production bases like Huawei and accelerated construction of nearby infrastructure projects[63]. Strategic Focus and Business Development - The company has identified the environmental protection industry as its second major business and has completed initial layout in this field[8]. - The company plans to continue market-oriented and innovation-driven strategies to enhance its competitive strength in specific segments[8]. - The company has established a dual main business strategy focusing on toll roads and environmental protection, actively seeking cooperation opportunities in the environmental and clean energy sectors[48]. - The company is actively engaged in the development of new projects, such as the Qinglian project and the Guangwu project, to expand its operational footprint[16]. - The company is focused on enhancing operational efficiency through the use of BIM technology, which aids in project design and management[18]. Infrastructure Projects and Investments - The company is involved in the construction and management of various infrastructure projects, including the Deep-Shan Environmental Park project and the Guizhou Longli project[16]. - The company has undertaken the construction of municipal supporting facilities for the Longda Expressway, enhancing local infrastructure[16]. - The company has signed an agreement to acquire up to 68.1045% of Blue Environmental Technology Group for no more than RMB 809.6 million, integrating it into the group for enhanced organic waste processing capabilities[79]. - The company has invested RMB 225 million to acquire 50% of Qiantai Technology Co., Ltd., which specializes in the dismantling of retired electric vehicles and battery recycling[80]. - The company is exploring land development and urban renewal opportunities as supplementary income sources beyond its main business[93]. Financial Management and Capital Structure - The company has a strong presence in the logistics sector through its subsidiary, Shenzhen International Logistics Development Co., Ltd.[18]. - The company maintains a reasonable capital structure, with a debt ratio increase attributed to higher capital expenditures and reduced revenue during the pandemic[146]. - The company has pledged assets including the Qinglian project with a total bank loan limit of 5.9 billion yuan[143]. - The company has committed RMB 450 million to the establishment of the Ring Science and Technology Industry M&A Investment Fund, with a total subscription amount of RMB 1 billion[105]. - The company has issued 2 billion RMB in short-term financing bonds and green corporate bonds to lower financing costs and optimize debt structure[155]. Corporate Governance and Compliance - The company has committed to improving corporate governance and transparency to promote stable development[179]. - The company has not engaged in any major related party transactions during the reporting period[194]. - The company has confirmed that there are no violations of decision-making procedures regarding external guarantees[199]. - The company has no major litigation or arbitration matters during the reporting period[188]. - The company has renewed the appointment of Ernst & Young Hua Ming as its auditor for the 2020 financial year[188].