Yuexiu Transport Infrastructure announces the 2014 annual results

Yuexiu Transport Infrastructure Limited announces the annual results of the Company for the year ended 31 December 2014.

During the reporting year, economy of Guangdong province had a steady development with continuous adjustment and optimization of the economic structure. Meanwhile, policies on the toll road industry remained stable and favourable. In regions such as Guangdong, Shandong, Guangxi, Henan and Xinjiang, approvals were granted to some local expressways for increasing toll rates or extending concession periods. Guangdong Province implemented the measures of joint network toll collection and toll-by-weight simultaneously throughout the whole province, which enhanced the operating performance of the Group’s projects in Pearl River Delta of Guangdong Province. The Group’s projects in Guangdong such as GNSR Expressway and GWSR Expressway achieved more than 10% growth in toll revenue. The central regions benefited from factors such as the support from the government’s favourable policies and increased investment in infrastructural facilities, and the Group’s projects located there attained good overall growth. For instance, the toll revenue of Changzhu Expressway in Hunan grew by nearly 20%, helping contribute to another new high in the Group’s toll revenue, which grew by 6.0% to RMB1,859 million. Profit attributable to shareholders increased by 9.9% to RMB 609 million.

The Board has recommended payment of a final dividend of HK$0.17 per share for 2014, which together with the paid interim dividend of HK$0.11 per share, brings the total dividend for 2014 to HK$0.28 per share, representing growth of 7.7%. This also represents an annual dividend payout ratio of 61.0% (2013: 62.1%), reflecting the Group’s stable and consistent dividend policy.

To cope with the complex global economy, the central government has been pursuing steady progress in China’s economic development. In November 2014, the State Council issued “Guidance Opinions on Innovating Mechanisms of Investment and Financing for Key Sectors to Encourage Social Investments”. Such policy will be carried out in mainland China, improving toll road policies to attract social investments. This will in turn support the development of the Group’s projects.

The Group predicts that the policy on the transportation sector will be clearer and positive in 2015. On 11 March 2015, the Minister of Transport Mr. Yang Chuantang emphasized structural policy reforms will be made for toll roads, and toll road management will be strengthened. Future policy reform for toll roads will focus on four principles. The first is to adhere to the “Road Users Pay” principle; the second is on risk management for government debt; the third is to encourage social capital investment; and the fourth is to systemize and standardize information on toll roads. This is expected to provide a favourable policy foundation for the Group’s future investment and operating projects.

The Group’s projects such as GNSR Expressway, Northern Ring Road, Humen Bridge and Shantou Bay Bridge have already matured and will continue to be the major stable sources of profits for the Group. Benefiting from the rapid economic development in the central region, Han-Xiao Expressway, Changzhu Expressway and Weixu Expressway are expected to maintain continuous growth in traffic volume and toll revenue.

 
Given the rules of changes in toll collection rights and limited concession period, and provided financial stability of the Group is maintained, the Group will prudently adopt merger and acquisition to maintain long-term stable development of the asset portfolio. The Group entered into an agreement in December 2014 to acquire 70% equity interest of the Suiyuenan Expressway in Hubei. It has a toll length of 98.06 km, the longest when compared to other expressways operating by the Group. The rest of the concession period of Suiyuenan Expressway will last for more than 25 years, and will thus allow the expressway to contribute to the Group’s long-term development.

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