Revenue Reached RMB1.25 billion; Net profits increased by 40%
(March 16, 2011, Hong Kong) — GZI Transport Limited (“GZI Transport” or the “Company”) (Stock Code: 1052) announced today the annual results of the Company and its subsidiaries (the “Group”) for the 12 months ended 31 December 2010 (“the year”). The Group’s revenue for the year increased significantly by 25.2%, as compared to 2009 to RMB 1.25 billion, which was yet another record high since its listing in Hong Kong. Profit attributable to equity holders of the Company amounted to RMB535 million, 39.8% higher than 2009. Basic earnings per share for the year amounted to RMB0.3195 (2009: RMB 0.2285). The Board has recommended the payment of a final dividend for 2010 of HK$0.12 per share. Together with the paid interim dividend of HK$0.10 per share, total dividend for the year will amount to HK$0.22, representing a dividend payout ratio of 58.4%.
Commenting on achieving record-high revenue again since the Company’s listing in Hong Kong, Mr. Zhang Zhaoxing, Chairman of GZI Transport said, “Riding on China’s stable economic development, most of the Group’s toll roads and bridge projects achieved satisfactory growth during the reporting year, contributing to 25.2% growth in total revenue for the year, which surpassed last year’s record high for revenue since the Company’s listing in Hong Kong. During the year, owing to strong toll revenue growth, the Guangzhou Northern Second Ring Expressway (“GNSR Expressway”) remained the Group’s highest revenue contributor, with double-digit growth in revenue. In addition, new revenue was seen from projects acquired in 2009, namely the Cangyu Expressway and Jinbao Expressway.”
During the year, GZI Transport accomplished its total assets investment target of RMB4 billion, marking a significant milestone in growing its asset base. It successfully acquired 90% equity interests in both Hubei Han-Xiao Expressway and Hunan Changzhu Expressway (the latter project pending approval). The total amount of total assets investment in Hunan Changzhu Expressway alone was RMB3.12 billion, which was the largest acquired project by the Company since listing.
Mr. Zhang said, “During the year, GZI Transport focused on boosting its investment in quality expressways which are expected to deliver better returns over the long term, and strategically withdrew from Class I Highways in Guangzhou. The two projects we acquired, the Hubei Han-Xiao Expressway and the Hunan Changzhu Expressway (the latter project pending approval), both situated in the central region of China, which has enormous economic development potential, enjoyed excellent benefits from these prime locations. The acquisition of these two projects was in line with the Group’s regional expansion strategy. At the same time, we managed to exit from the less profitable Class I Highways. At present, all projects in which we have controlling interests are expressways and this contributes to the optimization of our overall assets structure.”
Mr. Zhang continued, “The Group will continue to capitalise on its strong capital resources. Apart from boosting its investment in quality expressways, the Group will also actively consider investing in other infrastructure projects with longer concessionary periods, seek to optimize our asset portfolio, and strengthen the sustainability of our development.”
Looking to the future, given the steady growth trend in the economy, a few favourable conditions such as the promotion and support from the provincial government for the development of the Pearl River Delta, and the fact that China has overtaken the US to become world’s number one in motor consumption, we expect that GNSR Expressway, Xian Expressway, Jinbao Expressway, Humen Bridge, Northern Ring Road and Shantou Bay Bridge will remain reliable sources of income and profits for the Group. In addition, the GWSR Expressway, together with the Qinglian Expressway, where the expressway upgrade works of the Liannan section were completed in the beginning of 2011, are expected to become other important profit drivers for the Group.
Mr. Zhang concluded, “Looking ahead, in order to accelerate the pace of development and asset growth, we will look to explore and develop new investment projects which offer satisfactory returns and prospects in certain target areas, especially the relatively developed regions, such as the highly developed Pearl River Delta and eastern coastal areas; the Western provinces which are benefiting from the development of the ASEAN Free Trade Area and opportunities brought about by the industrial transformation of the Pearl River Delta; and the central region which is benefiting from the Wuhan-Guangzhou High Speed Railway. At the same time, we will improve and standardise operating processes and internal procedures so as to raise operating efficiency and achieve better results for the Group, hence generating the highest possible return for shareholders.”