Toll Income up 27.4% to approximately RMB1,255 million with RMB0.12 of Final Dividend
Shows a Prominent Sustainable Development
Chengdu Expressway Co., Ltd. (“Chengdu Expressway” or the “Company”, together with its subsidiaries, the “Group”, stock code: 1785), a leading expressway operator in Sichuan Province, announced its audited annual results for the year ended 31 December 2019(“the Reporting Period”).
During the Reporting Period, the Group achieved toll income of RMB1,255,926,000, up by 27.4%, the Group achieved profit for the year of RMB471,102,000, representing a year-on-year increase of 5.6%, total comprehensive income for the year attributable to owners of the Company of RMB438,791,000, representing a year-on-year increase of 5.6% and basic earnings per share of approximately RMB0.268. The Company was committed to enhancing its corporate value and giving a due consideration to both the development of the Company and the interests of investors to implement the dividend distribution policy. The board of directors of the Company proposed to distribute a final cash dividend for 2019 of RMB0.12 per Share (tax inclusive) and RMB198,732,240 in total.
Principal Business Trending Stable and Upward
During the Reporting Period, Chengguan Expressway, Chengpeng Expressway, Chengwenqiong Expressway and Chengdu Airport Expressway recorded daily weighted- average traffic volume of 40,564, 51,342, 57,768 and 44,396, representing a year-on-year change of -4.6%, 81.3%, 8.2% and 1.5% from 2018, respectively; and toll income of RMB307,940,000, RMB238,312,000, RMB433,933,000 and RMB142,570,000. In particular, Chengguan Expressway, Chengpeng Expressway, Chengwenqiong Expressway and Chengdu Airport Expressway registered a year-on-year change of -6.8%,110.6%,9.0% and -1.1% in toll income, respectively.
The traffic volume and toll income of Chengpeng Expressway maintained relatively substantial increase with remarkable results achieved, primarily due to the reason that it benefited from the expansion and renovation and the full restoration of traffic flows since 12 July 2018. Benefiting from the completion of Riyue Avenue, which connects downtown Chengdu to the entrance of Chengwenqiong Expressway, Chengwenqiong Expressway attracted more vehicles and therefore witnessed an increase in toll volume and toll income. Chengdu Airport Expressway recorded a slight decrease in revenue due to more ETC discounts afforded as compared to 2018. Chengguan Expressway recorded a decrease in toll volume and toll income from 2018, primarily due to traffic diversion as a result of operation of Yongning and Shuyuan toll gates on Chengdu Ring Expressway and the reopening of Chengpeng Expressway since 12 July 2018. In addition, the debris flow disaster in Wenchuan County, Aba Prefecture, Sichuan Province on 20 August 2019 and the environmental rectification with special treatment conducted in Aba Prefecture, Sichuan Province during the Reporting Period exerted negative impact on the traffic volume of Chengguan Expressway to a certain extent.
Qiongming Expressway was acquired by the Group from Chengdu Expressway Construction in 2019, which constituted business combination under common control. Chengdu Expressway Construction completed acquisition of equity interests in Chengming Expressway Company on 7 May 2019 and therefore, the results of Qiongming Expressway from May to December 2019 were consolidated into the financial statements of the Group for the year. From May to December 2019, toll income of Qiongming Expressway reached RMB133,171,000 and if calculated based on the whole year of 2019, Qiongming Expressway realised daily weighted-average traffic volume of 13,718, representing an increase of 10.3% from the corresponding period of 2018 and toll income of RMB189,953,000 (2018: RMB169,478,000), representing an increase of RMB20,475,000, or 12.1% from 2018. The increase in toll income of Qiongming Expressway was attributable to the fact that it had grown into the mature period to generate profitability.
Proactively Implementing Policies to Facilitate Traffic Flow
During the Reporting Period, responding to the national policies, the Group actively implemented ETC software and hardware technical transformation to facilitate traffic flow. In line with the “Notice on Issuing the Implementation Plan for Deepening the Reform of Toll Road System and Cancelling the Provincial Toll Stations of Expressways issued by the General Office of the State Council, the Group implemented the standardised construction and renovation of hardware and software for the ETC portal system of three of our expressways, being Chengguan Expressway, Chengpeng Expressway and Chengwenqiong Expressway (Chengdu Airport Expressway does not need hardware renovation for the ETC portal system and only requires upgrading of toll collection software to meet the standards). As of December 2019, construction for 46 ETC portal systems was completed. In addition, cooperating with banks and WeChat operators, the Group developed the “Sichuan Expressway Connect” mini program, which was officially launched in June 2019 to provide online ETC services 24 hours a day. The Group also proactively improved traffic convenience and work efficiency through setting up unattended card issuing machines and mobile code scanning payments on its own expressways.
Expanding Principal Business through Acquisition of Equity Interests in Chengming Expressway Company
During the Reporting Period, the Company entered into the equity transfer agreement with Chengdu Expressway Construction on 28 October 2019 to acquire the 51% equity interests in Chengming Expressway Company and the relevant change in industrial and commercial registration was completed on 20 December 2019. The acquisition scaled up the assets of the Group and expanded the market share of principal business in Sichuan Province, which will facilitate the strengthening of the core advantages of the Company in the investment and management of toll highways and roads. Upon completion of the acquisition, the total mileage of the expressways operated by the Company has been extended to approximately 202.37 kilometres from approximately 149.69 kilometres.
Outlook in 2020
The sixth meeting of the Central Financial and Economic Affairs Commission was held on 3 January 2020, which focused on the Chengdu-Chongqing economic circle and put forward the initiative “to promote the construction of a two-city economic circle in Chengdu- Chongqing region and forge an important growth driver for high-quality development in the west”. The Company expects that the favorable macro policies will provide strong support for the sustainable development of Chengdu and its surrounding areas, and will also affect transportation, warehousing, logistics, tourism and other industries, thus bringing development opportunities to the Group.
Xiao Jun, the Chairman of Chengdu Expressway Co., Ltd., said: “In 2020, the Company will continue to strengthen the investment, construction, management and maintenance of expressways to consolidate its core competitiveness. First, the Company plans to set up specialized operating companies to implement unified management and maintenance of its own expressways and reduce operation and management costs. Second, the Company proposes to make effective use of investment attraction policies in the areas along the expressways, and to invest in the construction of a theme service area near Ande Toll Station of Chengguan Expressway according to the “Expressway +” industrial concept, so as to foster new profit and growth potential while improving the traffic experience and service level of Chengguan Expressway.”
About Chengdu Expressway Co., Ltd.
Chengdu Expressway Co., Ltd. (hereinafter referred to as the “Company”) is mainly engaged in the operation, management and development concerning expressways. The six expressways under its current operation and investment include Chengguan Expressway, Chengwenqiong Expressway, Chengpeng Expressway, Chengdu Airport Expressway, Qiongming Expressway and Chengbei Exit Expressway, with a total length of 202.37 kilometers. They are all situated at strategic locations around Chengdu and connect areas with rich economic, cultural and tourism resources. They are indispensable parts of the expressway network surrounding Chengdu, the capital of Sichuan Province. For further details regarding Chengdu Expressway Co., Ltd., please visit its website at https://www.chengdugs.com/ .