Post on 22-Jan-2018
B.
Stock Codes: 737 (HKD counter) & 80737 (RMB counter)
December 2017
Presentation slides are available on www.hopewellhighway.com
HOPEWELL HIGHWAY INFRASTRUCTURE LIMITED
B.
HHI Overview
2
Listed on Stock Exchange of Hong Kong on 6 Aug 2003
Market capitalization: around HK$14.4 billion (US$1.8 billion) as of 30 November 2017
B. 3
FY2016/17 Final Results ♦ Financial & Operational Highlights
B. 4
Key Messages
Net profit up 22% yoy to RMB623m, as core operations grew and net exchange loss narrowed
Profit before net exchange loss up 8% yoy to RMB649m
Total dividend per share RMB30.2 cents (final DPS: RMB11.6 cents, special final DPS: RMB10.0 cents; interim DPS: RMB8.6 cents)
GS’ growth momentum is persistent
− Average daily FLE traffic reached historical high
− Average daily toll revenue set a new high after tariff cut in Jun 2012
WDR net profit up 169% yoy to RMB107m (HHI’s share)
FY2017
B. 5
Key Messages
Net exchange loss on RMB depreciation narrowed to RMB17m (HHI’s share) (FY16: RMB82m)
Disclose WDR as a whole starting from FY17 annual results
‒ Simplify disclosure to reflect full operation (WDR fully opened in Jan 2013 and turned profitable since FY16)
WDR utilised surplus cash to fully prepay RMB807m (JV level) of bank loan principal due in 2017 and 2018 as at 30 Jun 2017
Strong financial position. HHI corporate level net cash RMB469m or RMB0.15/share (30.6.2017)
FY2017
B.
B. 6
Key Messages
FY18 results will be affected by one-off impact from GS’ profit sharing ratio adjusted from 48% to 45% starting 1 Jul 2017 ‒ Yet will be supported by (i) GS’ and WDR’s healthy growth; (ii) fall in
WDR’s interest expenses
100% dividend payout target (full-year basis) sustainable − HHI corporate level net cash RMB469m (30.6.17) − Expect ~RMB600m dividend from GS in FY18 (similar to HHI’s
proposed annual regular dividend to shareholders in FY17) − WDR targets to distribute dividend to HHI starting 2020 the earliest
WDR FY18 finance cost will drop mainly due to (i) 10% discount on individual bank loans’ borrowing rates; (ii) bank loans’ prepayment
The soon-to-open HK-Zhuhai-Macao Bridge will benefit WDR
Guangdong-HK-Macao Bay Area’s development will benefit GS & WDR
Upcoming: FY2018 & Beyond
B.
B.
Results Highlights
7
2016 2017RMB'm RMB'm
Net toll revenue 2,002 2,159 +8% ••
GS ↑6% to RMB1,560mWDR ↑15% to RMB599m
EBITDA of toll expressways 1,705 1,859 +9% • Healthy core operation
Net profit of toll expressways 611 666 +9%
•
•
GS' net profit ↓2% to RMB559m mainlydue to ↑finance cost from RMB2b bankloan drawn in Aug-16WDR net profit ↑169% to RMB107m(FY16: RMB40m)
Corporate results (8) (17) n/a
• ↓Net interest income: -↓ interest income due to shareholder's loan to WDR repaid by Oct-15 - offset↓ finance cost after full repayment of all corp. bank loans
Profit before net exchange loss 603 649 +8%
Net exchange loss (82) (17) n/a
Profit attributable to owners of theCompany 511 623 +22% • Core operation grew and ↓net exchange
loss
For the year ended 30-Jun %change Major reasons for change
B. 8
HHI’s Results For the year ended 30-Jun
(RMB’M) 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017
GS SuperhighwayN1 1,480 1,560 1,262 1,343 (414) (460) (277) (324) 571 559
Western Delta Route 522 599 443 516 (181) (211) (222) (198) 40 107
Sub-total 2,002 2,159 1,705 1,859 (595) (671) (499) (522) 611 666+8% +9% +13% +5% +9%
Corporate results: Bank deposits interest income 27 24 Shareholder's loan interest income 9 - Other income 1 - General and administrative expenses (40) (41) Finance costs (4) - Income tax expense (1) -
Sub-total (8) (17)
Profit before net exchange loss 603 649 +8%
Net exchange loss (82) (17)
Profit for the year 521 632
Minority interests (10) (9)
Profit attributable to owners of the Company 511 623 +22%
Net TollRevenue EBITDA ResultsInterest & TaxDepreciation &
Amortisation
N1: Excl. exchange differences from USD & HKD loans and related income tax
B. 9
Financial Highlights
Declared dividend in RMB, with the option to receive dividends in RMB or HKD or combination of RMB and HKD
N1: Based on PBOC exchange rate RMB1 = HK$1.11560 (4 Jan 2017) N2: Based on PBOC exchange rate RMB1 = HK$1.17154 (16 Aug 2017)
EPS RMB cents 16.59 20.21 +22%
RMB cents 8.40 8.60HKD cents 9.9737 9.59416RMB cents 8.20 11.60HKD cents 9.5484 13.58986RMB cents 40.00 10.00HKD cents 46.5776 11.71540RMB cents 56.60 30.20HKD cents 66.0997 34.89942
% change2016 2017
DPS - Interim
For the year ended 30-Jun
DPS - Final
DPS - Special Final
DPS - Total
N1
N2
N2
B.
Target of 100% dividend payout ratio on full-year basis is sustainable, in light of HHI’s strong financial position
HHI’s Sustainable Dividend
N1: Payout ratio excluded special dividend 10
HHI Dividend (RMB cent per share)
FY13 FY14 FY15 FY16 FY17
Regular DividendPayout Ratio 97% 100% 100% 100% 100%
10.0 9.8 8.4 8.4 8.6
9.0 8.1 8.4 8.2 11.6
10.0 18.0
40.0
10.0 0
10
20
30
40
50 Special Final DividendFinal DividendInterim Dividend
RMB19.0 RMB17.9Regular: RMB16.8 RMB16.6 RMB20.2
N1 N1N1 N1
B. 11
Cash and Debt: HHI Corporate Level vs Share of JV
N1: Total debt less bank balances and cash
HHI Corporate Level (RMB'm)As at 30.6.2016 30.6.2017 As at 30.6.2016 30.6.2017Bank balances and cash Corporate debt• Bank balances and cash 652 469 • Bank loan - -
Share of JV Companies (RMB'm)As at 30.6.2016 30.6.2017 As at 30.6.2016 30.6.2017Bank balances and cash Bank loans • Bank balances and cash 262 440 • GS Superhighway 1,403 2,280
• Western Delta Route 4,028 3,718
262 440 5,431 5,998
Net cash: RMB469m (30-Jun-16: RMB652m)
Net debt : RMB5,558m (30-Jun-16: RMB5,169m)N1
Solid financial position at HHI corporate level Project loans: non-recourse to HHI
B. 12
Impact from RMB Exchange Rate and US Interest Rate Changes
21%
2%
77%
RMB loans:
USD loans:
Possible exchange gain/(loss),
subject to RMB appreciation/
(depreciation)
Breakdown of HHI’s Share of JV LoansN1 by Currency (As at 30 Jun 2017)
RMB1,240m
RMB1,380m
RMB4,627m
N1: Represent HHI’s share of JVs’ bank loans of RMB5,998m and other borrowings of RMB9m
For every 1% Impact on HHI’s net profit
RMB depreciation ↓ ~RMB9m
US interest rate rise ↓ ~RMB9m
HKD loans: RMB140m
B.
GS Superhighway – Growth is Persistent
Average daily toll: Up 6% yoy to RMB9.2m in FY17, set a new high after tariff cut in Jun 2012
13
Mar Apr May Jun Jul Aug Nov Dec(LabourHoliday)
1HCY
2HCY
2014 8,657 8,276 7,868 8,438 8,857 9,046 8,903 8,933 8,384 -5% -6%2015 8,867 8,505 8,025 8,775 9,017 9,057 9,153 9,202 8,567 +2% +2%2016 9,303 8,374 8,584 9,002 9,266 9,204 9,779 9,831 8,875 +3% +4%2017 9,899 8,708 9,479 9,726 9,896 +7%
2016 vs 2015 yoy +5% -2% +7% +3% +3% +2% +7% +7% +4%2017 vs 2016 yoy +6% +4% +10% +8% +7%
CYyearlyavg.
7,921 8,634
yoy changeJan + Feb Sep + Oct(Lunar New Year) (National Holiday)
+6%+4%
7,770
+2%
7,774 8,3008,017
8,402
6,500
7,500
8,500
9,500 2017
2016
2015
2014
(Ching MingFestival)
10,000
7,500
GS Average Daily Toll Revenue
(RMB ’000)
N1: Apr: One more day toll-free Labour holiday in 2017 vs 2016 May: One less day toll-free Labour holiday in 2017 vs 2016
N1
N1
B. 14
Western Delta Route (“WDR”)
1,032
886786
722
546
300
400
500
600
700
800
900
1,000
1,100
FY13 FY14 FY15 FY16 FY17
WDR – EBITDA (JV Level) (RMB’m)
Finance cost further lowered in FY18 due to: 10% discount on individual bank
loans’ borrowing rates Bank loans’ prepayment
Achieving healthy growth since opening Will continue to benefit from prosperous economic and road network
developments including the soon-to-open HZM Bridge
Target to distribute dividend to HHI starting 2020 the earliest
B. 15
Average Daily Toll* and FLE Traffic
GS + WDR Aggregate Avg Daily Toll (RMB ’000)
* Including tax
8,682 9,169
2,941 3,377
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
FY16 FY17
11,622
WDR
GS
8%
GS: Avg Daily FLE Traffic (no. of vehicles ’000)
92 99
0
20
40
60
80
100
FY16 FY17
WDR: Avg Daily FLE Traffic (no. of vehicles ’000)
40 47
0
20
40
60
80
100
FY16 FY17
8%
17%
WDR
GS
12,546
B. 16
69.6% 70.1%
30.4% 29.9%
0%
20%
40%
60%
80%
100%
GS WDR
Passenger Vehicles: Major Contributor to Toll Revenue and Traffic
83.0% 81.8%
17.0% 18.2%
0%
20%
40%
60%
80%
100%
GS WDR
FY17 Toll Revenue Mix
FY17 FLE Traffic Mix
Trucks
Passenger Vehicles
B.
60
70
80
90
100
110
120
JanFebMarAprMayJun Jul AugSep OctNovDec
2017
2016
2015
2014
2013
17
GS Superhighway
6,000
7,000
8,000
9,000
10,000
11,000
Jan Feb Mar AprMayJun Jul AugSep Oct NovDec
2017
2016
2015
2014
2013
FY16 FY17 yoy Avg. Daily FLE Traffic 92k 99k ↑8%
FY16 FY17 yoy Avg. Daily Toll (RMB) 8,682k 9,169k ↑6%
GS – Average Daily FLE Traffic# (No. of vehicles ’000)
GS – Average Daily Toll Revenue^ (RMB ’000)
N1 N1 N1 N1
N3
N4
* According to media # Excludes toll-free FLE traffic ^ Including tax N1: Holiday Toll-free Policy was implemented N2: Chinese New Year started on 28 Jan in year 2017 and 8 Feb in year 2016 N3: i) Impact of lower traffic (usually during the 1st two weeks of CNY) carried over into Mar-15.Since CNY came later in 2015 compared with 2016, which resulted in a lower base ii) Closure of slow lanes on Chuancha Bridge near Machong for maintenance (Northbound 16 Mar 2016 to end-May 2016; Southbound 22 Mar 2016 to mid-May 2016) N4: One more day of toll-free holiday in Apr 2017 compared to Apr 2016 N5: One less day of toll-free holiday in May 2017 compared to May 2016 N6: Aug 2016 growth was affected by bad weather caused by Typhoon Nida during 2-3 Aug 2016 N7: One more day of toll-free holiday in Oct 2017 compared to Oct 2016, i.e. National Day holiday from 1-8 Oct in 2017 (1-7 Oct in 2016).
N5
N6
N1 N1 N1 N1
N2
N3
N4
N5
N6
N2
N2
N2
Minimal positive impact from road network upgrade works near Shenzhen Bay border (mid-Oct 2016 to mid-Oct 2017)
NH107 Baoan section has planned to start upgrading works in 2018 (date to be announced)*
N7 N7
B. 18
GS Superhighway – Still Room to Grow
Average daily FLE traffic ↑8% yoy to 99k vehicles in FY17
Still 22% room to grow vs. historical peak at 121k vehicles
on 14 Sep 2016
Total distance travelled by all vehicles on the expressway Full length of the expressway X no. of days in the review period * =
121
9992
0
20
40
60
80
100
120
140
FY16 FY17 14.9.2016
GS – Average Daily FLE Traffic* (No. of vehicles ’000)
▲8% yoy
(Historical peak)
22%
B. 19
Western Delta Route Positive impacts from:
‒ Maintenance/Upgrading works on local roads nearby (mid-Aug 2016 to end-2019) ‒ Expressway link between WDR’s southern end and Second Hengqin Bridge opened in 1Q CY17
15
20
25
30
35
40
45
50
55
60
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2017
2016
2015
2014
2013
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2017
2016
2015
2014
2013
WDR – Average Daily FLE Traffic# (No. of vehicles ’000)
WDR – Average Daily Toll Revenue^
(RMB ’000)
N1
N4
N3
N1 N1 N1 N1 N1 N1 N1
# Excludes toll-free FLE traffic ^ Including tax N1: Holiday Toll-free Policy was implemented N2: Chinese New Year started on 28 Jan in year 2017 and 8 Feb in year 2016 N3: Impact of lower traffic (usually during the 1st two weeks of CNY) carried over into Mar 2015. Since CNY came later in 2015 compared with 2016, which resulted in a lower base N4: One more day of toll-free holiday in Apr 2017 compared to Apr 2016 N5: One less day of toll-free holiday in May 2017 compared to May 2016 N6: Aug 2016 growth was affected by bad weather caused by Typhoon Nida during 2-3 Aug 2016 N7: Small positive impact from maintenance works on a local road near the Bijiang interchange of WDR during Sep to Dec 2016 N8: One more day of toll-free holiday in Oct 2017 compared to Oct 2016, i.e. National Day holiday from 1-8 Oct in 2017 (1-7 Oct in 2016)
N5 N6 N7
FY16 FY17 yoy Avg. Daily FLE Traffic 40k 47k ↑17%
FY16 FY17 yoy Avg. Daily Toll (RMB) 2,941k 3,377k ↑15%
N2 N4
N3
N5
N6 N7
N2 N2 N2
N8 N8
B.
Guangdong-HK-Macao Bay Area* - GS and WDR will benefit from fostered economic development
* Includes HKSAR, Macao SAR, Guangzhou, Shenzhen, Zhuhai, Dongguan, Huizhou, Zhongshan, Foshan, Zhaoqing & Jiangmen
20
First addressed in the 13th Five-Year Plan (2016-2020)
Strengthen infrastructure linkages and stimulate economic cooperation in the region
Guangdong-Hong Kong-Macao Bay Area GDP in eleven cit ies in 2016 (RMB in billion)
208.4 1,961.1
863.0
241.9
320.3
682.8 341.2
1,949.3
222.6
300.1
2,109.3
Source: PRC State Council, Statistics Bureau of Guangdong Province, HKSAR Census and Statistics Department, Government of Macao SAR Statistics and Census Service
B. 21
Hengqin’s Developments Benefit WDR
Total committed investments of over RMB340b as of Jun 2017*
* According to media Source: www.hengqin.gov.cn, media reports
CY 2014 2015 2016 2017 2018 2019 2020Projects
Chimelong International OceanTourist Resort Phase 1Chimelong International OceanTourist Resort Phase 2Phase I of Lai Sun Group'sNovotown
Ferretti Yacht Asia-Pacific Center
Guangdong-Macao CooperationIndustrial Park
InfrastructureMacao Cotai-Hengqin BorderCrossing 24-hour opening
Hengqin Second Bridge
Opened Mar 2014
Target opening 2020*
Target opening end-2018*
Target opening 2018*
Target completion 2018 onwards*
Since Dec 2014
Opened Dec 2015
B. 22
Future Developments to Benefit WDR
The soon-to-open HZM Bridge will benefit WDR
Healthy GDP growth of Guangzhou, Foshan, Zhongshan and Zhuhai (1H2017: ↑ 7.4%–9.2%)
Macao’s new gaming resorts and hotels MGM Cotai (opening 4Q2017); Grand Lisboa Palace (opening 2H2018)
WDR will also link up with:
* According to media
Target opening*
Guangzhou-Zhongshan-Jiangmen Expressway 2019
Humen Second Bridge 2019
Shenzhen-Zhongshan Corridor 2024
B. 23
WDR’s Connectivity with HZM Bridge and Hengqin
* According to media
B. 24
FY2016/17 Final Results ♦ Appendix
B. 25
(RMB'M) 30-Jun-16 30-Jun-17 30-Jun-16 30-Jun-17Assets LiabilitiesHHI Corporate Level HHI Corporate Level Bank balances and cash 652 469 Other liabilities 7 11
Other assets 6 7
658 476 7 11 NAV of HHI Corporate 651 465
GS Superhighway JV (HHI's shared portion) GS Superhighway JV (HHI's shared portion) Bank balances and cash 212 379 Bank loans
Concession intangible assets 5,239 4,870 - USD 1,248 1,240 Property and equipment 212 208 - HKD 155 140
Other assets 43 27 - RMB - 900 Other liabilities 665 647
5,706 5,484 2,068 2,927 NAV of GS Superhighway JV 3,638 2,557
West Route JV (HHI's shared portion) West Route JV (HHI's shared portion) Bank balances and cash 50 61 RMB bank loans 4,028 3,718
Concession intangible assets 6,392 6,231 Other liabilities 253 274 Property and equipment 253 225
Other assets 16 10 6,711 6,527 4,281 3,992
NAV of West Route JV 2,430 2,535
Total Liabilities 6,356 6,930 Equity attributable to owners of the Company 6,673 5,526 Minority interests 46 31
Total AssetsN1 13,075 12,487 Total Equity and Liabilities 13,075 12,487
Total NAV 6,719 5,557
Assets and Liabilities – HHI Corporate and JVs
N1: Excluding elimination of the Group’s balance with JV company prepared under proportionate consolidation method.
B. 26
Debt Maturity Profile
Share of JV
RMB'm % RMB'm %
Repayable within 1 year 65 1% 172 3%
Repayable between 1 and 5 years 1,521 28% 2,316 38%
Repayable beyond 5 years 3,853 71% 3,519 59%
Total 5,439 100% 6,007 100%
30 Jun 2016 30 Jun 2017 N
B. 27
Update on Operating Environment
VAT payable effective rate: 2.86% (vs business tax rate: 3%)
Slightly positive impact on net toll revenue and net profit in FY17
Change of Business Tax to Value-added Tax (effective 1 May 2016)
Trucks using Guangdong Unitoll Card for toll payments on designated 43 state-owned expressways in Guangdong would be discounted 15% starting on 1 Jul 2017 (not applicable to GS and WDR)
Trucks’ Discount on Guangdong’s Designated State-owned Expressways
B. 28
Exchange Rate Movement
Source: PBOC
USD/RMB Exchange Rate (USD/RMB)
HKD/RMB Exchange Rate (HKD/RMB)
0.121
0.124 0.125
0.128
0.131
0.137
0.146
0.146 0.146
0.146
0.147
0.151
0.155
0.159
0.158
0.159 0.162
0.164
0.163
0.163 0.164
0.154
0.151
0.144 0.148
0.149
0.110
0.115
0.120
0.125
0.130
0.135
0.140
0.145
0.150
0.155
0.160
0.165
0.170
20 J
ul 0
530
Dec
05
30 J
un 0
629
Dec
06
29 J
un 0
728
Dec
07
30 J
un 0
831
Dec
08
30 J
un 0
931
Dec
09
30 J
un 1
031
Dec
10
30 J
un 1
130
Dec
11
29 J
un 1
231
Dec
12
28 J
un 1
331
Dec
13
30 J
un 1
431
Dec
14
30 J
un 1
531
Dec
15
30 J
un 1
630
Dec
16
30 J
un 1
74
Aug
17
0.940
0.961 0.971
0.995
1.026
1.068
1.137 1.134
1.134 1.136
1.146
1.175
1.202
1.234
1.227
1.233 1.255
1.272
1.260
1.268 1.268
1.194
1.170
1.118
1.152
1.165
0.85
0.90
0.95
1.00
1.05
1.10
1.15
1.20
1.25
1.30
20 J
ul 0
530
Dec
05
30 J
un 0
629
Dec
06
29 J
un 0
728
Dec
07
30 J
un 0
831
Dec
08
30 J
un 0
931
Dec
09
30 J
un 1
031
Dec
10
30 J
un 1
130
Dec
11
29 J
un 1
231
Dec
12
28 J
un 1
331
Dec
13
30 J
un 1
431
Dec
14
30 J
un 1
531
Dec
15
30 J
un 1
630
Dec
16
30 J
un 1
74
Aug
17
2% RMB appreciation on 21 Jul 2005
(HKD0.9400/RMB1)
2% RMB appreciation on 21 Jul 2005
(USD0.1233/RMB1)
PBOC devaluated RMB in Aug 2015
PBOC devaluated RMB in Aug 2015
B.
5,000
10,000
15,000
20,000
25,000
30,000
Cross HarbourTunnel
Eastern HarbourCrossing
Western HarbourCrossing
GS SuperhighwayPeak Section
(Huocun to Luogang)
GS SuperhighwayAverage
No. of vehicle per lane per day
29
GS Superhighway – Avg Daily Cross Sectional Traffic per lane & Effective Hour
GS’ busiest section higher than Eastern Harbour Crossing
GS and HK Tunnels Effective hours (Jun-17)
Cross Harbour Tunnel 14.2 Eastern Harbour Crossing 9.5 Western Harbour Crossing 5.4 GS Peak Section 10.7 GS Average 8.7
GS’ busiest section higher than Eastern Harbour Crossing
Remarks: 1) Effective hour = no. of vehicles per lane / 2,000 cars per hour per lane 2) 10 lanes in dual directions in Wudianmei to Taiping and Hezhou to Fuyong sections after expansion for the GS Superhighway 3) Average daily traffic of HK tunnels (May 2017): Cross Harbour Tunnel 113,000, Eastern Harbour Crossing 76,000, Western Harbour Crossing 65,000 4) Average daily traffic of GS Superhighway (June 2017)
B. 30
GS Superhighway – Measures to Control Operating Costs and Enhance Operational Efficiency
Streamline workforce
Automation ~76% toll lanes at entrance have Electronic Toll Collection (“ETC”)
or automatic card-issuing machines
B. 31
GS Superhighway – FLE Traffic and Toll Revenue by Vehicle Type
Average Daily FLE Traffic
83.1% 83.0%
16.9% 17.0%
0%
20%
40%
60%
80%
100%
FY16 FY17
(17k vehicles +8%)
(82k vehicles +8%)
Average Daily Toll Revenue
69.1% 69.6%
30.9% 30.4%
0%
20%
40%
60%
80%
100%
FY16 FY17
(RMB6,379k +6%)
(RMB2,790k +4%)
Trucks
Passenger Vehicles
(16k vehicles)
(76k vehicles)
(RMB5,997k)
(RMB2,685k)
B. 32
Western Delta Route – Annual Toll Revenue per km
Opening Yr Year1
Year2
Year3
Year4
Year5
Year6
Year7
Year8
Year9
Year10
Year11
Year12
Year13
Year14
Year15
Year16
Year17
Year18
Year19
Year20
Year21
Year22
Year23
GS (FY95) 4.4 5.8 7.5 9.8 10.8 13.1 14.4 15.4 17.2 20.6 24.2 26.2 29.8 26.0 26.6 28.5 30.1 29.5 25.7 25.8 25.2 25.9 27.3
WDR (FY13) 7.0 9.3 10.1 11.0 12.6
0.0
5.0
10.0
15.0
20.0
25.0
RMB'm
GS Superhighway (trial run Jul-94, opened Jul-97)
35.0
Annual Toll Revenue^ per km (RMB’m)
Encouraging revenue generation since opening
⌇
^ Including tax
WDR (fully opened Jan-13)
B. 33
Western Delta Route – FLE Traffic and Toll Revenue by Vehicle Type
Average Daily FLE Traffic
82.5% 81.8%
17.5% 18.2%
0%
20%
40%
60%
80%
100%
FY16 FY17
(9k vehicles +21%)
(38k vehicles +16%)
(7k vehicles)
(33k vehicles)
Average Daily Toll Revenue
70.0% 70.1%
30.0% 29.9%
0%
20%
40%
60%
80%
100%
FY16 FY17
(RMB2,060k)
(RMB881k)
(RMB2,366k +15%)
(RMB1,011k +15%)
Trucks
Passenger Vehicles
B.
The Complete Network
GS 1994
WDR Fully opened
2013
Phase IV West (Gov’t Project)
2008
HK-Zhuhai-Macao Bridge
(Gov’t Project)
Zhuhai Link Road (Gov’t Project)
Sep 2016
Other Expressways (In Operation)
Other Expressways (Under Construction or Planning)
Main Roads / Class 1 Highways (In Operation)
Main Roads / Class 1 Highways (Under Construction or Planning)
Kowloon-Canton Railway
Guangzhou-Shenzhen-HK Express Rail Link
Guangzhou-Zhuhai Intercity Railway
Coastal Expressway
Legend:
B. 34
B. 35
HHI’s Toll Structure^
Passengervehicles Trucks
Class Number ofseats
Loading weight(tonnes)
1 ≤7 ≤2 0.60
2 8-19 2-5 (include 5) 0.90
3 20-39 5-10 (include 10) 1.20
4 ≥4010-15 (include 15)
and20ft. container
1.80
5 - >15 and 40ft.container 2.10
Tariffrate*
(RMB perkm)
National classification
^ Effective since 26 Jun 2015 * Tariff rate under the national classification standard for trucks will be used only when the weighing equipment is out of order
Passenger Vehicles Charge based on no. of seats
Trucks Charge based on total weight of truck
(tonne) Basic tariff rate: RMB0.12/tonne/km (≥ 3x3
expressway) Penalty on overloaded trucks
B. 36
Growth in PRC & Guangdong Registered Car Population
* Incl. passenger & commercial vehicles but excl. motorcycles & truckers
Driven mainly by passenger car sales
Source: Statistics Bureau of Guangdong (www.gdstats.gov.cn), National Bureau of Statistics of China (www.stats.gov.cn), China Association of Automobile Manufacturers (www.caam.org.cn), CEIC
7894
163
186
146
27 32 37 4451
63
127109
24
0
20
40
60
80
100
120
140
160
180
200
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2.6 3.13.8 4.3
5.15.8
6.67.8
9.110.4
11.813.3
14.7
16.8
0
2
4
6
8
10
12
14
16
18
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Guangdong’s Registered Car Population* (No. of vehicles in million)
PRC’s Registered Car Population* (No. of vehicles in million)
14% 14%
B. 37
China Sold ~28m Vehicles in 2016
22 23 25
13
0
5
10
15
20
25
30
2013 2014 2015 2016 1H 2017
Vehicle Sales in China
(No. of vehicles in million)
14%
Source: China Association of Automobile Manufacturers (中國汽車工業協會)
7%
Calendar Year
5% 14%
28
Purchase tax benefit for small-engine passenger cars was reduced Tax rate increases from 5% (2016) to 7.5% in 2017 and will return to
the pre-tax cut level of 10% in 2018
4%
B. 38
China – World’s Largest Vehicle Sales Market in 2016
8th consecutive year since 2009
* Include passenger and commercial vehicles, but exclude motorcycles Source: China Association of Automobile Manufacturers (中國汽車工業協會), International Organisation of Motor Vehicle Manufacturers (OICA) www.oica.net, Bureau of Economic Analysis (U.S. Department of Commerce) wwww.bea.gov
28
18
25
17
5.0 3.5 3.4 3.1 2.6 2.3 1.9 1.8 1.6 0
5
10
15
20
25
30
China U.S.A. China U.S.A. Japan Germany India U.K. Brazil France Canada SouthKorea
China
1st 2nd 1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th
2016 2015 1994
Motor Vehicle* Sales (Top 10 Countries) (No. of vehicles in million)
14% yoy
China China
1st Ranking:
China
1st
B. 39
Supplementary Information ♦ Company and Projects
♦ Macro Data
B.
HHI Ownership Structure
40
45% 50%
GS Superhighway JV Western Delta Route JV
Hopewell Holdings Limited (stock code: 54.HK)
Hopewell Highway Infrastructure Limited (stock code: 737.HK / 80737.HK)
66.69%
B. 41
Board of Directors 8 Audit Committee
Remuneration Committee
Executive Directors 4
Sir Gordon Ying Sheung WU KCMG, FICE * (Chairman) Mr. Eddie Ping Chang HO (Vice Chairman) Mr. Thomas Jefferson WU# (Managing Director) Mr. Alan Chi Hung CHAN (Deputy Managing Director)
Independent Non-Executive Directors (50% of the Board of Directors) 4
Professor Chung Kwong POON GBS, JP, PhD, DSc
Mr. Yuk Keung IP Mr. Brian David Man Bun LI JP
Mr. Alexander Lanson LIN
√ Chairman
√ -
Chairman √ √ -
HHI Board of Directors
* Also as Alternate Director to Mr. Eddie Ping Chang HO # Also as Alternate Director to Sir Gordon Ying Sheung WU
B.
Senior Management
42
Sir Gordon Ying Sheung WU KCMG, FICE – Chairman
Aged 81, one of the founders and visionary leader Pioneer in property and infrastructure sector Established solid foundation and set the stage for company’s continued
achievements
Mr. Thomas Jefferson WU – Managing Director
Aged 45, the mastermind for business breakthrough Taking up various management roles since he joined HHL in 1999 Active involvement in strategic planning and organisation performance review Director of the Year Award 2010, Asian Corporate Director Recognition Award
2011, 2012 & 2013 and named the Asia’s Best CEO (Investor Relations) 2012, 2013 & 2014 with his accredited professionalism
Mr. Alan Chi Hung CHAN – Deputy Managing Director
Aged 58, appointed as the Deputy Managing Director of HHI since 2003 Key role in project coordination, project finance, management & administration
of the expressway infrastructure and other projects of the Company in the PRC
B. 43
Toll Collection Periods GS Superhighway Western Delta Route
Route Guangzhou, Dongguan, Shenzhenand Hong Kong Guangzhou – Zhuhai
Length 122.8km 97.9km
Type3 x 3 closed system expressway
(Wudianmei-Taiping, Fuyong-Hezhou:5 x 5 lanes)
3 x 3 closed system expressway
No. of toll plazas 22 16
Design Speed 120km / hour 100km / hour
Official opening 1 Jul 1997(Trial operation: Jul 1994)
Phase I West (30 Apr 2004)Phase II West (25 Jun 2010)Phase III West (25 Jan 2013)
Toll Collection Period 30 yearsfrom 1 Jul 1997 to 30 Jun 2027
Phase I West (30 years, Sep 2003 to 2033)Phase II West (25 years, Jun 2010 to 2035)Phase III West (25 years, Jan 2013 to 2038)
50%: 1 Jul 1997 – 30 Jun 2007
48%: 1 Jul 2007 – 30 Jun 2017
45%: 1 Jul 2017 – 30 Jun 2027
JV Partner Guangdong Provincial Highway Construction Co Ltd
Profit Sharing Ratio 50%
B. 44
GS Superhighway
Guangdan Huocun
Luogang Xintang
Machong
Wangniudun Daojiao Dongguan
Houjie
Taiping Wudianmei Changan
Xinqiao
Shajing
Fuyong Hezhou
Baoan Nantou
Nanping Futian
Huanggang
GS Superhighway
Xinlian
B.
20
30
40
50
60
70
80
90
100
110
120
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
201720162015201420132012201120102009200820072006200520042003200220012000
GS Superhighway – Average Daily FLE Traffic
45
FY16 FY17 change Avg Daily FLE Traffic 92k 99k ↑8%
GS – Average Daily FLE Traffic# (since 2000) (No. of vehicles ‘000)
N1
N2 N2 N2 N2
N4
N5
N6
N7 N8
# Excludes toll-free FLE traffic N1: Tariff cut became effective on 1 Jun 2012 N2: Holiday Toll-free Policy was implemented N3: Chinese New Year started on 28 Jan in year 2017 and 8 Feb in year 2016 N4: i) Impact of lower traffic (usually during the 1st two weeks of CNY) carried over into Mar-15. Since CNY came later in 2015 compared with 2016, which resulted in a lower base
ii) Closure of slow lanes on Chuancha Bridge near Machong for maintenance (Northbound 16 Mar 2016 to end-May 2016; Southbound 22 Mar 2016 to mid-May 2016) N5: Apr 2016 growth was affected by (i) reason in N4ii; (ii) one more day of toll-free holiday in Apr 2016 compared to Apr 2015 N6: One less day of toll-free holiday in May 2016 compared to May 2015 N7: Aug 2016 growth was affected by bad weather caused by Typhoon Nida during 2-3 Aug 2016 N8: Lower base in 2015 due to the 70th anniversary of the victory of the Chinese People’s war of resistance against Japanese aggression holidays on 3-5 Sep 2015 N9: One more day of toll-free holiday in Apr 2017 and one less day of toll-free holiday in May 2017 compared to the corresponding months in 2016, i.e. Ching Ming Festival
from 2-4 Apr in 2017 (2-4 Apr in 2016) and Labour Day holiday from 29 Apr - 1 May in 2017 (30 Apr - 2 May in 2016) N10: One more day of toll-free holiday in Oct 2017 compared to Oct 2016, i.e. National Day holiday from 1-8 Oct in 2017 (1-7 Oct in 2016)
N3
N3 N9
N9
N10
B.
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
201720162015201420132012201120102009200820072006200520042003200220012000199919981997199619951994
GS Superhighway – Average Daily Toll Revenue
46
GS – Average Daily Toll Revenue^ (since Jul 1994)
(RMB ‘000) FY16 FY17 change Avg. Daily Toll (RMB) 8,682k 9,169k ↑6%
N1
N2 N2 N2 N2
N4
N5
N6
N7 N8
^ Including tax N1: Tariff cut became effective on 1 Jun 2012 N2: Holiday Toll-free Policy was implemented N3: Chinese New Year started on 28 Jan in year 2017 and 8 Feb in year 2016 N4: i) Impact of lower traffic (usually during the 1st two weeks of CNY) carried over into Mar-15.Since CNY came later in 2015 compared with 2016, which resulted in a lower base
ii) Closure of slow lanes on Chuancha Bridge near Machong for maintenance (Northbound 16 Mar 2016 to end-May 2016; Southbound 22 Mar 2016 to mid-May 2016) N5: Apr 2016 growth was affected by (i) reason in N4ii; (ii) one more day of toll-free holiday in Apr 2016 compared to Apr 2015 N6: One less day of toll-free holiday in May 2016 compared to May 2015 N7: Aug 2016 growth was affected by bad weather caused by Typhoon Nida during 2-3 Aug 2016 N8: Lower base in 2015 due to the 70th anniversary of the victory of the Chinese People’s war of resistance against Japanese aggression holidays on 3-5 Sep 2015 N9: One more day of toll-free holiday in Apr 2017 and one less day of toll-free holiday in May 2017 compared to the corresponding months in 2016, i.e. Ching Ming Festival
from 2-4 Apr in 2017 (2-4 Apr in 2016) and Labour Day holiday from 29 Apr - 1 May in 2017 (30 Apr - 2 May in 2016) N10: One more day of toll-free holiday in Oct 2017 compared to Oct 2016, i.e. National Day holiday from 1-8 Oct in 2017 (1-7 Oct in 2016)
N3
N3 N9
N9
N10
B. 47
Western Delta Route
Shaxi Zhongshannan
Banfu
Sanxiang
Yuehuan
Shundedong Shunde
Ronggui Nantou
Dongfu
Zhongjiang
Zhongshanxi
Nanya Shizhou
Bijiang Wujiawei
Western Delta Route
B.
Per Capita GDP Surpassed RMB20,700 (US$3,000) – Start to Buy Cars
48 48
71,459
163,688132,894
53,230
289,361
462,047
51,02153,98082,645
115,642139,644
195,464
362,595
11,227
99,157
0
100,000
200,000
300,000
400,000
500,000
Macau
^
Singapore^
Hong Kong^
South K
orea^
Shenzhen*
Guangzh
ou
Zhuhai
Foshan
Zhongshan
Dongguan
Huizhou
PRC
Jiangmen
ZhaoqingIndia^
PRD cities
20,700^
(US$3,000)
2016 Per Capita GDP of PRD Cities vs Other Countries/Cities
(RMB)
Source: Guangdong Statistical Year Book 2016, 廣東省及各市區國民經濟和社會發展統計公報, Hong Kong Census & Statistics Department and Macao Statistics & Census Service, Bloomberg, Department of Statistics Singapore, Statistics Korea, CEIC ^ Based on exchange rate RMB1 = HK$1.11664; RMB1 = MOP1.202119; RMB1=USD0.1451; RMB1=SGD0.2018; RMB1=KRW163.467 * Estimated data for Shenzhen
B.
Car Ownership In Guangdong
49 49
Source: Guangdong Statistical Year Book 2016, 廣東省及各市區國民經濟和社會發展統計公報, Hong Kong Transport Department & Macao Statistics and Census Service, CEIC * Estimated data for PRD, Zhuhai, Shenzhen, Guangzhou
298272 271 267 257
225 216
184 183 179164 152
134 134 133
101 100
0
50
100
150
200
250
300
Zhuhai*
Donggua
n
Foshan
Shenzh
en*
Zhongsh
an
Zhejian
g provin
cePRD*
Macau
Huizhou
Jiangsu
provin
ce
Guangzh
ou*
Guangdo
ng provin
cePRC
Jiangmen
Shanghai
Hong K
ong
Zhaoqing
2016 Vehicle Ownership per 1000 Persons
PRD cities
B. 50 50
Car Population of PRD Cities in 2016
0.750.12
2.30
3.18
2.25 2.02
0.830.50 0.61 0.88
0.41
0
1
2
3
4
5
6
7
8
9
10
PRC
Gua
ngdo
ngpr
ovin
ce
PRD
*
Hon
g K
ong
Mac
au
Gua
ngzh
ou*
Shen
zhen
*
Don
ggua
n
Fosh
an
Zhon
gsha
n
Zhuh
ai*
Jian
gmen
Hui
zhou
Zhao
qing
(vehicles in million)
7.73m vehicles (42% of Guangdong
province)
14.0%
13.8%
2.8%
1.0%
21.7% 14.0%
17.1% 22.5% 17.8% 36.2%
28.5%
185.59
16.76
⌇
190
Source: Guangdong Statistical Year Book 2016, 廣東省及各市區國民經濟和社會發展統計公報, Hong Kong Transport Department & Macao Statistics and Census Service * Estimated data for PRD, Zhuhai, Guangzhou, Shenzhen
3.35m vehicles (20% of Guangdong
province)
2.4%
Cities along GS Cities along West Route Other Cities
⌇ 16 10.7%
12.89
▼0.1%
B.
Per Capita GDP of PRD Cities in 2016
51
72,290
113,274
139,644
163,688
82,645
115,64299,157
132,894
53,23071,459
51,021
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
220,000
240,000G
uang
dong
prov
ince
PRD
*
Hon
g K
ong^
Mac
au^
Gua
ngzh
ou
Shen
zhen
*
Don
ggua
n
Fosh
an
Zhon
gsha
n
Zhuh
ai
Jian
gmen
Hui
zhou
Zhao
qing
(RMB)
- Higher than Dongguan’s
- Zhuhai is close to
Guangzhou’s
7.7%
6.8%
4.2%
6.4%
8.7%
7.4%
5.7%
7.2%
7.4%
8.2%
5.1%
Source: Guangdong Statistical Year Book 2016, 廣東省及各市區國民經濟和社會發展統計公報, Hong Kong Census & Statistics Department and Macao Statistics & Census Service ^ Based on exchange rate RMB1 = HK$1.11664; RMB1 = MOP1.202119 * Estimated data for PRD, Shenzhen
462,047
289,361 ⌇
500,000 8.5%
Cities along GS Cities along West Route Other Cities
4.5%
B. 52 52
GDP of PRD Cities in 2016
2,134
298
1,961 1,949
683863
320223 242
341208
0
500
1,000
1,500
2,000
2,500
3,000
Gua
ngdo
ngpr
ovin
ce PRD
Hon
g K
ong^
Mac
au^
Gua
ngzh
ou
Shen
zhen
Don
ggua
n
Fosh
an
Zhon
gsha
n
Zhuh
ai
Jian
gmen
Hui
zhou
Zhao
qing
(RMB’ bn) 7.5%
8.2% 9.0%
8.1% 8.3%
7.8% 8.5% 7.4% 8.2%
5.0%
Source: 廣東省及各市區國民經濟和社會發展統計公報, Hong Kong Census & Statistics Department & Macao Statistics and Census Service ^ Based on exchange rate RMB1 = HK$1.11664; RMB1 = MOP1.202119
1.9%
▼2.1%
8.3% RMB4,593 billion (58% of Guangdong
province)
RMB1,406 billion (18% of Guangdong
province)
Cities along GS Cities along West Route Other Cities
7,951
6,791
⌇
8,000
B. 53
∼ End ∼