Net Profit Amounted to RMB 2.19billion

The Board of Directors ("the Board") of Shenzhen Expressway Company Limited (“Shenzhen Expressway ", or the “Company”; Stock Code: 548.HK) is pleased to announce the results of the Company and its subsidiaries (collectively the “Group”) for the year ended 31 December 2014 ("the Year" or “FY2014”).

Shenzhen Expressway recorded revenue of approximately RMB3.62 billion in 2014, of which toll revenue was RMB3.01 billion. Net profit was RMB2.19 billion and the earnings per share was RMB1.003, representing a YOY increase of 203.9%. The Board recommended the payment of a final dividend of RMB0.45 per share in cash for 2014.

Benefited from the sound performance of the businesses such as toll highways and entrusted construction management services, the Group’s operating result maintained steady growth in 2014. Together with the recognition of gains on disposal of Meiguan assets during the Year, the overall profit increased significantly.

Toll revenue maintained stable growth

Benefiting from the organic growth of traffic volume, improvement of road network and proactive marketing campaign, a majority of toll highways of the Group achieved certain extent of growth. In particular, the average daily toll revenue of Jihe East, Jihe West and Qinglian Expressway made a noticeable achievement with a YOY growth of 21.5%, 20.9% and 9.7% respectively. Wuhuang Expressway was affected by some factors such as diversion by road network in the surrounding areas, recording a YOY decrease in toll revenue. Because of the implementation of the Toll Adjustment Proposal, Meiguan Expressway’s toll mileage was shortened, resulting a decrease of revenue contributed to the Group in this year.

Entrusted management services made remarkable progress

Leveraging on its professional experience and advantages, the Group actively expanded the entrusted construction business and strived to achieve various management targets. In 2014, the Group recognised the revenue from the entrusted management services in respect of both Guilong Project and Coastal Phase I of a total of RMB500 million based on the progress of actual settlement, the government audit results, and the completion progress of construction, which made great contribution to the revenue of the Group except that from its main business.

Financial expenses were controlled effectively

The Group’s financial expenses for the year 2014 recorded a YOY decrease of 28%, which was mainly attributable to the decrease in the Group’s average borrowing scale during the Year and the recognition of interest income in respect of the compensation receivables as agreed in Meiguan Expressway Adjustment Agreement.

Gains on disposal of Meiguan assets benefited annual results

According to the agreement between the Group and Shenzhen Government, toll-free for Meilin to Guanlan section of Meiguan Expressway with a mileage of approximately 13.8 km was implemented on 1 April 2014. The Government makes cash compensation paid by three instalments. Accordingly, the Group recognised a net gain from disposal of assets of approximately RMB1.11 billion. After Toll Adjustment Proposal took effect, the results of the Group for the year improved significantly, which has in turn provided valuable opportunities to explore and attempt investment in new business segments. The Group receives a reasonable compensation on market basis for the adjustment of toll collection. Also, it is beneficial to the overall social and economic growth and development of the regions along the highway and therefore is a balanced win-win situation.

The Group has always committed itself to creating higher corporate value and actively implemented the profit distribution policy of cash dividend which can balance the long term and short term interests of the investors, at the same time providing promising and sustainable returns to its shareholders. With consideration of outstanding results achieved in this year, the Board recommended the payment of a final dividend of RMB0.45 per share in cash for 2014, representing 45% of the net profit for the year, including special dividend of RMB0.255 per share for gains on disposal of Meiguan assets accounting for 50% of such gains on disposal. Excluding the effect of gains on disposal of assets and the special dividend, the annual payout ratio was 40%.

The management commented that, 2015 is the beginning year of the third Five-Year Strategy of the Group. The Group needs to raise the management standard, optimise operation model, raise the profitability of our existing assets, selectively acquire quality assets and actively explore new models of business development and profitability in order to respond to the change of the era, rewarding shareholders and the public with outstanding results.

Appendix I: 2014 Annual Results Highlights

Appendix II: Basic Operating Statistics of Various Toll Highways during the Reporting Period