1. What is the influence of the expansion of Meiguan Expressway and Shuiguan Expressway on the traffic volume during the expansion period?

The impact of the road expansion on the traffic volume is mainly happened in the last stage of the expansion which road surfaces are under construction, it normally takes around four to six months. During the period of road surface reconstruction, the Company will take into account measures such as complement construction on a section-by-section basis, night work and traffic regulation to mitigate such impact.

2. How is the progress of the Outer Ring Expressway? What is the opinion of the management for its investment?

The preliminary works are going forward well. The evaluation report on aspects such as the environmental impacts and geology was completed and received replies to it; the toll proposal of the project was also approved. Meanwhile, an in-depth study on the revenues and risks of the project, with the aim to verify its investment value is further pushing ahead. Outer Ring Expressway is the last of the planned expressway in the Shenzhen Municipal. Following the commencement and progression of the unification of Shen, Guan, Hui (Shenzhen-Dongguan-Huizhou), the advantages in terms of its route will become more prominent. However, the project involves a large investment scale and a vast amount of costs. The Company will make its investment decisions based on aspects such as enhancing the design plans and the investment mode, as well as seeking support from the government, and after taking due consideration of the returns of the project and the burden bearing capability of the Company’s financial resources.

3. Is there any new investment plan of the Company?

For projects investment and acquisition, the overall strategy of the Company is to actively study and reserve the quality project resources. The Company will take due consideration of the returns of the projects and the burden bearing capability of the Company’s financial resources for investment decision-making. The principles include:
1. Avoid investment in green-field toll highway projects outside Shenzhen region.
2. Acquire existing toll highway projects based on the principles to improve ROE and to help the capital operation.
In addition to the expansion plans announced, currently the Company has no any new investment or acquisition plans.

4. How will the Company finance for the capital needed in the future? Will the Company finance by equity?

Currently, the major financing method of the Company is bank borrowings. Being a high debt situation, the Company’s financial strategy is to appropriately reduce its capital costs and strive to prevent financial risks on the premise of maintaining financial stability and security. The measures will be supplied in 2010 include:
1. Appropriately increase the proportion of foreign loans and arrange relevant financial instruments to lock the exchange rates and interest rates of foreign currency-denominated liabilities.
2. Make capital contributions to Qinglian Company to lower down the overall borrowing costs.
3. Maintain rational proportion of fixed interest borrowings and appropriately reduce current liabilities.
4. Maintain the highest credit rating and good co-operation relationship with banks.
5. Continue to study the financing instruments in the capital market and to widen financing channels.
The Company is keeping in study on the feasibility of equity financing and will choose the appropriate time to push it ahead based on the comprehensive consideration of the needs of the development and the interests of shareholders.

5. What is the Company’s dividend payout policy?

The Company puts emphasis on shareholder’s returns and has maintained around 50% dividend payout ratio for years, and will maintain a stable dividend payout policy in the future.

6. There are industry peers developing their businesses in industries other than highway industry. What is the strategy of the Company in this respect?

The Company adheres to the development strategy of focusing on toll highway operations as its core business. At the present stage, the values of toll highway industry rest on its stable, safe and abundant cash flows, not high returns or high growth rates. As the road networks of national expressways improve, investment opportunities in quality highway projects decrease. Besides, the policies for toll highways after expiry of their operation periods are still unclear. Accordingly, the Company will appropriately study and attempt for investment opportunities in new industries. However, such attempts will be made in respect of the Company’s principal business and its core business capabilities. For example, in the new strategic period, the Company will appropriately expand its investment in the existing advertising business, strengthen the expansion of road entrusted construction and entrusted management businesses, and actively study the policies, profit models and business risks for the development and use of lands along expressways. The Company will pursue new business development by fully capitalizing on its own advantages and capabilities.