Shenzhen Expressway Announces 2017 Third Quarterly Results

Net Profit Amounts to RMB1,210 Million for the First Three Quarters, Representing a YOY Growth of 27.9%

Shenzhen Expressway Company Limited (“Shenzhen Expressway", or the “Group”; Stock Code: 00548) announced the third quarterly results (unaudited) of the Group for 2017 (the “Reporting Period”). The Third Quarterly Report (“Report”) indicates that net profit attributed to owners of the Group recorded RMB469 million. The Group recorded net profit of RMB1,211 million and earnings per share of RMB0.555 from January to September of 2017, representing a YOY increase of 27.91%.

In the first three quarters of 2017, the Group recorded revenue of RMB 3,371 million, representing a YOY increase of 6.00%. Toll revenue is the main source of the Group’s revenue. The Group achieved toll revenue of RMB 3,177 million from January to September 2017, representing a YOY increase of 15.76%, in which the aggregate toll revenue contributed from consolidation of Shenchang Company and Yichang Company amounted to approximately RMB200 million. The other existing ancillary toll highways of the Group recorded a YOY increase of 8.47%, which was mainly due to the fact that Jihe Expressway and Qinglian Expressway was benefited from the factors such as the organic growth of traffic volume, the improvement of neighboring road networks and the induced growth of traffic volume after implementation of the toll-free policy for the Three Projects.

During the period from January to September 2017, the Group recognized cost of services and financial expenses representing a YOY decrease of 3.19% and 11.04% respectively.

In the first three quarters of 2017, the Group achieved remarkable results in strengthening the main business of toll highways and expanding the environmental protection industry. The Group completed the acquisition of 100% equity interest in Yichang Project in June 2017; In April 2017, the Group subscribed for 15% of the equity interest upon the capital increase of Water Resources Planning.

Institute. The Group had an acquisition of 20% equity interests in Derun Environment at RMB 4,409 million in May 2017. Shares of the Water Resources Planning Institute and the Derun environment are the essential layout of the Group in building the second main industry, forming the new industry pillars and achieving the new scale of industrial efficiency and effective growth, which highlighting the Group's determination to develop new industries.

United Land Company, which is 49%owned by the Group, has acquired the land use right of the Meilin Checkpoint Renewal Project as planned and commenced works including the design, entrustment of construction management and construction tender of Meilin Checkpoint Renewal Project. As of the end of the Reporting Period, the open tender for the entrusted construction management of the project had been completed, and China Vanke Co., Ltd. was the successful bidder, while other work has been pushed forward orderly.

During the Reporting Period, the Group planned to contribute no more than RMB1.2 billion to initiate the establishment of investment and acquisition fund, which is conducive to broaden the financing model and channels for Group's business development. In addition, the investment and acquisition fund can also provide a platform for the Group’s incubation program, helping the Group to gain more investment opportunities in the transportation infrastructure industry and the environmental protection industry.

The management stated, the Group's 2017 first three quarters’ results meet with the expectations. In the future, the Group will around the position of "Construction and Operation Service Provider of Urban and Transport Infrastructure ", make further integrate resources, give full play to the innovation capability in the investment and financing field and in business model. Relying on the capability of resource integration, the Group will actively pushed forward and implement the investment in the toll highways and environmental protection fields, and eventually realize long-term healthy development as well as create more value for shareholders.

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