Shenzhen Investment Bay Area Development : Interim Report 2022

Business Review

Overall Business Performance

During the period under review, the aggregate average daily toll revenue of the GS Superhighway and the GZ West Superhighway decreased by 20% YoY to RMB9.13 million and the total toll revenue amounted to RMB1.65 billion. The decrease in toll revenue was mainly due to the continuous outbreak of COVID-19 pandemic in Guangdong Province. Cities along the GS Superhighway and the GZ West Superhighway, such as Shenzhen, Dongguan, Guangzhou, Zhongshan and Zhuhai, experienced multiple waves of pandemic, and certain regions implemented strict lockdown control measures for a short period of time, resulting in a significant decrease in passenger and freight traffic, which had a direct impact on the traffic of the expressway. The negative impact of the pandemic continued. In addition to the impact of the COVID-19 pandemic on the social transportation volume, the diversion impact caused by the newly opened expressways and reconstructed local roads in the surrounding areas of the GS Superhighway and the GZ West Superhighway also resulted in the YoY decrease in the operational performance of the GS Superhighway and the GZ West Superhighway. The average daily toll revenue, average daily full-length equivalent traffic and average daily mixed traffic of the GS Superhighway decreased by 20%, 20% and 17% YoY to RMB6.21 million, 71,000 vehicles and 507,000 vehicles respectively; the average daily toll revenue, average daily full-length equivalent traffic and average daily mixed traffic of the GZ West Superhighway decreased by 20%, 20% and 21% YoY to RMB2.92 million, 41,000 vehicles and 215,000 vehicles respectively.

All the residential units of the first phase of the Grand Park City have been launched for pre-sale and part of the sales revenue has started to be recognised based on completion stage. During the period under review, the contracted sales amounted to approximately RMB360 million.

In March 2022, the Company issued an announcement regarding "Possible Acquisition of 51% Equity Interest in Shenzhen Guangshen Coastal Expressway Investment Company Limited from the Controlling Shareholder". The due diligence and asset valuation of the transaction have been basically completed. The negotiation and internal procedures between the Company and its controlling shareholder in respect of the transaction are still in progress. Further information will be announced to the market when appropriate.

2 Shenzhen Investment Holdings Bay Area Development Company Limited

Business Review

Operating Environment

Domestic and External Economic Situation

In the first half of 2022, the international situation was complex and severe. The intensifying geopolitical conflicts and the continued escalation of Russia-Ukraine crisis caused a huge impact on global economic and trade transactions and commodity prices, and also increasing the stagflation risk of the global economy. In addition, the spread of the COVID-19 pandemic in multiple regions of Mainland China and the continuous introduction of control measures strongly affected the supply and demand sides of the economy, which led to a significant increase in downward pressure on the economic performance in Mainland China. Against this complicated economic environment, the GDP of Mainland China and Guangdong Province grew by 2.5% and 2.0% respectively in the first half of 2022, overcoming the impact of the unfavourable factors.