Net Profit Amounted to RMB 685million

 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 2012 ("the Year" or “FY2012”).

Shenzhen Expressway recorded a revenue of about 3,135million yuan in 2012 (RMB, same as below). Net profit was 685million yuan and earnings per share was 0.314. The Board of Directors proposed a final dividend of RMB 0.13 per share (including tax).

Toll revenue is the main source of revenue of Shenzhen Expressway. In 2012, as affected by the combination of such factors as slowdown in the growth of macro-economy,  the tightening industry policy, as well as the changes in the traffic distribution in the road networks, the annual toll revenue of Shenzhen Expressway was about 2,730million yuan, substantially similar to that for the previous year. Of which, the implementation of toll free scheme for small passenger vehicles on holidays and unified toll fees standardization carried out in Guangdong Province, resulted an approximately 8% drop in toll revenue of the Group. On the other hand, relying on the core business, Shenzhen Expressway has launched in related businesses such as entrusted management services and advertising, realised the revenue of 410million yuan in 2012, accounting for 13% of the Group’s total revenue.

In 2012, Net profit of Shenzhen expressway was 685million yuan, representing a decrease of 21.8% as compared with the previous year. The Group made adjustments on the policy of Provisions for Maintenance/Resurfacing of highways and the related accounting estimates in 2011, which exerted different effects on the operating results for both years. Excluding the data of related Provisions for Maintenance/Resurfacing, the Net Profit of the Group in 2012 was substantially similar to the year of 2011. During the reporting period, total toll revenue of the Group and profit derived from the toll highways invested by the Group remained steady, expensed cost for highway maintenance decreased, profit from the entrusted construction management services increased YOY, however, the rigid cost including the cost of depreciation and amortisation and the financial expenses increased. As affected by the combination of aforesaid factors, the annual performance of the Group were substantially similar to that for the previous year.

For the business performance, average daily toll revenue of Yanpai Expressway, Shuiguan Expressway, Nanguang Expressway and Yanba Expressway in Shenzhen region recorded a growth of 10.8%, 7.4%, 6.8% and 4.9% respectively in 2012, while average daily toll revenue of Meiguan Expressway, Jihe East, Jihe West and Shuiguan Extension recorded a YOY decline of 7.2%, 11.9%, 12.2% and 21.0% respectively, which was negatively influenced by the implementation of the new toll fees standard or toll free policy during the year. Among the 8 projects invested outside Shenzhen, only the revenue of Jiangzhong Project and GZ W2 Expressway slightly declined, while the remaining projects recorded growths. Of which，the operational performance of Qinglian Expressway was elevated, benefit from the connected roads were opened to traffic, and its annual toll revenue was 537million yuan, representing an increase of approximately 66million yuan when compared to the same period in 2011, which became the major source of revenue growth in the Group during the reporting period.

For the business development, all projects were progressing well, basically achieve the management targets set at the beginning of the year. The main maintenance works for the road surface of Jihe East have been completed in January 2013, the reconstruction and expansion works for North Section of Meiguan Expressway has been carried forward on schedule, which is planned to be completed at the end of 2013. Among the entrusted construction projects of the Group, most of the contracted sections of Nanping (Phase II) were completed，and the section connecting with Nanguang Expressway was opened to traffic on 1 August 2012. At the end of 2012, the whole understructure of Coastal Project was completed and the main surface of the project has been linked up. The construction of the main part of the project is expected to be completed in the second half of 2013 and opened for traffic. On the basis of pushing ahead the construction management of Guilong Project during the year, the Group participated in the bids for relevant land, and conducted an in-depth research and study on realising the land value from various aspects, laid a favorable foundation for the formulation of the next business plan.

In 2012, the Group adopted a flexible but cautious financial strategy, duly conducted study on new financial instruments and their types, implemented a dynamic management on the liquidity, actively addressed the changes of finance environment, saved the financial resources and maintained the financial safety. During the reporting period, the Group got a steady operating cash flow, financial position remains solid.

During recent years, the external operating environment of the toll highway industry is undergoing major transitions and changes, which will create pressure and challenge for the operations and management of the company. Management team asserts that the Group will continue to adhere to the philosophy of sound operation, continue to monitor the changes in external environment, adopted proactive management and marketing strategies for the continuous improvement of our operational performance. Moreover, the Group will continue to explore and attempt to enter into new types of business, try various business mix in order to diversify the industry risks amid the changes of operating environment, continue to look for opportunities and directions with an open-minded attitude, in favor of the Group’s long-term development.

Appendix I:

2012 Annual Results Highlights

Appendix II:

Basic Operating Statistics of Various Toll Highways during the Reporting Period