Stock Code：000429，200429 Stock Abbreviation ：Guangdong Expressway A, Guangdong Expressway BAnnouncement No.:2019-031
Summary of 2019 Semi-Annual Report of Guangdong Provincial
Expressway Development Co., Ltd.
1 Important notesThe summary is abstract from full-text of semi-annual report, for more details information , investors shouldfound in the full-text of annual report that published on website of Shenzhen Stock Exchange and other websiteappointed by CSRC.
Director, Supervisor, Senior Manager Objection Statement: None.
All the directors have attended the meeting of the board meeting at which this report was examined
Non-standard audit advice
□ Applicable √ Not applicable
The Board of Directors considered the plan for the distribution of ordinary shares in the reporting period or theplan for the transfer of capital reserve.
□ Applicable √ Not applicable
The company plans not to send cash dividends, do not send bonus shares, not to increase the share capital.
The Board of Directors decided to adopt the Preplan Preference Share Profit Distribution Plan for the reportingperiod
□ Applicable √ Not applicable
II Company basic information
1. Company Profile
| Stock abbreviation: | Expressway A, Expressway B | Stock code： | 000429、200429 |
| Stock exchange for listing | Shenzhen Stock Exchange | ||
| Board secretary | Securities affairs Representative | |
| Name | Yang Hanming | Liang Jirong |
| Contact address | 46/F, Litong Plaza, No.32, Zhujiang East Road, Zhujiang New City, Tihe Disrtict , Guangzhou | 45/F, Litong Plaza, No.32, Zhujiang East Road, Zhujiang New City, Tihe Disrtict , Guangzhou |
| Tel | 020-29004619 | 020-29004523 |
| Hmy69@126.com | 139221590@qq.com |
2. Summary of Accounting data and shareholder change
Indicate by tick mark whether the Company needs to retroactively restate any of its accounting data
√Yes □ No
Retroactive adjustment or restatement of reasonsAccounting policy change In RMB
| Reporting period | Same period of last year | YoY+/-（%） | ||
| Before adjustment | After adjustment | After adjustment | ||
| Operating income（yuan） | 1,483,673,245.21 | 1,535,864,145.14 | 1,535,864,145.14 | -3.40% |
| Net profit attributable to the shareholders of the listed company（yuan） | 736,486,112.30 | 779,002,246.98 | 779,002,246.98 | -5.46% |
| Net profit after deducting of non-recurring gain/loss attributable to the shareholders of listed company（yuan） | 725,039,035.06 | 752,917,711.53 | 752,917,711.53 | -3.70% |
| Cash flow generated by business operation, net（yuan） | 1,050,811,097.23 | 817,279,588.10 | 819,779,588.10 | 28.18% |
| Basic earning per share(yuan/Share) | 0.35 | 0.37 | 0.37 | -5.41% |
| Diluted gains per share(yuan/Share) | 0.35 | 0.37 | 0.37 | -5.41% |
| Weighted average income/asset ratio（%） | 7.53% | 8.60% | 8.60% | -1.07% |
| As at the end of the reporting period | As at the end of last year | YoY+/-（%） | ||
| Before adjustment | After adjustment | After adjustment | ||
| Gross assets（yuan） | 16,404,770,149.44 | 16,295,910,774.45 | 16,295,910,774.45 | 0.67% |
| Shareholders’ equity attributable to shareholders of the listed company（yuan） | 9,192,599,494.10 | 9,586,701,904.06 | 9,586,701,904.06 | -4.11% |
The reasons for the change of Accounting Policy and the Correction of Accounting errors
On April 30, 2019, the Notice of the Ministry of Finance on Revising and Issuing the Format of FinancialStatements of General Enterprises (No. 6 Finance and Accounting [2019]) issued by the Ministry of Financeindicated that the actual government subsidies received should be listed in the item "cash received from otherbusiness activities". In response to such change of accounting policy, the Company adopted the retroactiveadjustment method to retroactively adjust the items reported in the financial statements from January to June 2018,affecting the item "net cash flow generated from operating activities" in the above table.
3.Particulars about top ten shareholders
In share
| Total number of common shareholders at the end of the reporting period | 56,739 | Total number of preferred shareholders that had restored the voting right at the end of the reporting period (if any) (note 8) | 0 | |||||||
| Particulars about shares held above 5% by shareholders or top ten shareholders | ||||||||||
| Shareholders | Nature of shareholder | Proportion of shares held（%） | Number of shares held at period -end | Changes in reporting period | Amount of restricted shares held | Amount of un-restricted shares held | Number of share pledged/frozen | |||
| State of share | Amount | |||||||||
| Guangdong Communication Group Co.,Ltd | State-owned legal person | 24.56% | 513,412,507 | 410,032,765 | 10,337,972 | |||||
| Guangdong Highway Construction Co., Ltd, | State-owned legal person | 22.30% | 466,325,020 | 466,325,020 | ||||||
| Yadong Fuxing Yalian Investment Co., Ltd. | Domestic non State-ow | 9.68% | 202,429,149 | 202,429,149 | Pledge | 156,652,500 | ||||
| ned Legal person | ||||||||
| Tibet Yingyue Investment Management Co., Ltd. | State-owned legal person | 4.84% | 101,214,574 | 101,214,574 | ||||
| Guangdong Expressway Co., Ltd. | State-owned legal person | 2.53% | 52,937,491 | 52,937,491 | ||||
| Guangfa Securities Co., Ltd. | State-owned legal person | 1.45% | 30,364,372 | 30,364,372 | ||||
| Agricultural Bank of China－Jingshun Great Wall Energy Infrastructure Mixed Securities Investment Fund | Other | 1.27% | 26,617,103 | |||||
| China Life Insurance Co., Ltd.－Dividend －Personal dividend -005L-FH002 Shen | Other | 1.15% | 23,965,291 | |||||
| China Life Insurance Co., Ltd.－Traditional－Common insurance products-005L-CT001Shen | Other | 1.08% | 22,495,445 | |||||
| Feng Wuchu | Domestic natural person shares | 0.97% | 20,222,807 | |||||
| Strategic investor or general legal person becoming top-10 ordinary shareholder due to rights issue (if any) | None | |||||||
| Related or acting-in-concert parties among shareholders above | Guangdong Communication Group Co., Ltd. is the parent company of Guangdong Highway Construction Co., Ltd. and Guangdong Expressway Co., Ltd., It is unknown whether there is relationship between other shareholders and whether they are persons taking concerted action specified in the Regulations on Disclosure of Information about Change in Shareholding of Shareholders of Listed Companies. | |||||||
4. Change of the controlling shareholder or the actual controller
Change of the controlling shareholder in the reporting period
□ Applicable √ Not Applicable
There was no any change of the controlling shareholder of the Company in the reporting period.Change of the actual controller in the reporting period
□ Applicable √ Not applicable
There was no any change of the actual controller of the Company in the reporting period.
5.The total number of shareholders of the Company's preferred shares and the shareholdings of the top 10preferred shareholders
□ Applicable √ Not Applicable
The Company did not have any shareholding in the report period.
6. The corporate bonds
Whether the company has a public offering and listed on the stock exchange, and in the semi-annual reportapproved the date of the report did not expire or due to full payment of corporate bonds.
noIII. Discussion and analysis by the management
1.General
The Company is an infrastructure industry, with main business in developing and operating expressway and bigbridges. It is one of the main institutions of developing expressway and big bridge in Guangdong ExpresswaySystem. The expressway industry is the industry helped by government.In the first half of 2019, the company, according to the annual business plan established by the board of directors,soundly did a good job of each work. . In the first half of 2019, the main business income was 1.484 billion yuan,meaning 46.06% of the annual plan was completed; and the operating costs was 550 million yuan, Flat year-on-year,representing completed 38.68% of the annual plan.
In the report period, the vehicle traffic and toll income of the controlled subsidiaries and joint ventures of theCompany are as follows:
| Volume of vehicle traffic in the first half year of 2019（Ten thousand vehicles） | Increase /Decrease(%) | Toll income in the first half year of 2019（Ten thousand） | Increase /Decrease(% | |
| Guangfo Expressway | 3,537.04 | 19.74% | 23,017.10 | 2.19% |
| Fokai Expressway | 3,421.36 | 4.26% | 61,731.41 | -3.33% |
| Jingzhu Expressway Guangzhu East Section | 3,483.62 | -4.35% | 60,184.56 | -5.27% |
| Huiyan Expressway | 2,008.31 | -1.86% | 11,728.74 | -3.66% |
| Guanghui Expressway | 3,082.54 | 10.73% | 90,639.13 | 4.44% |
| Yuezhao Expressway | 1,575.32 | 8.31% | 27,114.74 | 3.18% |
| Jiangzhong Expressway | 2,736.67 | 6.30% | 22,530.61 | -1.90% |
| Guangle Expressway | 1,247.19 | 8.28% | 155,056.82 | 1.45% |
| Kangda Expressway | 131.96 | 3.90% | 12,001.61 | 6.16% |
| Gangkang Expressway | 216.06 | 15.40% | 8,659.92 | 12.80% |
Overall situation: During the reporting period, the increase of Guangfo Expressway traffic volume washigher than that of toll revenue, which was mainly influenced by time-limited goods and distribution of trucks inthe surrounding sections; the toll revenue of Fokai Expressway and Guangzhu Section of Jingzhu Expresswayshowed negative growth year on year, which was mainly influenced by the distributions of the surrounding roadnetwork.
Guangfo Expressway: From July 1, 2018, a traffic restriction on trucks with more than 15 tons (7:00-22:00)has been imposed in the direction of Guangzhou (Yayao-Hengsha Section) that trucks are guided and the timeperiod of Guangzhou-Foshan Section is adjusted. At the same time, the prohibition on goods was virtuallycancelled early in this year in the Foshan First Ring and drivers can drive on the road for free. Thus, theproportion of trucks in Guangfo Section has been declined. However, Guangfo Area featured a intensivetransportation of personnel and materials, complete supporting of surrounding buildings, and continuous growthof cars and vehicles. As a consequence, the increase of traffic volume was higher than that of toll revenue.
Foai Expressway: The toll revenue declined by 3.33% year on year compared with the first quarter, whichwas mainly affected by the following factors: on the one hand, the diversion effect of the second phase of YunzhanHighway was apparent after the opening of the whole line; on the other hand, the tolls of Foshan First Ring Roadthat was originally planned to open in February were repeatedly postponed, but the entry of vehicles wasunrestricted, and the strict control of over-limited and over-load transportation of trucks was not implemented.
Guangzhu Section of Jingzhu Expressway: Due to the combination of multiple factors, such as limited cargoin some periods of Humen Bridge, the completion and opening of Nansha Bridge and Panguan Expressway, thetraffic volume and toll revenue showed negative growth year-on-year.
Gankang Expressway: traffic volume and toll revenue increased by 15.40% and 12.80% respectivelyyear-on-year, and continued to grow on the basis of the first quarter. It is mainly affected by many factors, such asthe construction of the surrounding national highway, the overhaul of sand and stone vehicles, and the restriction
of the passage of some trucks.Kangda Expressway: In the first half of the year, toll revenue increased by 6.16% year-on-year in the first half of this year, which was mainly influenced by the combined influence such as the gradual stabilization of the negative impact of the Dayu Section of the 323 National Highway in 2017 and the stabilization of traffic volume.
2.Matters relating to financial report
(1)Explain change of the accounting policy, accounting estimate and measurement methods as compared with thefinancial reporting of last year.
√Applicable□ Not applicable
①Changes in accounting policies resulting from the implementation of the new financial instrumentguidelinesThe Accounting Standards for Enterprises No. 22 - Recognition and Measurement of Financial Instruments(Revised in 2017), the Accounting Standards for Enterprises No. 23 - Transfer of Financial Assets (Revised in2017), and the Accounting Standards for Enterprises No. 24 - Hedge Accounting Standards for Enterprises(Revised in 2017) (Accounting [2017] No. 9) promulgated by the Ministry of Finance on March 31, 2017, as wellas the Accounting Standards for Enterprises No. 37 - Financial Instruments Presentation (Revised in 2017)(Accounting [2017] No. 14) (collectively referred to as "New Financial Instruments Standards") issued on May 2,2017 requires domestic listed enterprises to implement the new standards from January 1, 2019. Guidelines forfinancial instruments.Through the resolution of the 25th (provisional) meeting of the eighth board of directors of the Company onApril 26, 2019, the Company began to implement the aforementioned new financial instrument guidelines onJanuary 1, 2019.All recognized financial assets under the new financial instrument standards are subsequently measured atthe amortized cost or fair value. On the date of implementation of the new financial instrument standards, thebusiness model of managing financial assets is evaluated on the basis of the existing facts and circumstances ofthe Company on that day, and the characteristics of contractual cash flow on the financial assets are evaluated onthe basis of facts and circumstances at the time of initial recognition of financial assets. The financial assets aredivided into three categories: measured according to the amortized cost and measured according to the publicvalue. Value is measured and its changes are included in other comprehensive income and fair value, and itschanges are included in current profits and losses. Among them, when the financial asset terminates recognition,the accumulated gains or losses previously included in other comprehensive gains will be transferred from othercomprehensive gains to retained gains, not into current profits and losses.Under the new financial instrument standards, based on the expected credit loss, the Company makesprovision for impairment of financial assets measured by amortized cost, investment in debt instruments measuredby fair value and its changes included in other comprehensive gains, lease receivables, contractual assets andfinancial guarantee contracts, and confirms the loss of credit impairment.The Company retrospectively applies the new financial instrument standards, but for classification andmeasurement (including impairment) involving the inconsistency between the previous comparative financialstatement data and the new financial instrument standards, the Company chooses not to repeat. Therefore, for thecumulative impact of the first implementation of this standard, the Company adjusted the retained earnings orother comprehensive earnings at the beginning of 2019 and the amount of other related items in the financialstatements, which were not restated in the financial statements of 2018.The main changes and impacts of the implementation of the new financial instrument guidelines on ourCompany are as follows:
- On January 1, 2019 and beyond, the Company designated some non-tradable equity investments held asfinancial assets measured at fair value and included their changes in other comprehensive income, and reportedthem as investments in other equity instruments.
- For the long-term equity investment of associates, the Company re-classified and measured the financialinstruments according to the new financial instrument standards, and the Company adjusted accordingly accordingto the equity method.
- The Company holds part of the debt instruments, whose cash flow generated on a specific date is only thepayment of principal and interest based on the amount of unpaid principal, and the business model of theCompany's management of the financial assets is to collect the cash flow of the contract. The Company will take itfrom other sources on January 1, 2019 and beyond. Non-current assets are reclassified to creditor's rightsinvestment.
A. Comparison of financial assets classification and measurement before and after the first implementation
date
a. Impact on the consolidated financial statements
| December 31, 2018 (before change) | January 1, 2019 (after the change) | ||||
| Items | Measurement category | Book value | Items | Measurement category | Book value |
| Available-for-sales financial assets | Measured at fair value and included in other comprehensive benefits (equity instruments) | 1,668,791,594.53 | Investment in other equity instruments | Measured at fair value and included in other comprehensive earnings | 1,668,791,594.53 |
| long-term equity investments | Cost method/equity method | 3,145,644,970.07 | long-term equity investments | Cost method/equity method | 3,145,355,906.88 |
b. Impact on the financial statement
| December 31, 2018 (before change) | January 1, 2019 (after the change) | ||||
| Items | Measurement category | Book value | Items | Measurement category | Book value |
| Available-for-sales financial assets | Measured at fair value and included in other comprehensive benefits (equity instruments) | 1,668,791,594.53 | Investment in other equity instruments | Measured at fair value and included in other comprehensive earnings | 1,668,791,594.53 |
| long-term equity investments | Cost method/equity method | 4,679,309,978.88 | long-term equity investments | Cost method/equity method | 4,679,020,915.69 |
| Other non-current assets | amortized cost | 692,903,684.98 | Creditor's right investment | amortized cost | 692,903,684.98 |
B. On the first execution date, the book value of the original financial assets shall be adjusted to a newadjustment table for the book value of the financial assets classified and measured in accordance with theprovisions of the new financial instrument standards.
a. Impact on consolidated statements
| Items | December 31, 2018 (before change) | Re-Class | Re-measurement | January 1,2019 (after change) |
| Measured at fair value and included in other comprehensive earnings: | ||||
| Available-for-sale financial assets (original guidelines) | 1,668,791,594.53 | |||
| Less transfer to other creditor's rights investment | ||||
| Less: transfer to other non-current financial assets | ||||
| Less: transfer to other equity instruments | 1,668,791,594.53 | |||
| Balances shown in accordance with the new financial instrument guidelines | ||||
| Investment in other equity instruments | ||||
| Add: transfer from available-for-sale financial assets (original criteria) | 1,668,791,594.53 | |||
| Re-measurement: re-measurement at fair value | ||||
| Balances shown in accordance with the new financial instrument guidelines | 1,668,791,594.53 |
b. Impact on the Company's financial statements
| Items | December 31, 2018 (before change) | Re-Class | Re-measurement | January 1,2019 (after change) |
| Amortized cost | ||||
| Other non-current assets (original criteria) | 692,903,684.98 | |||
| Less: transfer to creditor's rights investment | 692,903,684.98 | |||
| Balances shown in accordance with the new financial instrument guidelines | ||||
| Creditor's rights investment | ||||
| Add: transfer from other non-current assets (original criteria) | 692,903,684.98 | |||
| Re-measurement: expected credit loss preparation | ||||
| Balances shown in accordance with the new financial instrument guidelines | 692,903,684.98 | |||
| Measured at fair value and included in other comprehensive earnings: | ||||
| Available-for-sale financial assets (original | 1,668,791,594.53 |
| guidelines) | ||||
| Less: transfer to other creditor's rights investment | ||||
| Less: transfer to other non-current financial assets | ||||
| Less: transfer to other equity instruments | 1,668,791,594.53 |
| Balances shown in accordance with the new financial instrument guidelines | ||||
| Investment in other equity instruments | ||||
| Add：transfer from available-for-sale financial assets (original criteria) | 1,668,791,594.53 | |||
| Re-measurement: re-measurement at fair value | ||||
| Balances shown in accordance with the new financial instrument guidelines | 1,668,791,594.53 |
C. Financial assets impairment provision adjustment table on the first implementation datea. Impact on consolidated statements
| Measurement category | December 31, 2018 (before change) | Re-Class | Re-measurement | January 1, 2019 (after change) |
| Measured at fair value and included in other comprehensive benefits (debt instruments) | ||||
| Provision for impairment of available-for-sale financial assets | 37,020,000.00 | 37,020,000.00 | ||
| Investment in other equity instruments | 37,020,000.00 | 37,020,000.00 |
b. Impact on the Company's financial statements
| Measurement category | December 31, 2018 (before change) | Re-Class | Re-measurement | January 1, 2019 (after change) |
| Measured at fair value and included in other comprehensive benefits (debt instruments) | ||||
| Provision for impairment of available-for-sale financial assets | 7,020,000.00 | 7,020,000.00 | ||
| Investment in other equity instruments | 7,020,000.00 | 7,020,000.00 |
D. Impact on retained earnings and other comprehensive earnings as of January 1, 2019
| December 31, 2018 | Consolidated retained earnings | Consolidated surplus reserve | Consolidation of other comprehensive benefits |
| December 31,2018 | 3,938,609,136.59 | 245,109,114.81 | |
| 1. Re-measurement of long-term equity investment | -11,353,413.48 | 11,064,350.29 | |
| January 1, 2019 | 3,927,255,723.11 | 256,173,465.10 |
②Other accounting policy changes
E. On April 30, 2019, the Notice of the Ministry of Finance on Revising and Issuing the Format of FinancialStatements of General Enterprises (No. 6 Finance and Accounting [2019]) issued by the Ministry of Financeadjusts the format of financial statements of enterprises accordingly, and regulates that the detailed items of"management expenses" and "R&D expenses" should be separated from the items of "management expenses" inthe profit statement; it also indicates that the actual government subsidies received should be listed in the item"cash received from other business activities". In response to such change of accounting policy, the Companyadopts the retroactive adjustment method to retroactively adjust the items reported in the financial statements fromJanuary to June in 2018, as follows:
a. Impact on consolidated statements
| January - June 2018 | Before adjustment | After Adjustment | Change |
| Administrative Fees | 75,594,633.97 | 73,109,460.94 | -2,485,173.03 |
| R&D expense | 2,485,173.03 | 2,485,173.03 |
| Other cash receipts relating to operating activities | 39,446,329.98 | 41,946,329.98 | 2,500,000.00 |
| Receipt of other cash related to fund-raising activities | 2,500,000.00 | -2,500,000.00 |
b. Impact on the Company's financial statements
| January - June 2018 | Before adjustment | After Adjustment | Change |
| Other cash receipts relating to operating activities | 46,329,459.08 | 48,829,459.08 | 2,500,000.00 |
| Receipt of other cash related to fund-raising | 293,500,000.00 | 291,000,000.00 | -2,500,000.00 |
(2)Explain retrospective restatement due to correction of significant accounting errors in the reporting period
□Applicable √ Not applicable
N/A
(3)Explain change of the consolidation scope as compared with the financial reporting of last year.
□Applicable √Not applicable
There was no change in the scope of the consolidated financial statements during the reporting period.