HONG KONG SAR –
Media OutReach Newswire – 9 October 2024 –
Yuexiu Transport Infrastructure Limited (“Yuexiu Transport” or the “Company”; stock code: 01052.HK) announced today that a wholly-owned subsidiary of the Company has entered into an agreement to acquire 55% equity interests in the target company which holds the toll collection rights of Henan Yuexiu Pinglin Expressway Company Limited (the “Target Company”) from Guangzhou Yue Xiu Holdings Limited (“Yue Xiu Group”), the controlling shareholder of the Company, for a total cash consideration of approximately RMB758.45 million. The acquisition is subject to approval by independent shareholders.
The Henan Pinglin Expressway, located in the core development area of the Zhongyuan city cluster, has a toll mileage of 106.45 km. It is an important component of the G36 Nanjing-Luoyang Expressway, one of the 18 east-west trunk lines of the national “71118” expressway network, and also one of the main logistics roads connecting the northwestern China and coastal region in southeastern China. The expressway has been in operation for over 18 years since it commenced operation in 2006, with a mature and stable surrounding expressway network.
Given its geographical advantage, Yuexiu Transport believes that the Henan Pinglin Expressway will continue to benefit from the national “Rise of Central China” regional development plan. The Company is optimistic about the long-term economic development in Central China, and the acquisition of the Henan Pinglin Expressway aligns with the Company’s strategy to expand its business footprint in the region and will help the Company further seize opportunities from the “Rise of Central China” plan. Additionally, as the Henan Pinglin Expressway is near the Weixu Expressway and the Lanwei Expressway, which are operated by the Company, a unified operation and management and a district management model would enable to achieve economies of scale and enhance management efficiency.
The Target Company is in good financial position and recorded a profit of RMB119.12 million in the first year after obtaining the toll collection rights of the Henan Pinglin Expressway in February 2023. For the seven months ended 31 July 2024, the Target Company’s revenue was RMB303.52 million and after-tax profit was RMB80.40 million. Upon completion of the acquisition, the Henan Pinglin Expressway is expected to bring enhanced cash flow and profits to the Yuexiu Transport, add momentum to the growth of the Company’s toll revenue and profit, and increase the Company’s earnings per share.
Yuexiu Transport believes that the acquisition of the Henan Pinglin Expressway aligns with the Company’s investment and development strategy of “focusing on the Guangdong-Hong Kong-Macao Greater Bay Area and Central China”. Meanwhile, the Henan Pinglin Expressway will create economies of scale with the Weixu Expressway and the Lanwei Expressway in Central China, directly contributing to the Company’s toll revenue and profit, expanding the Company’s operating scale and enhancing its sustainable development capabilities.
Looking ahead, Yuexiu Transport will continue to refine its integrated business strategy of “investment, financing, operation, and divestment”. By establishing an incubation platform to secure quality assets and leveraging the domestic infrastructure REITs platform, the Company aims to dynamically adjust and continuously optimize its asset portfolio through the synergistic interaction between the incubation platform, infrastructure REITs platform and listed company platform, and strives to create greater value for shareholders.
Hashtag: #YuexiuTransport
The issuer is solely responsible for the content of this announcement.
