Wider superhighway helps boost Jiangsu Expressway profits 61.9pc
Jiangsu Expressway, a toll-road operator in the Yangtze River Delta, said net profit jumped 61.93 per cent last year, backed by strong income from the widened Shanghai-Nanjing superhighway.
Net income for the year to December rose to 1.13 billion yuan or 22 fen a share from 696 million yuan or 14 fen a share a year earlier, the company said, using domestic accounting standards.
Revenue increased 84.36 per cent to four billion yuan, it added.
Jiangsu Expressway reopened the Shanghai-Nanjing superhighway at the beginning of last year after work to double the road's width to eight lanes.
The superhighway contributed 2.6 billion yuan in tolls, or 62.58 per cent of total revenue. Daily vehicle volume was 81.98 per cent higher than a year earlier.
The company's share price rose 4.49 per cent to close at HK$6.05 on Friday last week. The stock has gained more than 25 per cent in the past 12 months.
Meanwhile, Anhui Expressway, a toll-road operator in eastern China, said last year's profit jumped 13.66 per cent, thanks to the robust regional economy.
Net profit rose to 749 million yuan or 45 fen a share from 659 million yuan or 40 fen a year earlier. Revenue increased to 1.6 billion yuan, the company said, using domestic accounting standards.
Hening, Gaojie, Xuanguang and Lianhuo Expressway Anhui section, the company's four key toll sources, saw their daily vehicle volume grow 17.76 per cent, 11.35 per cent, 1.35 per cent and 14.31 per cent respectively from a year earlier.
In August last year, the company started work on a 20 billion yuan project to widen Hening Expressway from four lanes to eight lanes. The road, which remained open during the construction, contributed 38 per cent of the firm's revenue last year.
'Reconstruction of expressways has a significant effect on toll-road operators' results,' China Jianyin Investment Securities said in an industry report.
First, it had 'a negative effect on the vehicle volumes, reducing revenue and increasing costs'.
'But once the reconstruction is done, vehicle volumes soon resume while maintenance costs are reduced and profits will rise,' the report said.
'Toll-road companies that have finished reconstruction will attract more attention.'
Anhui Expressway's H share rose 0.7 per cent to close at HK$7.18 on Friday, with an accumulated gain of 64.43 per cent in the past 12 months. Its A shares increased 1.38 per cent on Friday to 8.09 yuan.
Mainland toll-road firms have been enjoying strong growth in a fast-expanding economy and increasing urbanisation across the country.
Shandong Expressway and Shenzhen Expressway earlier reported profits for last year jumped 30.92 per cent and 15.3 per cent respectively.
Huabei Expressway, which operates the Beijing-Tianjin-Tanggu Expressway, said profit rose 3.76 per cent.