Guangdong Provincial Expressway Development has posted worse than expected 1996 earnings due to less traffic on two toll projects and higher than anticipated taxes. The Shenzhen B-share company earned a net profit of 140.13 million yuan (HK$131 million) last year, against its forecast of 208 million yuan made in its listing prospectus. Company vice-chairman and general manager Zhou Changzhi yesterday said 75 per cent-owned Guangfo Expressway and wholly owned Jiujiang Bridge did not record the expected traffic volume, causing company earnings to drop 25.41 million yuan last year. Guangdong Expressway also assumed it did not have to pay corporate tax last year. Instead it paid 33 per cent in income tax. The higher tax has cut 20.34 million yuan from its bottom line. Despite that, Mr Zhou said Guangdong Expressway was about to issue A shares to mainlanders to raise funds to expand Guangfo Expressway from four lanes - two lanes in both directions - into six lanes, and to boost its 26 per cent holding in Fokai Expressway to 51 per cent. Bank borrowings and debt facilities would also be considered in its quest for funds, he said. The planned A-share issue, involving about 120 million shares, would raise about 600 million yuan to 700 million yuan, either this month or next, he said. Work would begin in the second half of this year to expand Guangfo Expressway to six lanes, to be completed by 1999. About 247 million yuan is required to meet Guangdong Expressway's 75 per cent share in the project. The remaining 25 per cent in Guangfo is held by Hong Kong-listed Chu Kong Shipping Development. Given the funding requirements, Guangdong Expressway is expected to increase its holding in Fokai Expressway in phases. The company hinted it would buy part of the stake from parent Guangdong Provincial Freeway Co this year.