Zhejiang Expressway expects a 5 per cent drop in traffic flow this year due to competition from Hangpu Expressway, which began operating in February, and the Hangzhou Bay Bridge which opens in two months. The eastern coast toll road operator reported a net profit of 3.14 billion yuan (HK$3.45 billion) for last year, up 69 per cent from 2006, largely due to contributions from its non-core securities business. Revenue increased 47.6 per cent to 7.03 billion yuan. The company will distribute a final dividend of 24 fen per share. Last year, daily traffic volume on the company's toll road - the Shanghai-Hangzhou-Ningbo Expressway - was 43,001 full-trip-equivalents, an increase of 11.6 per cent. Toll income rose 11.9 per cent to 3.15 billion yuan. The Hangzhou Bay Bridge, one of the longest on the mainland, is built across the bay. It links up Shanghai and Ningbo, bypassing Hangzhou, thus shortening the distance between the two cities. Another highway - the Hangpu Expressway, which started operations last month - links Shanghai Pudong Airport and Hangzhou. 'As the Hangzhou Bay Bridge will open for traffic in May, we've expected our traffic flow will be stolen for at least this year and next year,' said deputy general manager Zhang Jingzhong. 'After we close deals on several new projects, the loss can be gradually offset,' Mr Zhang said, without disclosing details about specific investments. 'We're not in a hurry to seal deals for new investments because raw material costs are too high this year,' he said. 'That will reduce our profitability.' Despite the slow progress in new project investments, the company said lower corporate taxes, which have declined to 25 per cent from 33 per cent, will benefit overall earnings. Shares of the company closed 2.44 per cent higher yesterday at HK$7.14. But the stock has fallen about 30 per cent in the past three months. A UBS report expects traffic flow for the company will see slight improvement this month. But some investors are also concerned about Zhejiang Expressway's brokerage business, which it bought in 2006. General manager Fang Yunti (above) said Zhejiang Expressway hoped to bring in strategic partners for its securities business to strengthen its corporate structure. The company has set no timetable for selling stakes in this profitable business. Goldman Sachs retained its neutral rating on the company, citing near- and medium-term operational headwinds buffeting its toll road and brokerage businesses.