Toll-road firm looks to Qianhai in logistics push

Logistics park and toll-road operator Shenzhen International, which owns 380,000 square metres of land in Qianhai, said it has signed a co-operation agreement with New World Development to explore investment opportunities in the special economic zone.

"The agreement will also extend to possible co-operation in toll roads in other mainland cities," he said after the company's interim results announcement yesterday.

He also said Shenzhen International would take a majority stake in logistics projects, but he did not rule out the possibility of allowing the joint-venture partner to take a bigger interest in residential and office developments.

The firm formed a consulting company with Shenzhen government-backed Shenzhen Investment in a 50-50 joint venture yesterday. The consulting firm would work with the municipal authorities in Shenzhen on the land-use conversion rights for its Western Logistic Park in Qianhai.

The park will span 400,000 sqmetres in the Qianhai Shenzhen-Hong Kong Modern Service Industry Co-operation Zone. Currently being used for warehousing and logistical purposes, the site will be converted to commercial and residential use.

Gao said Shenzhen International planned to expand its logistics business to 30 mainland cities over the next five to 10 years in view of the strong demand for such services. "We hope to sign two to three projects in the second half of this year," he said.

He did not give an estimated investment amount but said the land cost for each project would be at least one billion yuan (HK$1.26 billion).

Shenzhen International announced net profit attributable to shareholders rose 6.54 per cent to HK$857.35 million for the six months to June. Turnover declined 2.1 per cent to HK$2.79 billion as toll revenue fell because of policy change.

Toll revenue was hit by the implementation of the unified standardisation of toll fees for all expressways in Guangdong since June 1 and the toll-free policy for passenger cars during key holidays in the second half of last year.

Like last year, no interim dividend was announced.