Mr. Deng Renjie Hosted CMPort’s 2019 Annual Results Online Press Conference

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Mr. Deng Renjie Hosted CMPort’s 2019 Annual Results Online Press Conference

The Board of Directors (the “Board”) of China Merchants Port Holdings Company Limited (“CMPort” or the “Company”, HKSE Code: 00144) is pleased to announce the audited consolidated results of the Company and its subsidiaries (the “Group”) for the year ended 31 December 2019.

An online press conference was held on 15 April 2020 in Hong Kong and was hosted by the Executive Vice President of China Merchants Group Limited and the Chairman of the Board (appointed in February 2020) of CMPort, Mr. Deng Renjie. Managing Director Dr. Bai Jingtao, General Manager of Finance Department Mr. Sun Ligan, General Manager of Strategy and Operations Department Mr. Jeffrey Li also attended the meeting and answered questions from the press.

Mr. Bai Jingtao also introduced CMPort’s 2019 annual results in terms of financial highlights, business analysis, operation overview and outlook.

Highlights of 2019 Annual Results of the Group:

lContainer throughput volume rose by 2.4%   year-on-year to 111.72 million TEUs (2018: 109.06 million TEUs);

lTotal bulk cargo volume handled 449 million   tonnes (2018: 502 million tonnes), down by 10.5% year-on-year;

lProfit attributable to equity holders of   the Company totaled HK$8,362 million (2018: HK$7,245 million), up by 15.4%   year-on-year;

ü  Profit attributable to equity holders of   the Company from ports operation totaled HK$9,721million   (2018: HK$8,408 million), up by 15.6% year-on-year;

lBasic earnings per share was 247.84 HK   cents (2018: 219.54 HK cents), up by 12.9% year-on-year;

lAnnual dividend of 80 HK cents per ordinary   share (2018: 95 HK cents per ordinary share). Payout Ratio 33.0%.

Mr. Deng Renjie said, “While facing severe external environmental challenges in 2019, through the unremitting efforts of all staff members of CMPort, the Board is very satisfied with the Company's fair performance in 2019. CMPort has outperformed the market and peers, continuing to maintain the leading position in the global port industry.”

In the first quarter of 2020, the container throughput volume of CMPort was down by 5.6% compared with the same period of last year due to the impact of the Covid-19 pandemic in the off-season of traditional business. Container throughput volume was down by 5.6% YoY in Mainland China, 2.8% YoY in HK and Taiwan and 6.4% YoY in overseas ports, which is still better than its peers. In the press conference, the reporters were all concerned about the impact of Covid-19 on the Group’s annual operation performance. Mr. Deng Renjie emphasized, “In this year, the Group has not only faced the complex situation of trade frictions and geopolitical conflicts, but also the uncertainty and negative impact in short term brought by Covid-19. However, with the mitigation of the Covid-19 pandemic and all the efforts taken by the Group, CMPort will strive to maintain the stable development of its port business.”

Dr. Bai Jingtao added, “Affected by the Covid-19 pandemic, the ports  of the Group experienced container congestion in February and March this year, but it has been alleviated in April. In order to improve our handling ability, we have taken measures in three ways: 1) actively coordinated with the government and customs, push forward work resumption and ensure the cargo movement in ports; 2) take advantages of the Company’s global ports network and cooperation to improve quality and efficiency; 3) make use of CM ePort platform to greatly improve the efficiency of the logistics system and reduce customer costs, achieving a win-win situation.”

Most reporters paid attention to the future investment strategy of CMPort. The management stressed that the piority should be commercially viable, followed by a better return, and finally promote business synergy among the ports of the Group, achieving a balanced and sustainable growth. Mr. Deng Renjie said, “CMPort has completed the acquisition of 8 high-quality terminals of CMA CGM by the end of March 2020, and the other two will be completed within the second quarter of this year.” The acquisition of ports in emerging and developed markets will help provide new impetus for the Company’s future business growth and financial returns. CMPort will continue to focus on the overseas layout of the “East-West routes, South-North routes, and the Belt and Road”, especially to grasp the trend of global industrial transfer and changes in trade flow, and make a good overall development plan for overseas projects.” Dr. Bai Jingtao said, “In terms of acquisition decisions and looking for strategic investors, CMPort has various choices of funds, ports, and shipping companies while choosing its strategic partners. We will maintain a balanced and stable development of business based on the principle of commercial conduct and of maximizing the values to shareholders, while upholding three core principles of regional equilibrium, business equilibrium, and enterprise development equilibrium at the same time.

Regarding the Group's capital expenditure, Mr. Jeffrey Li said, "The capital expenditure of CMPort in 2019 was HK $5.4 billion, which is mainly used for two aspects, which are improving the production capacity of the subsidiaries to enhance core competitiveness, and increasing the investment in innovation technologies. Similar principals will be apply to the capital expenditure in year 2020 on capital operation projects and investment in fixed assets. "

With regard to the measures to reduce the Group's liabilities and financing costs, Mr. Sun Ligan said, "At the end of 2019, the interest bearing debt of the Group was HK $39.4 billion, and the net gearing ratio was 33.6%, down 2.4 percentage points from the end of 2018. In terms of finance cost, the average interest rate of debt declined in 2019, the Group will continue to reduce the financing cost through bond issue and other innovative ways. "

Regarding the Intelligent port development of CMPort, Dr. Bai Jingtao said, “Automation is only a part of intelligent port, the Group has learned from the experience of Shanghai port and Qingdao port, cooperate with leading technology companies, and inject elements such as 5G, AI, CM ePort and block chain etc. The ongoing transformation and upgrading project of Mawan Container Terminal in Shenzhen will be completed in 2020 and put into full operation in mid-2021.”

Regarding the future position of Shenzhen and Hong Kong ports, Mr. Deng Renjie emphasized, “Shenzhen and Hong Kong ports have different positioning and advantages. In Janruary 2019, the Kwai Tsing container terminal operators cooperated to establish the ‘Hong Kong Seaport Alliance’. The establishment of the alliance can improve the service level in the region, reduce costs, and enable Hong Kong to participate in the competition more effectively. As an important international transshipment hub, Hong Kong still has its unique advantages with its effective trade and customs clearance facilities. However, Hong Kong should actively grasp the development opportunities of Guangdong, Hong Kong and Macao Bay area, strengthen cooperation with ports in the Pearl River Delta region, and develop high-end services related to the port industry, so as to further enhance the competitiveness of Hong Kong's ports in various aspects.”

Dr. Bai Jingtao emphasized, “In 2020, the Group will utilise the balanced port investment network in different regions in China and overseas, carry out various measures to maintain productivity while fighting the Covid-19 pandemic, in order to minimise the negative impacts brought by the Covid-19, and hence endeavour to maintain a steady development of port business. The Group will embrace challenges, grasp opportunities, and explore potentials during the process of transformation and innovation, so as to open up new prospects with a proactive attitude. Amidst this complicated and changing external environment, the Group will further enhance the endogenous power for corporate development, striving to create better returns for its shareholders.”

Mr. Deng Renjie

Dr. Bai Jingtao

Mr. Jeffrey Li

Mr. Sun Ligan