China Merchants Port Group Co., Ltd. Annual Report 2019 (Summary)
Stock Code: 001872/201872 Stock Name: CM Port Group/CM Port Group B Announcement No. 2020-030
CHINA MERCHANTS PORT GROUP CO., LTD.
ANNUAL REPORT 2019 (SUMMARY)
Part I Important Notes
This Summary is based on the full text of the 2019 Annual Report of China Merchants Port Group
Co., Ltd. (hereinafter referred to as the “Company”). In order for a full understanding of the
Company’s operating results, financial position and future development plans, investors should
carefully read the aforesaid full text on the media designated by the China Securities Regulatory
Commission (the “CSRC”).
All the Company’s directors have attended the Board meeting for the review of this Report and its
summary.
Independent auditor’s modified opinion:
□ Applicable √ Not applicable
Board-approved final cash and/or stock dividend plan for ordinary shareholders for the Reporting
Period:
√ Applicable □ Not applicable
Bonus issue from capital reserves:
□ Yes √ No
The Board has approved a final dividend plan as follows: based on 1,922,365,124 shares, a cash
dividend of RMB4.60 (tax inclusive) per 10 shares is to be distributed to shareholders, with no
bonus issue from either profit or capital reserves.
Board-approved final cash and/or stock dividend plan for preferred shareholders for the Reporting
Period :
□ Applicable √ Not applicable
This Report and its summary have been prepared in both Chinese and English. Should there be any
discrepancies or misunderstandings between the two versions, the Chinese versions shall prevail.
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China Merchants Port Group Co., Ltd. Annual Report 2019 (Summary)
Part II Key Corporate Information
1. Stock Profile
CM Port Group/CM Port
Stock name Stock code 001872/201872
Group B
Stock exchange for stock listing Shenzhen Stock Exchange
Contact information Board Secretary Securities Representative
Name Huang Chuanjing Hu Jingjing
24/F, China Merchants Port Plaza, 1 24/F, China Merchants Port Plaza, 1
Address Gongye 3rd Road, Zhaoshang Street, Gongye 3rd Road, Zhaoshang Street,
Nanshan, Shenzhen, PRC Nanshan, Shenzhen, PRC
Fax +86 755 26886666 +86 755 26886666
Tel. +86 755 26828888 +86 755 26828888
Email address Cmpir@cmhk.com Cmpir@cmhk.com
2. Main business of the Company during the reporting period
(1) Main business scope and business models
The Company is principally engaged in the handling, warehousing and transportation of containers
and bulk cargoes, as well as the provision of other ancillary services. It principally operates 24
container berths and 15 bulk cargo berths in the ports in West Shenzhen, 9 container berths, 2 bulk
cargo berths, 10 general cargo berths and 1 berth dedicated to handling coal in Shantou Port, 2
container berths and 33 bulk cargo berths in Zhanjiang Port, 4 multi-purpose berths in Shunde Port,
2 container berths and 6 bulk cargo berths in Zhangzhou Port, 4 container berths in CICT, Sri Lanka,
4 multi-purpose berths, 2 oil berths and 4 container berths in HIPG, 3 container berths in LCT,
Togo, and 4 container berths in TCP, Brazil. Moreover, the Company invests in container hubs in
Shanghai and Ningbo and expands its layout to ports in South Asia, Africa, Europe, South America
and Oceania.
The major business segments of China Merchants Port Group Co., Ltd. are as follows:
Business Segments Applications
Container handling and warehousing: the Company provides ship berthing, loading
and unloading services to ship companies, offers container storage service to ship
companies and cargo owners and provides overhead box services to tractor
Cargo handling and companies. The Company also engages in the businesses of division or merger of
warehousing cargoes in containers, container leasing and container maintenance;
Bulk cargo handling and warehousing: the Company is engaged in bulk cargo
handling and transportation in port zones, as well as storage services in yards. The
major types of cargoes handled include food, steel, woods and sandstones.
The ancillary port-related services of the Company mainly include tugboat berthing
Ancillary
assistance and barge services at the arrival of ships to the ports, tallying in the
port-related services
course of cargo handling, and supply of shore power and freshwater for vessels.
The Company provides various services for clients (including logistics companies,
trading companies or cargo owners), for example, warehouse/yard leasing, loading
Bonded logistics
and unloading in warehouses/yards, customs clearance and division or merger of
operations
cargoes at terminals. It also provides documentation services for tractors arriving or
leaving the bonded logistics parks.
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China Merchants Port Group Co., Ltd. Annual Report 2019 (Summary)
（2）Development stage and cyclical characteristic of the industry in which the Company
operates and its industry position during the reporting period
The port industry is a crucial cornerstone industry for national economic and social progress, and is
closely linked to global economic and trade development. In 2019, the global economy was on a
growing trend in general, but the growth momentum was unstable. The Company faced challenges
due to many factors including the trade frictions in various countries aggravated by the
protectionism and unilateralism, which impact the international trade order; the slowdown in
growth of global container shipping and the downshift of domestic port business continuously
intensify market competition; the increasing severe competition for investment in emerging markets
overseas, technology advancement in the port and shipping industry and emerging of new business
models. .
Affected by the sluggish economic and trading conditions, the demand in the global container
shipping market was volatile in 2019. As forecasted in the Clarkson Report, despite the overall
weakening demand in the container shipping market in 2019, the competition further intensified. In
order to secure better competitive advantages, various shipping companies continued to carry
forward fleet expansion, hence market capacity continued to grow steadily. At the same time, due to
the impact of ship reforms brought by the International Maritime Organization's 2020 Sulphur
Limitation Order, the scale of idle capacity in 2019 increased significantly year-on-year.
The growth rate of global port container throughput declined in 2019. According to data from
Alphaliner, the global container port throughput amounted to 837 million TEUs in 2019, up by 2.5%
year-on-year. In terms of market share by container throughput, the top 3 regions in order are China
(including Hong Kong), Southeast Asia and North Europe, and the top 3 fastest growing regions in
order are South Europe, South Asia and Southeast Asia. Driven by the global economy and trade,
the global port business declined in general in 2019. The growth rate of global port container
throughput reached 2.5% in 2019, lower than that of 5.2% in 2018. According to the information
published by the Ministry of Transport of the People’s Republic of China, the accumulated port
container throughput in China amounted to 261 million TEUs in 2019, representing a year-on-year
increase of 4.4%.
The Company is the largest global leading port developer, investor and operator in the PRC, with a
comprehensive port network at major hub locations along coastal China. It has also successfully
established presence in South Asia, Africa, Europe, Mediterranean, Oceania and South America. By
its proactive, sound and efficient operating style, the Company capitalises on its global port
portfolio, professional management experience, the self-developed state-of-the-art terminal
operation system and integrated logistics management platform for exports and imports, thereby
providing its customers with timely and efficient port and maritime logistics services along with
comprehensive and modern integrated logistics solutions. In addition, the Company also invests in
bonded logistics operation and launches integrated park development business to facilitate the
transformation and upgrade of port industry, develop port-related industries and increase industry
efficiencies, which allows it to create greater value through the synergies of the existing terminal
network.
3. Key Financial Information
(1) Key Financial Information of the Past Three Years
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
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China Merchants Port Group Co., Ltd. Annual Report 2019 (Summary)
□ Yes √ No
Unit: RMB
2019 2018 2019-over-2018 change 2017
Operating revenue
12,123,829,423.74 9,703,394,622.58 24.94% 7,544,635,284.96
(RMB)
Net profit attributable to
the listed company’s 2,898,192,168.84 1,090,418,910.77 165.79% 2,365,214,907.45
shareholders (RMB)
Net profit attributable to
the listed company’s
shareholders before 1,037,766,875.23 516,155,803.81 101.06% 498,373,377.67
exceptional gains and
losses (RMB)
Net cash generated
from/used in operating 5,501,873,415.94 4,288,575,424.84 28.29% 3,475,037,036.28
activities (RMB)
Basic earnings per share
1.59 0.61 160.66% 1.32
(RMB/share)
Diluted earnings per
1.59 0.61 160.66% 1.32
share (RMB/share)
Weighted average return
8.71% 3.88% 4.83% 10.24%
on equity (%)
Change of 31 December
31 December 2019 31 December 2018 2019 over 31 December 31 December 2017
2018 (%)
Total assets (RMB) 156,696,917,845.87 128,018,084,415.68 22.40% 109,135,164,260.01
Equity attributable to the
listed company’s 35,972,804,419.42 30,760,475,412.93 16.94% 28,474,748,165.25
shareholders (RMB)
(2) Key Financial Information by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Operating revenue 2,702,894,522.99 3,131,458,898.34 3,178,406,039.64 3,111,069,962.77
Net profit attributable to the
814,944,249.12 1,484,237,081.49 171,091,424.23 427,919,414.00
listed company’s shareholders
Net profit attributable to the
listed company’s shareholders
262,409,245.18 306,996,084.91 155,647,010.17 312,714,534.97
before exceptional gains and
losses
Net cash generated from/used in
1,148,963,121.64 1,407,898,793.88 1,399,691,070.83 1,545,320,429.59
operating activities
Indicate by tick mark whether any of the quarterly financial data in the table above or their
summations differs materially from what have been disclosed in the Company’s quarterly or interim
reports.
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China Merchants Port Group Co., Ltd. Annual Report 2019 (Summary)
□ Yes √ No
4. Share Capital and Shareholder Information at the Period-End
(1) Numbers of Ordinary Shareholders and Preferred Shareholders with Resumed Voting
Rights as well as Holdings of Top 10 Shareholders
Unit: share
Number of
preferred
shareholders
Number of ordinary
Number of preferred with resumed
Number of ordinary shareholders at the
shareholders with voting rights
shareholders at the 34,398 month-end prior to 35,454 0 0
resumed voting rights at the
period-end the disclosure of
at the period-end month-end
this Report
prior to the
disclosure of
this Report
5% or greater shareholders or top 10 shareholders
Sharehol Increase/decre
Total shares
Nature of ding ase in the Restricted Unrestricted
Name of shareholder held at the Pledged or frozen shares
shareholder percentag Reporting shares held shares held
period-end
e Period
CHINA
MERCHANTS
INVESTMENT Foreign
59.75% 1,148,648,648 0 1,148,648,648 0 0
DEVELOPMENT legal person
COMPANY
LIMITED
CHINA
MERCHANTS
State-owne
GANGTONG
d legal 19.29% 370,878,000 0 0 370,878,000 0
DEVELOPMENT
person
(SHENZHEN) CO.,
LTD.
SHENZHEN
INFRASTRUCTURE
INVESTMENT
FUND-SHENZHEN Fund and
INFRASTRUCTURE wealth
3.37% 64,850,182 64,850,182 64,850,182 0 0
INVESTMENT managemen
FUND t products
PARTNERSHIP
(LIMITED
PARTNERSHIP)
CHINA-AFRICA State-owne
DEVELOPMENT d legal 3.33% 64,102,564 64,102,564 64,102,564 0 0
FUND person
State-owne
BROADFORD
d legal 2.88% 55,314,208 0 0 55,314,208 0
GLOBAL LIMITED
person
CMBLSA RE FTIF
TEMPLETON Foreign
1.56% 29,976,596 -13,468,608 0 29,976,596 Unknown
ASIAN GRW FD legal person
GTI 5496
Foreign
NORGES BANK 0.15% 2,802,863 0 0 2,802,863 Unknown
legal person
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China Merchants Port Group Co., Ltd. Annual Report 2019 (Summary)
CHINA
State-owne
MERCHANTS
d legal 0.13% 2,513,355 -127,665 0 2,513,355 Unknown
SECURITIES (HK)
person
CO., LTD.
Domestic
MAI SHUQING natural 0.12% 2,376,747 15,700 0 2,376,747 Unknown
person
Domestic
SHEN HUAILING natural 0.08% 1,519,849 1,519,849 0 1,519,849 Unknown
person
Strategic investors or general legal
person becoming top-ten
N/A
shareholders due to placing of new
shares (if any)
China Merchants Gangtong Development (Shenzhen) Co., Ltd. (CMGD) is a majority-owned
Related or acting-in-concert parties subsidiary of Broadford Global Limited (Broadford Global), and Broadford Global Limited is the
among the shareholders above controlling shareholder of China Merchants Investment Development Company Limited (CMID). The
Company does not know whether the other unrestricted shareholders are related parties or not.
Top 10 unrestricted shareholders
Shares by type
Name of shareholder Unrestricted shares held at the period-end
Type Shares
CHINA MERCHANTS
RMB ordinary
GANGTONG DEVELOPMENT 370,878,000 370,878,000
share
(SHENZHEN) CO., LTD.
BROADFORD GLOBAL Domestically
55,314,208 listed foreign 55,314,208
LIMITED
share
Domestically
CMBLSA RE FTIF TEMPLETON
29,976,596 listed foreign 29,976,596
ASIAN GRW FD GTI 5496
share
Domestically
NORGES BANK 2,802,863 listed foreign 2,802,863
share
CHINA MERCHANTS Domestically
2,513,355 listed foreign 2,513,355
SECURITIES (HK) CO., LTD.
share
MAI SHUQING RMB ordinary
2,376,747 2,376,747
share
Domestically
SHEN HUAILING 1,519,849 listed foreign 1,519,849
share
VANGUARD EMERGING Domestically
MARKETS STOCK INDEX 1,262,936 listed foreign 1,262,936
FUND share
INDUSTRIAL AND
COMMERCIAL BANK OF
CHINA-FULLGOAL CHINA RMB ordinary
1,260,101 1,260,101
SECURITIES DIVIDEND INDEX share
STRENGTHEN SECURITIES
INVESTMENT FUND
RMB ordinary
CHEN ZEHONG 1,240,000 1,240,000
share
Related or acting-in-concert parties
among the top ten unrestricted
China Merchants Gangtong Development (Shenzhen) Co., Ltd. is a majority-owned subsidiary of
public shareholders and between
Broadford Global Limited. The Company does not know whether the other unrestricted shareholders
the top ten unrestricted public
are related parties or not.
shareholders and the top ten
shareholders
Top ten ordinary shareholders
conducting securities margin N/A
trading (if any)
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China Merchants Port Group Co., Ltd. Annual Report 2019 (Summary)
(2) Number of Preferred Shareholders and Shareholdings of Top 10 of Them
□ Applicable √ Not applicable
No preferred shareholders in the Reporting Period.
(3) Ownership and Control Relations between the Actual Controller and the Company
5. Corporate Bonds
Does the Company have any corporate bonds publicly offered on the stock exchange, which were
outstanding before the date of this Report’s approval or were due but could not be redeemed in full?
No.
Part III Operating Performance Discussion and Analysis
1. Performance during the reporting period
(1) External Environment Analysis
According to the “World Economic Outlook” update report published by the International Monetary
Fund (IMF) in January 2020, the global economic growth rate of 2019 was expected to be 2.9%,
down by 0.7 percentage point year-on-year, among which, developed economies grew by 1.7%
while emerging markets and developing economies grew by 3.7%, down by 0.5 percentage point
and 0.8 percentage point as compared to those of 2018, respectively. Total global trade volume
(including goods and services) grew by 1.0%, representing a decrease of 2.7 percentage points as
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China Merchants Port Group Co., Ltd. Annual Report 2019 (Summary)
compared to that of 2018.
Despite the complex and challenging internal and external environment, the Chinese economy
maintained steady growth in 2019. The annual GDP growth was 6.1%, representing a decrease of
0.5 percentage point over the previous year. The long-term positive trend of China’s economy
remained unchanged. Facing the new normal of the economy, China continued to deepen the
supply-side structural reform and strengthen the countercyclical adjustments with a view to achieve
high-quality economic development. In 2019, the economic development witnessed a number of
positive changes with continuous enhancement and upgrade of economic structure, substantial
outcomes achieved in terms of optimization of industrial structure and significant benefits brought
by tax cut and fee reduction policies as well as steady implementation of control targets of “three
stabilizations” in the real estate market. Meanwhile, the economic growth continued to be exposed
to downward pressure as affected by unfavorable factors such as ongoing US-China trade frictions,
stable but slowing industry development, insufficient investment demand and unstable consumption
demand. According to the statistics published by the General Administration of Customs, China’s
total import and export value amounted to RMB31.54 trillion in 2019, representing an increase of
3.4% as compared to that of 2018, among which the export value was RMB17.23 trillion,
representing an increase of 5%; while import value was RMB14.31 trillion, representing an increase
of 1.6% year-on-year. Trade surplus amounted to RMB2.92 trillion, representing an increase of
25.4%.
2. Port Business Review
In 2019, the Company’s ports handled a total container throughput of 112.93 million TEUs, up by
2.9% year-on-year, among which the ports in Mainland China contributed container throughput of
84.88 million TEUs, indicating an increase of 4.3% year-on-year, which was mainly driven by
steady development of the Mainland China’s economy and consistent growth momentum of import
and export trade. The Company’s operations in Hong Kong and Taiwan contributed an aggregate
container throughput of 7.21 million TEUs, representing a decrease of 6.1% as compared with the
same period of the previous year. Benefited from the growth of the terminal operation of CICT in
Sri Lanka, LCT in Togo and PDSA in Djibouti, a total container throughput handled by the
Company’s overseas ports grew by 0.9% year-on-year to 20.84 million TEUs. Bulk cargo volume
handled by the Company’s ports decreased by 8.9% year-on-year to 409 million tonnes, of which
the Company’s ports in Mainland China handled a total bulk cargo volume of 480 million tonnes,
representing a decrease of 9.3% year-on-year, which was affected by, among others, international
trade friction, African Swine Fever and adjustment of cargo source structure of certain enterprises;
the Company’s overseas ports handled a total bulk cargo volume of 6.29 million tonnes,
representing an increase of 26.1% year-on-year, which was mainly attributable to the business
growth in PDSA in Djibouti and HIPG in Sri Lanka.
Pearl River Delta region
The Company’s terminals in the West Shenzhen Port Zone handled a container throughput of 11.42
million TEUs, up by 0.7% year-on-year; bulk cargo volume amounted to 13 million tonnes, down
by 27.9% year-on-year, mainly affected by the change in international trade conditions, African
Swine Fever and changes in cargo source structure. Chu Kong River Trade Terminal Co., Ltd.
handled a total container throughput of 1.09 million TEUs, down by 6.6% year-on-year while bulk
cargo volume amounted to 3.53 million tonnes, up by 43.1% year-on-year. Dongguan Machong
Terminal handled bulk cargo volume of 12.27 million tonnes, down by 7.2% year-on-year.
Guangdong Yide Port Co., Ltd. handled a total container throughput of 0.3 million tonnes, up by
33.5% year-on-year while bulk cargo volume amounted to 2.26 million tonnes, up by 55.7%
year-on-year, mainly benefited from the expansion of new customers and new routes and further
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China Merchants Port Group Co., Ltd. Annual Report 2019 (Summary)
release of terminal production capacity.
Yangtze River Delta region
SIPG handled a container throughput of 43.30 million TEUs, up by 3.1% year-on-year. Bulk cargo
volume handled declined by 23.4% year-on-year to 120 million tonnes, which was mainly attributed
to the decrease in coal unloaded amount after adjustments made against the structure of bulk cargo
source by SIPG. Ningbo Daxie China Merchants International Terminals Co., Ltd. handled a
container throughput of 3.29 million TEUs, representing an increase of 4.1% year-on-year.
Bohai Rim region
Qingdao Qianwan United Container Terminal Co., Ltd. handled a total container throughput of 7.92
million TEUs, representing an increase of 14.3% year-on-year, driven by the growth of containers
of new international and domestic routes; Qingdao Qianwan West Port United Terminal Co., Ltd.
handled bulk cargo volume of 15.59 million tonnes, representing an increase of 0.3% year-on-year;
Qingdao Port Dongjiakou Ore Terminal Co., Ltd. handled bulk cargo volume of 59.90 million
tonnes, indicating an increase of 4.4% year-on-year. Dalian Port (PDA) Company Limited handled
a container throughput of 10.22 million TEUs, down by 8.0% year-on-year. Bulk cargo volume
handled declined by 2.5% year-on-year to 130 million tonnes. Laizhou Harbour Affairs (莱州港务)
handled bulk cargo volume of 22.72 million tonnes, representing a decrease of 0.1% year-on-year.
With the successful completion of consolidation of Tianjin Port’s container segment, Tianjin Five
Continents International Container Terminals Co., Ltd. and Tianjin Container Terminal Co., Ltd.
contributed a total container throughput of 4.47 million TEUs during the year. The Company’s
business volume in relation to Tianjin Project recorded an increase of 64.5% year-on-year.
South-East region of Mainland China
Zhangzhou China Merchants Port Co., Ltd. (“Zhangzhou Port”), located in Xiamen Bay Economic
Zone, handled a container throughput of 0.42 million TEUs, decreased by 7.7% year-on-year, while
its bulk cargo volume handled decreased by 43.2% year-on-year to 8.14 million tonnes, which was
mainly affected by African Swine Fever and the environmental policies. Xiamen Bay China
Merchants Terminals Co., Ltd., which officially commenced operation in May 2019, handled a bulk
cargo volume of 0.27 million TEUs. Shantou China Merchants Port Group Co., Ltd. handled a
container throughput of 1.34 million TEUs, up by 3.5% year-on-year, and a bulk cargo volume of
7.09 million tonnes, down by 23.2% year-on-year, which was mainly due to the impact of “bulk
cargoes to containers” and the decrease in domestic demand on coal business as well as the fact that
expansion of sandstone business was restricted by environmental policies.
South-West region of Mainland China
Zhanjiang Port (Group) Co., Ltd. handled a container throughput of 1.11 million TEUs, up by 12.6%
year-on-year, mainly attributable to the development of premium domestic routes in the southern
and northern regions as well as regional water-to-water transshipment and the expansion of cold
chain services business. It also handled a bulk cargo volume of 91.17 million tonnes, down by 0.8%
year-on-year.
Hong Kong and Taiwan
Modern Terminals Limited and China Merchants Container Services Limited delivered an
aggregate container throughput of 5.57 million TEUs, down by 6.1% year-on-year. Kao Ming
Container Terminal Corp. in Kaohsiung, Taiwan, handled a total container throughput of 1.64
million TEUs, representing a decrease of 6.3% year-on-year.
Overseas operation
In 2019, a total container throughput handled by the Company’s overseas operations increased by
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China Merchants Port Group Co., Ltd. Annual Report 2019 (Summary)
0.9% year-on-year to 20.84 million TEUs, among which container throughput handled by CICT in
Sri Lanka rose by 7.4% year-on-year to 2.88 million TEUs. The wheeled and bulk cargo business in
HIPG progressed well with a bulk cargo volume amounting to 0.50 million tonnes, indicating an
increase of 183.8% year-on-year. Container throughput handled by LCT in Togo increased by 7.7%
year-on-year to 1.13 million TEUs. Container throughput handled by Tin-Can Island Container
Terminal Limited (referred to as TICT) in Nigeria was 0.47 million TEUs, representing a decrease
of 2.5% year-on-year, mainly affected by vessels stranded at the terminals. Container throughput
handled by PDSA in Djibouti amounted to 0.92 million TEUs, up by 6.8% year-on-year while bulk
cargo volume amounted to 5.68 million tonnes, up by 20.2% year-on-year, mainly attributed to the
continuous substantial GDP growth as well as increase in volume of food, steel and vehicles in
Ethiopia, its main hinterland. TL handled container throughput of 13.25 million TEUs, representing
a decrease of 2.8% year-on year. Container throughput handled by Kumport in Turkey increased by
1.9% year-on-year to 1.28 million TEUs; while bulk cargo volume handled was 0.10 million tonnes
up by 19.8% year-on-year. TCP in Brazil contributed an annual container throughput of 0.92
million TEUs, up by 32.0% as compared to that from March to December of the previous year and
up by 12.5% as compared to that of the full year of the previous year, mainly attributable to the
growth in trading of domestic produce and vehicles parts and components.
(3)Implementation of business plan during the reporting period
During the reporting period, the Company adhered to its strategic directives and the general
operation philosophy of “enhancing core capability, insisting on both quality and efficiency,
capitalizing on opportunities of this era and striving to become a world’s leading enterprise” with an
unwavering aspiration to reinforce its foundation and made innovation with a pragmatic attitude.
Striving to achieve breakthroughs in five key aspects, namely the building of homebase port, port
consolidation, overseas expansion, comprehensive development and innovative development, the
Company actively pushed forward the implementation of various key tasks and optimized and
upgraded its core ports operation over the past year, successfully accomplishing various operational
objectives.
Regarding the development of its homebase ports, the Company continued to promote the building
of West Shenzhen homebase port into a world-class leading port in China and CICT and HIPG
overseas into regional leading ports in South Asia. In terms of West Shenzhen homebase port in
China, the Company proactively advanced key projects such as berth upgrade, shore and bridge
heightening and channel dredging in a view to solving the bottleneck encountered in the
development of West Shenzhen Port Zone and hence upgrading the hardware environment of the
port. The Company facilitated continuous improvement in the customs environment and further
reduction of operational costs to optimize the software environment of ports. The Company also
promoted vertical development of integrated operation to enhance the overall influence and
competitiveness of West Shenzhen homebase port, at the same time adhering to the
technology-driven development approach to steadily advance the development of Mawan Intelligent
Port. In terms of the building of overseas homebase port, leveraging the advantage of synergy
between CICT and HIPG, the Company strived to develop its South Asia port network with Sri
Lanka as the center.
In terms of port consolidation, the Company has established a strategic layout “with a focus on
Guangdong-Hong Kong-Macao Greater Bay Area, connecting regions along Belt and Road
Initiatives with a broad global network coverage” through strategic reconstruction. It has also
completed the capital injection in Zhanjiang Port Group and steadily pushed forward work in
relation to the entrusted management of Liaoning Port Group and achieved preliminary results.
As for overseas expansion, by seizing the opportunities arising from the major national initiative of
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China Merchants Port Group Co., Ltd. Annual Report 2019 (Summary)
the “Belt and Road” and international industries migration, the Company has proactively grasped
the investment opportunities in ports, logistics and related infrastructure. In respect of the
transaction regarding the acquisition of interests of no more than 10 quality terminals under CMA
CGM through TL, a formal agreement has been executed with the cooperating parties, which will
further improve the global port network and hence enhance the Company’s core competitiveness
and influence. The Company has also successfully introduced two strategic investors for TCP
Terminal in Brazil, which is the Company’s new attempt to optimize the allocation of its overseas
inventories.
In respect of comprehensive development, the Company actively explored and promoted the
“Port-Park-City” comprehensive development model and achieved preliminary progress. As the
business volume of the comprehensive development project in Djibouti increased steadily, the
Company will devote greater efforts in the cultivation of its market development team to enhance
market development. The Company has completed the revision on the overall planning for the
future development of HIPG in Sri Lanka, confirming the business development direction of the
port zone. The one-stop service center for introduction of business and investment officially
commenced operation.
With regard to innovative development, the Company pushed forward the “digitalisation strategy”
and continued to promote the establishment of “CM ePort”. Mawan Intelligent Port project and the
automatic loading and unloading project at large bulk and general cargo terminal in Zhanjiang Port
were well underway. West Shenzhen Port Zone issued the first blockchain electronic invoice in
China’s port sector, and launched the pilot program of its self-developed blockchain electronic
DO/EIR and documentation function for domestic container business. The Company collaborated
with 11 enterprises such as China Mobile and Huawei in promoting and establishing the “5G
intelligent port innovation laboratory”, and realised the first RTG Remote Control operation under
5G network at Mawan Port, which optimized and enhanced the informationization level of ports
comprehensively. The establishment of “Development and Research Center of CMPort” marked the
completion of the industry development platform empowered by technology. The industrial fund,
which focuses on investments in innovative development of ports, will be launched and
implemented in the near term. Looking forward, the Company will leverage the financial platforms
to facilitate the synergy of resources among various port groups and industries with a view to
building up a port ecosystem to support the projects of startup companies and grasp the
opportunities arising from the rapid growth of emerging industries, so as to promote the
transformation and upgrade of the port industry to expand the rooms for development and improve
the development quality, which will bring new vitality into the traditional core port operation.
2. Significant Change to Principal Activities in the Reporting Period
□ Yes √ No
3. Product Category Contributing over 10% of Principal Business Revenue or Profit
Unit: RMB
Gross YoY change in YoY change in YoY change in
Operating revenue Cost of sales profit operating cost of sales gross profit
margin revenue (%) (%) margin (%)
By operating division
Port
11,547,072,185.86 7,185,667,723.72 37.77% 25.72% 35.49% -4.49%
operations
11
China Merchants Port Group Co., Ltd. Annual Report 2019 (Summary)
By operating segment
Mainland
China, Hong
8,872,027,132.24 5,968,372,275.68 32.73% 33.70% 41.53% -3.72%
Kong and
Taiwan
Other
countries and 3,251,802,291.50 1,680,548,644.03 48.32% 6.01% 10.40% -2.05%
regions
4. Business Seasonality that Calls for Special Attention
□ Yes √ No
5. Significant YoY Changes in Operating Revenue, Cost of Sales and Net Profit Attributable
to the Listed Company’s Ordinary Shareholders or Their Compositions
□ Applicable √ Not applicable
6. Possibility of Listing Suspension or Termination
□ Applicable √ Not applicable
7. Matters Related to Financial Reporting
(1) YoY Changes to Accounting Policies, Accounting Estimates or Measurement Methods
The Accounting Standards for Business Enterprises No. 21 – Lease (hereinafter referred to as “New
lease standard”) revised and issued by Ministry of Finance on 7 December 2018 required that
enterprises listed both domestically and overseas and enterprises listed overseas who prepare the
financial statements by International Financial Reporting Standards or Accounting Standards for
Business Enterprises shall implement it form 1 January 2019, and other enterprises implementing
the Accounting Standards for Business Enterprises shall implement it from 1 January 2021.
According to the requirements of Ministry of Finance, enterprises whose subsidiaries are listed
overseas and prepare the financial statements by International Financial Reporting Standards or
Accounting Standards for Business Enterprises can implement the new lease standard in advance.
The Company, in accordance with the requirements of Ministry of Finance, implemented the new
lease standard from 1 January 2019. Refer to Announcement on Changes of Accounting Policy
(Announcement No. 2019-031) on www.cninfo.com.cn. disclosed on 30 March 2019. In accordance
with the regulations of new standards governing financial instrument, the Company shall not adjust
the information between the comparable periods, and the accumulative influence in the first
12
China Merchants Port Group Co., Ltd. Annual Report 2019 (Summary)
execution of the new standards shall be adjusted to the retained earnings at the period-begin and the
amount of other relevant item in the financial statements.
On 30 April 2019, the Format of 2019 General Enterprises Financial Statement was revised and
printed by the Ministry of Finance, making partial amendments to the format of financial statements.
The changes of format of financial statements were implemented from the interim financial reports
on 30 June 2019. Refer to Announcement on Changes of Accounting Policy (Announcement No.
2019-063) on www.cninfo.com.cn. disclosed on 31 August 2019.
On 19 September 2019, the Format of 2019 Consolidated Financial Statement was revised and
printed by the Ministry of Finance, making partial amendments to the format of financial statements
on the basis of the Format of 2019 General Enterprises Financial Statement and the Format of 2018
Financial Enterprises Financial Statement. The changes of format of financial statements were
implemented from the third quarter financial statements on 30 September 2019. Refer to
Announcement on Changes of Accounting Policy (Announcement No. 2019-076) on
www.cninfo.com.cn. disclosed on 31 October 2019.
For further information, please refer to (III) Changes in Main Accounting Policies and Estimates in
Part XI Financial Statements for details.
(2) Retrospective Restatements due to Correction of Material Accounting Errors in the
Reporting Period
□ Applicable √ Not applicable
No such cases.
(3) YoY Changes to the Scope of Consolidated Financial Statements
On 31 December 2018, the subsidiary of the Company, China Merchants International Terminal
(Zhanjiang) Co., Ltd. held 1,620,000,000 ordinary shares of Zhanjiang Port, accounting for 40.2916%
of the total shares issued by Zhanjiang Port. On 2 January 2019, the Company signed the
Agreement of Share Transfer of Zhanjiang Port (Group) Co., Ltd. with Sinotrans Guangdong Co.,
Ltd., which transferred 201,034,548 shares of Zhanjiang Port held by Sinotrans Guangdong Co.,
Ltd., accounting for 5% of total shares issued on the signing date with the consideration of transfer
of RMB375,334,390.00.
The wholly-owned subsidiary of the Company Chiwan Wharf Holdings (Hong Kong) Limited
(hereinafter referred to as “CWH (H.K.)”) signed in Zhanjiang on 8 January 2019 the Agreement on
a Capital Increase to Zhanjiang Port (Group) Co., Ltd. with Zhanjiang Infrastructure Construction
Investment Group Co., Ltd. (hereinafter referred to as “Zhanjiang Infrastructure Investment”) and
13
China Merchants Port Group Co., Ltd. Annual Report 2019 (Summary)
Zhanjiang Port (Group) Co., Ltd. (hereinafter referred to as “Zhanjiang Port”) (hereinafter referred
to as the “Capital Increase Agreement”). According to the provisions of the Capital Increase
Agreement, Zhanjiang Port issued 1,853,518,190 additional ordinary shares at the price of
RMB1.867 per share or the equivalent in the foreign currency (based on the exchange rate at the
time of payment) to increase its registered capital to RMB5,874,209,145. CWH (H.K.) subscribed
for 1,606,855,919 such ordinary shares, accounting for 27.3544% of the issued shares of Zhanjiang
Port as at the date of issuance of such shares, at a total price of RMB3,000,000,000.77 or the
equivalent in the foreign currency (based on the exchange rate at the time of payment) (hereinafter
referred to as "the Transaction"); and Zhanjiang Infrastructure Investment subscribed for
246,662,271 shares, accounting for 4.1991% of the issued shares of Zhanjiang Port as at the date of
issuance of such shares, at a total price of RMB460,518,459.96.
As of 3 February 2019, the registration and filing procedures of the Transaction for business change
was finished, and the capital increase to Zhanjiang Port by the Company’s wholly-owned subsidiary
CWH (H.K.) was completed. Upon the completion of the Transaction, the Company’s interest in
Zhanjiang Port has increased to 58.3549%. Therefore, Zhanjiang Port has since been included in the
scope of the Company’s consolidated financial statements.
For and on behalf of the Board
Bai Jingtao
Legal representative of
China Merchants Port Group Co., Ltd.
Dated 16 April 2020
14
