Guangzhou Investment - 2004 Annual Results

Guangzhou Investment Announces 2004 Annual Results

Strong Economic Growth in Guangzhou and Hong Kong
Brings Encouraging Profits for the Group s Property
Development-Oriented Businesses

(Hong Kong 21 April 2005) Guangzhou Investment Company Limited ( GZI or the Group ; stock code: 0123), one of the ten largest integrated property developers in Guangzhou, is pleased to announce its annual results for the 12 months ended 31 December 2004.
During the period under review, the Group recorded a turnover of HK$4,526,679,000, representing a 15.3% increase compared with the same period in 2003. Profit attributable to shareholders increased 10% year on year, reaching HK$330,823,000. The Group s basic earnings per share were 5.24 HK cents, representing a 7.2% increase compared with the 4.89 HK cents recorded in 2003. In return for the support of our shareholders, the Board of Directors proposed a final dividend payment of HK$0.009 per share. (2003 final dividend: HK$0.0108 per share)
Benefiting from the consistent and robust growth in Guangdong and Hong Kong s economy, the Group s property sales and leasing revenue grew to new extents in 2004. Sales income rose slightly by 1.6% to HK$1,987,231,000, whilst rental income rose sharply by 15.0% to HK$367,050,000. This reflected that the contribution from the Group s rental properties continued to rise. During the period under review, the Group sold 311,500 sq. meters of property floor area. These properties are located in prime areas offering superb facilities. Therefore, the properties received positive sales, bringing the Group s stock to a historical low level. In the Pokfulam area of Hong Kong, the Group launched the sale of its Pokfulam Terrace property, which was well received by the market. The project contributed sales amounting to HK$326,000,000. During the year, several projects commenced operation, bringing the Group s total area of properties leased to 600,000 sq. meters.
In 2004, the Chinese Government implemented numerous policies to control land supply and property financing with an aim to ensure sustainable and healthy development of the properties market. Guangzhou Investment, with its unrivalled strengths and competitiveness, will undoubtedly gain more resources and room for development under these policies. To cope with the changing operating environment, the Group will sharpen its competitive edges and diversify risks by gradually transforming from a sole property developer to a comprehensive commercial property operator with emphasis in both sales and management of properties. The Group will on one hand make use of the influence of commercial properties to consolidate its upstream and downstream business chain to develop other supporting businesses and on the other hand, perfect its services to the customers.
Apart from properties, the Group s toll road and newsprint businesses also recorded considerable growth. The rapid growth of the economy in the Pearl River Delta region and the improving living standards within the region resulted in the increased use of cars. The expansion of the traffic network and the commencement of operation for Jingzhu Expressway brought GZI Transport Limited, a subsidiary of the Group, a profit attributable to shareholders of HK$276,000,000, a significant increase of 23.5% from 2003.
As a result of an increased demand for newsprint and a streamlined internal management, another subsidiary of the Group, Guangzhou Paper Limited, recorded sales volume and turnover of 311,200 tones and HK$1,241,000,000 respectively, year on year increases of 19.6% and 23.3%, even amid the increase in raw material costs.
Looking ahead, Guangzhou Investment will continue to operate its businesses with diligence. For the properties business, the Group will seize every opportunity and leverage on its competence to establish its commercial property business. It will emphasize both property development and operation of investment properties. It will also consolidate its integrated commercial properties operating strategy by strengthening property management and supporting facilities. The Group will also increase development of shopping malls, offices and hotels to shift its product mix towards the middle to high end.
As for the toll road business, the Group will focus on the expansion of high grade expressways so as to upgrade its investment portfolio. The Group expects a further increase in raw material costs for newsprints, therefore, it will seek to increase its production capabilities through the consolidation of internal resources and expand its market share.
Commenting on the annual results, Mr Ou Bingchang, Chairman of Guangzhou Investment, said: Thanks to the efforts of our staff in the past year, Guangzhou Investment has achieved encouraging results. We will continue to capture development opportunities in the future with an aim of bringing optimal investment returns for our shareholders.
About GZI

GZI is one of the leading property developers in Guangzhou. The Group focuses on the development of middle-class residential projects in Guangzhou. It also develops offices and rural residential projects selectively. In addition, the Group has established several businesses which consist of property, pulp and paper, and toll roads connecting to the transportation hub of Guangzhou in mainland China.
For further information, please contact:
iPR ASIA LTD
Jane Yip/ Ellen Chan
Tel: 2136 6175/ 2136 8059
Fax: 2136 6068
Email: janeyip@iprasia.com.hk / ellenchan@iprasia.com.hk
Website: www.iprasia.com.hk