Guangzhou Investment Announces 2009 Interim Results

During the Period, operating revenue of the Group was approximately HK$3,015 million, representing an increase of 42.2% over the same period last year. Operating profit amounted to HK$1,022 million, an increase of 67.7% year-on-year. Profit attributable to equity holders amounted to approximately HK$684 million, an increase of 47.

0% year-on-year. Basic earnings per share was HK 9.6 cents (2008 interim: HK6.53 cents). The Board resolved not to declare an interim dividend for the first half of 2009(2008 interim: HK2.60 cents). The Board believes that with commitment of more financial resources to the development of property business, the Group will enhance return to shareholders.

Mr. Lu Zhifeng, Chairman of the Group, said, In the first half of 2009, the global economy remained sluggish while China and Guangzhou City managed to maintain satisfactory GDP growths of 7.1% and 8.5% respectively. With an array of effective economic stimulus policies implemented by the State and local governments, the property market remained stable while the transaction areas and values of commodity housing over the country and Guangzhou City increased significantly.

As the domestic property market continued its positive trend together with the Group s active business strategy, the Group s property business performed well in the first half of 2009.

During the Period, Guangzhou Investment actively increased its land bank by acquiring at land auctions on 2 June and 10 June three residential sites: two in Jiangmen, Guangdong Province and the other being the last residential site in the Pearl River New City, Guangzhou, respectively. The sites have GFA for development of 432,000 square metres in total and 22,500 square metres, respectively.

Meanwhile, the Group acquired on 16 July two other residential sites with total GFA for development of 86,700 square metres in Guangzhou University City. Currently, undeveloped properties of the Group totalled 3,783,000 square metres.

Guangzhou Investment has investment properties of approximately 1,011,400 square metres in total. During the Period, fair value gain on revaluation of investment properties increased by HK$349 million to HK$8,670 million. Rental revenue and property management fees amounted to HK$136 million and HK$177 million respectively, representing a decrease of 15% and an increase of 14%, respectively, over the same period last year.

During the Period, Guangzhou International Finance Center (the Guangzhou IFC ) has actively carried out initial preparation work for leasing while having successfully entered into a hotel management agreement with the Four Seasons Group, a joint venture agreement on property management with Jones Lang LaSalle and a leasing agent agreement for office premises with CB Richard Ellis.

By introducing the abovementioned internationally renowned companies, the overall value of the Guangzhou IFC is expected to raise and a considerable income will be brought about to the Group in the long run.

In respect of toll road business, GZI Transport has further increased the proportions of expressways in its asset portfolio and revenue upon completion of the acquisition of Cangyu Expressway. During the Period, despite a continued decline in operating performances of Class I highways and the cessation of toll collections on Guangcong Highway I and Xiang Jiang Bridge II since January 2009, operating revenue from toll road business recorded an increase of 2.

7% to approximately HK$507 million. Nevertheless, impacted by an impairment loss on certain Class I highways, profit attributable to equity holders decreased by 46.6% year-on-year to HK$176 million. Accordingly, profit attributable to the Group amounted to HK$80 million.

Looking ahead, Mr. Lu said, In the second half of 2009, the PRC s government is expected to continue its implementation of moderately relaxed monetary policy so as to achieve its target of maintaining a GDP growth of 8%. However, in coping with surges in property prices in the first half year, the government may ensure a healthy market development through measures including increasing land supply and property purchase costs.

Accordingly, the property industry will possibly encounter changes in the policy environment in the short to medium term. Despite this, due to the lack of new supply in Guangzhou s urban area, it is expected that property prices will stay high in the second half of 2009. Projects such as Springland Garden, Ling Nan Riverside and Jiang Nan New Mansion, which are located in the central district of Guangzhou, will be launched in September and October this year and robust sales are expected.

Together with the pre-sold but not-yet-recognized GFA of 275,400 square metres and contract sales of HK$3,205 million, the Group expects a further growth in its results in the second half of 2009.

Guangzhou Investment Company Limited (the Company ) was listed in Hong Kong in 1992 and is one of the top 10 integrated property developers in Guangzhou. The Company s principal businesses include property development and the investment in and operation of toll roads, with its businesses mainly concentrated in the Guangzhou area.

Two subsidiaries of the Company are independently listed in Hong Kong, of which GZI Transport Limited (HKEx Stock Code: 1052) was listed in 1997 and is principally engaged in the operation of toll road businesses, while GZI Real Estate Investment Trust (HKEx Stock Code: 0405) was spun off and listed in 2005 and is principally engaged in the operation of leasing properties.