BAY AREA DEV: Hehe China Development and Guangdong Highway Construction plan to jointly invest 7.3 billion yuan in Guangzhou-Shenzhen-Zhuhai Company

According to the Zhitong Finance APP, BAY AREA DEV (00737), ShenGaoSi (00548), and Shenzhen International (00152) jointly announced that on January 24, 2025, Hehe China Development (a non-wholly-owned subsidiary of BAY AREA DEV) and Guangdong Highway Construction signed a capital increase agreement. Accordingly, Hehe China Development and Guangdong Highway Construction agree to contribute RMB 3.285 billion and RMB 4.015 billion, respectively, to Guangshen Zhu Company (considered a subsidiary of BAY AREA DEV) in the form of registered capital. Upon completion of the capital contribution matters, Hehe China Development and Guangdong Highway Construction will hold 45% and 55% equity in Guangshen Zhu Company, respectively. Guangshen Zhu Company is mainly responsible for the construction, operation, and management of the Guangzhou to Shenzhen section of the Jinggang'ao Expressway. The Guangzhou to Shenzhen section of the Jinggang'ao Expressway is a major expressway connecting three major Chinese cities: Guangzhou, Dongguan, and Shenzhen. It is an important part of the national expressway network, including the Jinggang'ao Expressway and the Shenhai Expressway, starting from the Huangcun (Guangdan) Interchange in Guangzhou and ending at the Huanggang Port in Shenzhen (the border between Hong Kong and Shenzhen), with 23 toll stations along the route. The total length of the entire line is 122.8 kilometers, and it is a closed dual-direction expressway with 6 lanes. Since it officially opened for operation in 1997, the traffic volume on the Guangzhou to Shenzhen section of the Jinggang'ao Expressway has grown rapidly, with the average daily mixed traffic volume in 2023 and the first three quarters of 2024 being 632,000 and 631,000 vehicles, respectively, and the average daily toll revenue being approximately RMB 7.924 million and RMB 7.918 million, respectively. The investment, construction, operation, and maintenance of expressways are the main businesses of BAY AREA DEV Group. The signing of the capital increase agreement provides necessary funding sources for the implementation of the approved road section expansion and reconstruction project, which will help enhance the traffic capacity and service level of the approved road section, strengthen BAY AREA DEV Group's core competitiveness in the toll road industry, align with BAY AREA DEV Group's development strategy, and also align with the development strategies of Shenzhen International and ShenGaoSi