On the morning of November 5, the Special General Meeting of Shareholders of Yuexiu Transportation and Infrastructure Co., Ltd. (Stock Code: 01052) was held at Hong Kong Novotel Century Hotel on No.238 Jaffe Road, Wan Chai, Hong Kong to approve the proposals concerning acquisition of three expressways in Hubei Province with unanimous votes.

The three highways approved for acquisition at this shareholders' meeting are located in and around Wuhan, capital of Hubei Province, and will form a network effect with other highways of the Company in Hubei Province, and enhance the Company's market share and competitiveness in Hubei Province. Hancai expressway and Han’e expressway are two of the seven out-of-town radiations in Wuhan. Together with Hanxiao expressway, the Company will have the franchise right to operate three of the seven out-of-town expressways. Daguangnan Expressway connects Hubei Province and Jiangxi Province, is the southern section of Daguan Expressway in Hubei Province, which starts from Daqing, Heilongjiang Province and ends in Guangzhou of Guangdong Province. It is one of the eleven north-south trunk lines in China's national expressway network. Han’e Expressway and Daguangnan Expressway are two major roads leading to Shunfeng Ezhou Airport which is positioned as a national logistics hub and a transshipment airport for air cargo. After its completion, the airport will become the fourth in the world and the first dedicated cargo airport in Asia.

Haicai Expressway

After acquisition, the Company's asset size, holding fee mileage and sustainable development ability will significantly be improved. The Company's total assets will increase by 13.59 billion Yuan, from 22.24 billion Yuan to 35.83 billion Yuan, and the charging mileage of its holding projects will increase by 58.7%, from 337.1 kilometers to 534.9 kilometers.

In this transaction, the Company financed about 60% of the total amount of the transaction through the bank M&A loan, and about 40% of the total amount was paid by the Company's internal financial resources. On the premise of maintaining the same investment grade rating (Baa2 for Moody's and BBB- for Fitch and S&P), the Company made full use of leverage. The acquisition is expected to generate an Internal Rate of Return (IRR) of 9.4%, which is a decent return rate in a slowing global economy. Since the announcement, the Company's share price has risen steadily against a backdrop of underperforming Hong Kong stocks, hitting new highs with the price-to-book ratio over 1 for the first time in a decade. Shares rose in 26 of the 36 trading days ended Nov. 5.The stock price was 6.37 on Sept. 12 and 7.35 on Nov. 5, a cumulative increase of 15.4%.

This acquisition is in line with the Company's development strategy of "based on the Greater Bay Area of Guangdong, Hong Kong, Macao and entering the Central China Region", realizing the balanced allocation of mature assets and growth assets in the portfolio of operational and management assets, forming a network effect and enhancing the market share and competitiveness power in Hubei Province. The Company will improve the traffic flow and income of the target expressways through a variety of precision marketing methods, take advantage of the investment grade credit rating to restructure the debt and reduce the overall financing cost. In addition, Wuhan Headquarters has been set up in Hubei Province, which will give better play to the operation experience in central China, improve management efficiency and give play to scale effect.