The Group will continue to optimize its short closed-loop "Investment, Construction, Financing and Operation" business model through various means of logistics asset securitization. On the one hand, the Group will endeavor to facilitate the application and issuance of publicly traded infrastructure REITs with mature logistics hub projects as their underlying assets. On the other hand, the Group will proactively conduct research and seek to establish new logistics real estate private equity funds to revitalize its quality logistics assets and further unleash their value while retaining the operating rights to the parks as a prerequisite. In addition, the Group will consider investing in premium benchmark projects at both upstream and downstream of the industry chain through the establishment of acquisition funds and development funds, etc. Driven by the dual engines of industry and capital, the Group will continuously promote the expansion of its core logistics business, thereby accelerating its capital recovery to attain the Group's high-quality growth.

2023 marks the second anniversary of the listing of the first batch of publicly traded infrastructure REITs in China. Amid the comprehensive implementation of the expanded fundraising mechanism of publicly traded infrastructure REITs, the launch of pilot projects for consumer-oriented infrastructure, and the optimization of regulations, China's publicly traded REITs market is maturing towards normalized issuance. To establish its first platform of publicly traded REITs and realize asset securitization, the Group is actively planning for the declaration and issuance of public REITs, with the first batch intended to include mature logistics hub projects in Hangzhou and Guizhou as underlying assets. The issuance of public REITs is aimed at revitalizing the Group's premium logistics assets, further accelerating capital recovery and optimizing its investment portfolio, thus creating a positive cycle with the prerequisite of retaining the rights to operate the parks. The Group has achieved a major breakthrough in its issuance of public REITs that the application materials related to the registration and listing of the publicly traded fund were submitted to the China Securities Regulatory Commission ("CSRC") and the Shenzhen Stock Exchange. The Group will schedule the listing and issuance based on market conditions and regulatory approval progress.

As regards the private equity funds, the Group established Shenshi (Shenzhen) Smart Logistics Infrastructure Private Fund Partnership (Limited Partnership) ("Shenshi Fund") with Goldstone Investment Limited, a subsidiary of CITIC Securities Co., Ltd. in 2021. Shenshi Fund, as the main entity, has acquired the Group's logistics hub projects located in Nanchang, Hefei and Hangzhou through public tenders. The Group has completed the injection of these three projects into Shenshi Fund in 2021 and 2022, and the projects have been running smoothly, delivering a stable operational performance. Given that the Group continues to provide professional services such as operational and maintenance functions to the above-mentioned logistics hubs injected into the fund and receives service fees accordingly, the injection of the assets into the fund enables the Group to accelerate capital recovery and facilitate effective investment under the prerequisite that it retains its rights to operate the parks, demonstrating the effective implementation of its "Investment, Construction, Financing and Operation" business model. The Group is actively preparing to establish a new batch of private equity funds and will engage in research on development-focused funds and acquisition funds to promote fund investments. It will also strengthen its collaboration with peers and financial institutions in order to facilitate the integration of industry and capital, and further drive the development of its "Investment, Construction, Financing and Operation" business model.

The Group will optimize its short closed-loop "Investment, Construction, Financing and Operation" business model through a range of channels, further accelerating asset securitization, expanding financing channels, and enhancing the efficiency of its capital utilization. First, the Group will continue to follow up on the initial issuance of the first tranche of publicly-traded REITs, arranging issuance after assessing the current situation and market conditions, as well as the approval progress from regulatory authorities. Second, the Group will steadily push forward the setting up of a private equity fund and finalize the proposal for a new logistics warehousing and storage infrastructure fund. Third, the Group will study and optimize its fund allocation, deepen communications with potential partners, and initiate the establishment of development-focused and acquisition-focused logistics and warehouse investment funds, as well as upstream and downstream investment funds in the industry chain at an appropriate time and in accordance with economic circumstances and the Group's development plans.

With the increased implementation of the national "Two-region Engines" strategy, the Greater Bay Area is set to become one of the most open and economically vibrant regions in China. However, the supply of new land in the Greater Bay Area is limited, particularly in core areas, where land resources are especially precious. The Group's SZI South China Logistics Park is located in the central axis and core node of Shenzhen. With a site area of approximately 580,000 square meters. It is the largest traditional warehousing and logistics park the Group owns in Shenzhen. Promoting the transformation of SZI South China Logistics Park into a south China digital economy super headquarters base is a crucial task for the Group in exploring the long closed-loop "Investment, Construction, Operation and Transformation" development model, following the Qianhai Project.

In 2023, the Group achieved significant advancement in the transformation and upgrading of the first phase of SZI South China Logistics Park Project. According to the public paper entitled "Longhua District National Land and Space Plan (2021-2035) (draft)" released by the Longhua District government, SZI South China Logistics Park is included in the spatial scope of the "North Railway Station Hub Urban Function Node". It has been written into the spatial blueprint for the medium-to-long-term development of Longhua District for the next 15 years. According to the Notice of Shenzhen Urban Renewal and Land Consolidation and Preparation Plan 2023 issued by Longhua Administration of Planning and Natural Resources Bureau of Shenzhen Municipality, SZI South China Logistics Park Land Consolidation and Preparation Benefit Coordination Project has been incorporated into the plan as a new project in Longhua District. Meanwhile, the Group officially entered into the "Land Consolidation and Preparation Supervision Agreement" in October 2023 with Shenzhen Longhua City Renewal and Land Development Bureau, Longhua Administration of Planning and Natural Resources Bureau of Shenzhen Municipality, and Shenzhen Longhua Minzhi Subdistrict Office to implement the project via a comprehensive approach which involves reservation of land and monetary compensation.

Looking ahead, the first phase of SZI South China Logistics Park will be transformed and developed from logistics and warehouse purposes into a piece of comprehensive land focusing on the digital economy industry and supporting high-end commercial and residential functions. By reclaiming the reserved land in phases, the Group aims to gradually develop and operate the park according to the new planned functions for revenue recognition.

Qianhai Project is the first project in which the Group has successfully implemented its long closed-loop "Investment, Construction, Operation and Transformation" development model. By the land consolidation and preparation in Qianhai, the Group was compensated through a land swap by which it received land parcel with a total site area of approximately 120,000 square meters and a total gross floor area of approximately 390,000 square meters (comprising residential area of approximately 190,000 square meters and apartment area of approximately 25,000 square meters), which is valued at RMB8,373 million under new land use arrangement. The appreciation of the land value represents the initial benefit derived from the land consolidation and preparation in Qianhai. With the gradual development of the swapped land parcels and completed properties are being released into the market, the Qianhai Project has generated a profit before tax of approximately RMB14,219 million in six separate instances over the past few years, supporting the Group's financial performance growth steadily. It will also furnish the Group with valuable experience, laying a solid foundation for the seamless execution of its forthcoming transformation and upgrading initiatives.

For Residential Project：The Yicheng Qiwanli Project developed and operated solely by the Group, has a plot ratio-based gross floor area of approximately 65,000 square meters, comprising a residential gross floor area of approximately 51,000 square meters and a commercial gross floor area of approximately 6,000 square meters. The pre-sale of the project commenced on 28 September 2022 and was completed and delivered in December 2023, recognizing revenue of approximately RMB4,952 million and profit before tax of approximately RMB2,635 million.

Yicheng Zhenwanyue is a residential project jointly developed by the Group and a renowned property developer, with the Group holding a 50% equity interest. The first phase of the project, encompassing residential area of approximately 40,000 square meters and commercial area of approximately 3,400 square meters, was launched for pre-sale in 2022 and sold out as of 31 December 2023. The second phase of the project has a plot ratio-based gross floor area of approximately 80,000 square meters, comprising residential area of approximately 50,000 square meters, apartment area of approximately 25,000 square meters and commercial area of approximately 5,000 square meters. The pre-sale of the project began in April 2023. As at 31 December 2023, the project reached a sale rate of 96% with aggregate sales proceeds of approximately RMB3,700 million. The construction of the main structure is currently in steady progress.

As for the commercial part, the Group and SCPG have harnessed their respective strengths to jointly create a unique boutique commercial project known as "Qianhai Yinli" in Mawan area of Qianhai. "Qianhai Yinli" has a total gross floor area of approximately 25,000 square meters. As a slow-paced, courtyard-style neighborhood of a type rarely found in Qianhai and Shenzhen, the project integrates a digitalized lifestyle with a superior quality of life, culture and arts, and social interactions.The project officially commenced operation in September 2022. As of 31 December 2023, the project had attained an overall occupancy rate of approximately 80%.

As for the office part, Shenzhen Yidu Building，with the total gross floor area of approximately 35,000 square meters，Since its launch in July 2021, Yidu Building has positioned itself as an artificial intelligence of things+ (AIoT+) ecological courtyard with industrial operation services, successfully attracting a variety of digital economy enterprises as tenants. As at 31 December 2023, the project had an occupancy rate of 90% with all contracted customers being high-potential digital economy enterprises. This resulted in the creation of an industry cluster with a 100% concentration rate, ranking first in Qianhai in terms of industry concentration for the digital economy.

In addition, the Group owns two separate land parcels in Qianhai, which are designated for office and commercial uses. These land parcels have an aggregate plot ratio-based gross floor area of approximately 92,000 square meters, comprising office gross floor area of approximately 79,000 square meters, commercial gross floor area of approximately 12,000 square meters and community service center with a gross floor area of approximately 1,000 square meters. Given that the two sites are situated within the bonded area, the Group is currently in discussions with government departments regarding related land swap and development issues.

According to the Group's 14th Five-Year development Plan, for its core logistics business, the Group has set its own development goals, which is to focus on (providing) high-quality logistics infrastructure. Through continuous optimization of business models and expansion of business scope, the Group aims to become the top logistics infrastructure development and operation service provider in Shenzhen, the top three in the Greater Bay Area, and striving to enter the top five in the country.

As at 31 December 2023, the Group established its footprint in nearly 40 key logistics gateway cities nationwide, managing and operating 37 logistics hub projects with a total operating area of more than 4.76 million square meters. The Group had obtained operation rights to approximately 9.08 million square meters of land, of which over 2.6 million square meters were in the Greater Bay Area, an increase of 600,000 square meters compared to the end of the previous year.

For the logistics park business, the Group will scientifically and dynamically adjust investment strategies based on internal and external circumstances, taking into account the Group's debt-asset ratio, financing needs and other factors, in line with the goal of operating an aggregate 8 million square metres of logistics park by the end of 2025. The Group will prudently oversee the pace of its investments, ensuring seamless coordination throughout all phases of project execution and encompassing aspects including investment, construction, operation and transformation of projects.

The Group will uphold its "Prioritizing Excellence" strategy for specific projects, placing a greater emphasis on prominent core cities and quality assets, particularly core districts in first-tier and leading second-tier cities that exhibit exceptional operational efficiency and strong resilience. The Group will continue to explore more projects in Foshan and promote to achieve substantial progress for Zhongshan Minzhong Project. The Group will accelerate the implementation of its projects in Beijing, aiming to complete land acquisition for the Fangshan and Shunyi Districts. In Shenzhen, the Fumin parcel and "Public Transportation + Logistics" pilot project will serve as an entry point for the creation of exemplary benchmarking projects to promote the comprehensive development of Shenzhen Three-tiered Logistics Stations. To effectively improve the operating profit margin of its heavy assets and the average net operating profit margin of its mature parks, the Group will spearhead the execution of its distributed photovoltaic business and push into more integrated asset-light and asset-heavy businesses, alongside value-added services, on the premise of ensuring risk management.

The Group's capital expenditures for 2023 amounted to approximately RMB7,800 million (equivalent to HK$8,500 million), primarily comprising investments of approximately RMB2,900 million in the logistics parks projects, investments of approximately RMB2,000 million in Shenzhen Expressway's projects and investments of approximately RMB1,300 million in the Pinghunan Project.

The Group expects that the capital expenditures for 2024 will amount to approximately RMB9,400 million (equivalent to HK$10,400 million), including approximately RMB3,100 million for logistics parks projects, approximately RMB3,600 million for Shenzhen Expressway's projects and approximately RMB1,700 million for the Pinghunan Project.

The Group is committed to maintaining a stable dividend policy and bringing sustainable returns to the shareholders of the Company. Having considered the composition of the profit and cash flows of the Group, the Board recommended a final dividend of HK$0.40 per share for 2023 (2022: final dividend of HK$0.257). Dividend per share increased 56% as compared to the previous year. With a dividend payout ratio of 50%.

In 2024, upholding the business philosophy of "Building Value, Sharing Future"，the Group will continue to cement its targets, and step up its efforts to ensure the high-quality completion of development tasks, thereby enhancing its operational efficiency and creating greater value and returns for all shareholders.

During 2023, revenue from the general-environmental protection business decreased by 11% as compared to the previous year to HK$1,798 million, mainly due to a decrease in sales of wind turbines and a decline in revenue from wind power generation caused by lower wind resource during the Year. Meanwhile, due to the increase in depreciation and amortization expenses of the Bioland Environmental Company and asset impairment of Nanjing Wind Power Company, the general-environmental protection business recorded a net loss of approximately HK$20 million (2022: net profit of HK$248 million)

Due to multiple factors, the performance of the general-environmental protection business did not meet expectations in recent years. In the long run, the general-environmental protection industry is in accordance with the policy direction and still has broad development prospects. After practices of the previous strategic period, the general-environmental protection business of Shenzhen Expressway has gradually focused on two segmented fields: clean energy and solid waste treatment.

Regarding the outlook for general-environmental protection business, the Group will maintain its focus on organic waste treatment, hazardous waste treatment, and clean power generation, accelerating its business expansion and the establishment of its operational capabilities while enhancing its resource investment and construction efforts. With the aim of becoming a segment leader with industry-leading scale advantages, the Group will enhance the treatment capabilities of its organic waste projects and the treatment scale of its hazardous waste projects. The Group will also make additional investments in controlling stakes in wind farms and photovoltaic power plants, to create an integrated clean energy system that capitalizes on Shenzhen Expressway's unique attributes, combining "equipment manufacturing, power plant development and construction, power plant operation and sales, power plant maintenance, and financial leasing". The Group will seek to explore and make appropriate investments in highquality environmental protection projects, such as those involving the scrapping of retired vehicles and in municipal environmental protection initiatives.

In 2023, the global civil aviation market witnessed a rebound in traffic demand. In particular, passenger traffic demand in the PRC civil aviation market rebounded significantly and the overall recovery momentum remained stable. During the Year, Shenzhen Airlines carried 33.22 million passenger trips and recorded a passenger traffic of 51,939 million passenger-km, representing increases of 127% and 132%, respectively, as compared to the previous year.

Shenzhen Airlines' total revenue for the Year increased by 139% to RMB29,988 million (equivalent to HK$33,313 million) as compared to the previous year (2022: RMB12,541 million (equivalent to HK$14,416 million)). Passenger revenue increased by 153% to RMB28,159 million (equivalent to HK$31,281 million) (2022: RMB11,117 million (equivalent to HK$12,840 million)). However, Shenzhen Airlines also faced multiple operational pressures, including uncertainties in the capacity of its fleet and the supply of aircraft materials, persistently high aviation fuel costs, rising airport fees as well as fluctuations in exchange rates and interest rates. In addition, changes in the willingness and mode of passenger travels resulted in shifting market dynamics and intensified competition. During the Year, Shenzhen Airlines recorded a net loss of RMB1,735 million (equivalent to HK$1,928 million) (2022: net loss of RMB11,129 million (equivalent to HK$12,793 million)), representing a year-on-year decrease of RMB9,394 million (equivalent to HK$10,865 million). Based on the equity method of accounting, as the Group's share of accumulated losses in an associate (Shenzhen Airlines) exceeded its interest in that associate, the Group did not recognize any further losses relating to Shenzhen Airlines during the Year (2022: loss of HK$2,666 million).

Looking forward, thanks to the enormous domestic market in the PRC, the civil aviation industry will enter a new cycle of continuously rapid and healthy development with the demand for air passenger traffic continuing to rebound. At the same time, with the further integration and development of the Pearl River Delta and the Guangdong-Hong Kong-Macao region, the future economic potential of the hinterland will be significant, providing a stable foundation for the expansion of Shenzhen Airlines. In light of the new development trends and competitive landscape, Shenzhen Airlines will take advantage of its prime location in the core of the Guangdong-Hong Kong-Macao Greater Bay Area, pour its resources into the development of its base in Shenzhen, actively expand its market in the Greater Bay Area, spearhead campaigns for safety production, quality operation, operational efficiency, service quality, transformational reform and risk prevention, continue to improve its operation and management standards, and maintain its competitiveness in the market.

The equity issues of Shenzhen Airlines is a concern for the market. On the premise of safeguarding the interests of the Company and shareholders, the Group communicates actively with Shenzhen Municipal Government and other parties, striving for appropriate solutions. If there is further information, it will be announced to the market in a timely manner through company announcements.

The Port business is a crucial segment of the Group' s "Four Growth Engines" strategic layout of "Inland Port Networking, Logistics Parks, Air Cargo and Railway Freight Logistics Infrastructure ". Through its "Port Connection Action" strategy, the Group has established two integrated river-sea transportation hub ports (Nanjing Xiba Port and Jiangsu Jingjiang Port), a demonstration project for port-industry-city integration (Henan Shenqiu Port), a regional distribution port (Jiangxi Fengcheng Port) and a port supply chain service platform that connects and integrates heavy assets along midstream and downstream of the Yangtze River, thereby creating twin-star demonstration ports along the Yangtze River and forging a coordinated and differentiated development pattern involving investments and mergers and acquisitions in the port sector with synergies between multi-regional ports and the supply chain business.

Maintaining its primary focus on "mergers and acquisitions as the main focus, and supplemented by new construction", and with the ongoing implementation of its "Port Connection Action" strategy and integration of both asset-light and asset-heavy models, the Group aims to fulfill the potential spin-off listing requirements for its port sector during its "14th Five-Year" development plan period. The Group will reinforce and enhance the core competitiveness of its port sector with the aim of becoming a competitive port operator by continuously expanding its asset-heavy port project investment, developing its asset-light supply chain business, and promoting the amalgamation of both upstream and downstream resources in the industry chain.

In 2023, Jingjiang Port, Shenqiu Port, and Fengcheng Port all commenced operation, thereby strengthening the impact of the Group' s "Port Connection Action" strategy. Capitalizing on its port resources, the Group continued to extend the industry chain of its port operation and bolster the core competitive strengths and sustainability of the port segment.

For the port business, the Group will focus on its long-term objective of spinning off the segment, taking into account the significance of new projects in refining its business model, enhancing synergies across the segment, and enhancing core competitiveness. The Group will also proactively seek expansion and plan project investments, further stepping up its efforts to promote new projects at, among others, Shenqiu Port and Jingjiang Port to ensure that enhanced production and efficiency are achieved, working to improve operational efficiency in accordance with principles of safety and controllability.

As at 31 December 2023, the Group had a total of 120,000 square meters of intelligent and cold storage warehouse space in operation, and approximately 292,000 square meters are currently under construction, proposed for construction or in the planning process.

In respect of the cold chain business, the Group has continued to make encouraging progress in the planning and construction of cold storage warehouses at its logistics hubs in recent years. In 2023, guided by the "Self-exploration of asset-heavy project + Joint operation of asset-light project" business model, the Group jointly established a cold chain operation company with "VX Logistics", a leading company in cold chain logistics industry, to accelerate the development of its cold chain business. As at the end of 2023, cold storage warehouses located at SZ Liguang Project, Shijiazhuang Zhengding Project, Chengdu Qingbaijiang Project and Tianjin Xiqing Project respectively, covering an area of approximately 120,000 square meters, were put into operation. In its development of intelligent warehouses, the Group continued to carry out intelligent transformations of existing logistics hub projects. A total area of 26,000 square meters has undergone intelligent transformation and commenced operations, enhancing customers' storage space utilization rates and inventory turnover efficiency while significantly reducing labor costs.

As outlook for the intelligent and cold chain logistics businesses, the Group will strategically select premium industry benchmark projects, expand its scale and seek improved growth in the development of supply chains and industrial chains, based on cold chain and smart warehousing industry development trends. Taking into consideration of changing market demand and supply dynamics in the prevailing economic environment, the Group will nimbly adjust the pace of its investments, project requirements, and coordination and control mechanisms in cold chain logistics and intelligent logistics, continuously enhancing its operational efficiency.