As at 30 June 2024, the Group established its presence in 40 logistics gateway cities nationwide, managing and operating 40 logistics hub projects with a total operating area of approximately 4.94 million square meters, and an overall occupancy rate of approximately 88% within mature logistics parks. The Group had obtained operation rights to approximately 8.33 million square meters of land, of which approximately 2.45 million square meters were in the Guangdong-Hong Kong-Macao Greater Bay Area (the "Greater Bay Area"). Despite the fierce market competition, the Group remained customer-centric, consistently enhancing its service quality, improving customer loyalty and further strengthening its brand influence.

For the second half of 2024, in response to the internal and external circumstances, the Group will promptly slow down its incremental investments and shift its work focus to "enhancing operational capabilities and improving operational efficiency". Stepping up its efforts in investment promotion, the Group has implemented a series of proactive and pragmatic measures, such as establishing a strategic customer engagement mechanism and exploring the growing demand in emerging industries, so as to realize the efforts in investment promotion into tangible business outcomes. At the same time, the Group will continue to pursue opportunities that integrate heavy and light assets along with value-added services. The Group will intensify its efforts in asset-light operations, management services projects, cold chain logistics, and distributed photovoltaic applications as its key growth businesses. Additionally, it is committed to enhancing revenue in its core businesses while effectively improving the operational capabilities and efficiency of its assets.

With regard to incremental investments, the Group will be more prudent in executing its "Prioritizing Excellence" strategy by focusing on investments in prominent core districts with sound operational efficiency and strong resilience to risks. In Shenzhen, the Group will focus on the comprehensive layout of Shenzhen Three-tiered Logistics Stations, using the "Public Transportation + Logistics" and "Metro + Logistics" pilot projects as entry points to create exemplary benchmark projects. Meanwhile, the Group will continue to accelerate the construction of Shenzhen International Integrated Logistics Hub Center, leveraging the competitive advantages of the railway freight yard operator, to strive to augment the volume and revenue of freight train operations. As for the Greater Bay Area (excluding Shenzhen), the Group will continue to optimize the management and operation of its projects in Foshan and Zhongshan. It will also speed up the implementation of the projects in Beijing that are under discussion, with the goal of acquiring the land parcels in Fangshan and Shunyi Districts.

SZI South China Logistics Park transformation project represents a major attempt of the Group to explore the long closed-loop business model of "Investment, Construction, Operation and Transformation". The Group entered into the "Land Consolidation and Preparation Supervision Agreement" 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 in October 2023 for the consolidation and preparation of approximately 530,000 square meters of land for phase I of SZI South China Logistics Park. The project will be implemented by way of reservation of land and monetary compensation.

In the first half of 2024, the transformation and upgrading of the phase I of SZI South China Logistics Park made a series of progress, with all tasks being carried out in an orderly manner, and the Group is striving to secure the first batch of land transfer contracts within 2024. In particular, the transformation and upgrading efforts of SZI South China Logistics Park have received tremendous government support and are being advanced as one of the first pilot projects for the implementation of land consolidation and preparation reform. The successful auction of the first parcel of land reclaimed by the government through land consolidation and preparation process, and the successful attraction of a number of large scale state-owned enterprises, has provided a reference value for the reserved land of the project. As one of the first key “Concentrated Contiguous Land Projects” in Shenzhen, it has participated in global investment solicitation, anchoring a new position as the “Central International Engineering Design Headquarters Economic Cluster”.

In the future, land function of the park will be transformed and upgraded from logistics and warehousing to a comprehensive land parcel focusing on the digital economy industry and supporting high-end commercial and residential functions. The Group will gradually develop, construct, and operate the park by reserving land in phases in accordance with the new planned function, thereby generating profits and contributing to the returns of shareholders.

The Group's capital expenditures for the first half of 2024 amounted to approximately RMB3,900 million (equivalent to HK$4,200 million), primarily comprising investments of approximately RMB1,800 million in the logistics parks projects, investments of approximately RMB900 million in Shenzhen Expressway's projects and investments of approximately RMB600 million in the Pinghunan Project.

The Group expects that the capital expenditures for the second half of 2024 will amount to approximately RMB6,500 million (equivalent to HK$7,000 million), including approximately RMB2,100 million for logistics parks projects, approximately RMB2,600 million for Shenzhen Expressway's projects and approximately RMB900 million for the Pinghunan Project.

For the six months ended 30 June 2024, the Group recorded a total revenue of approximately HK$6,610 million, representing a decrease of 4% as compared to the corresponding period of the previous year (excluding the impact of exchange rate, maintained at a similar level with that of the previous year). Profit attributable to shareholders increased by 609% to approximately HK$653 million, primarily due to the Group's successful injection of two logistics hub projects into ChinaAMC-Shenzhen International Warehousing & Logistics Close-end Infrastructure Securities Investment Fund ("ChinaAMC-Shenzhen International REIT"), which generated a profit after tax of approximately HK$587 million. In addition, proactive optimization of the domestic and foreign currency structure significantly reduced foreign exchange losses.

In the first half of 2024, the Group made significant strides in its "Port Connection Action" strategy, establishing Nanjing Xiba Port and Jiangsu Jingjiang Port as sea-river transshipment hub ports, with Henan Shenqiu Port and Jiangxi Fengcheng Port serving as distribution ports, further enhancing the core competitiveness and sustainable development of the Group's port segment. Capitalizing on its abundant port resources, the Group continued to extend the industry chain of its port operations, strengthening the synergies and coordinations among its projects. Simultaneously, significant progress has been made in advancing the transformation and upgrading of the port segment towards a modernized ports characterized by green, intelligent, efficient and safe operations through the application of modern technologies.

During the first half of 2024, the revenue from the port and related service businesses increased by 21% as compared to the corresponding period of the previous year to approximately HK$1,602 million, primarily benefiting from the growth of port supply chain services. Profit attributable to shareholders decreased by 13% as compared to the corresponding period of the previous year to approximately HK$43.67 million, primarily due to factors such as the intense domestic market competition, the declining gross profit margin in port business and the fact that new projects were still at the incubation stage.

In the second half of 2024, to achieve its long-term goal of spinning off the port segment for listing, the Group will focus on the investment and operations of new projects by refining its business model, amplifying synergies across the segment, and strengthening its core competitiveness. The Group will step up its efforts to promote new projects that have recently commenced operation, such as Phase I of Henan Shenqiu Port and Jiangsu Jingjiang Port with the aim to reach production and achieve operational efficiency, and to enhance the overall productivity while maintaining strict safety control. Following the inspection and acceptance of the construction of the main berth of Phase II of Jiangsu Jingjiang Port, the Group will speed up the completion of the overall construction work and put forward a new phase of operation, which is expected to bring significant growth in its business volume and revenue. Meanwhile, the Group will continue to monitor key regions such as the Greater Bay Area and pursue investment opportunities in a cautious manner.

The Group's toll road business is managed and operated by Shenzhen Expressway, a subsidiary in which the Company holds approximately 52% equity interest and whose H shares and A shares are listed on the Hong Kong Stock Exchange and the Shanghai Stock Exchange, respectively.

In the first half of 2024, revenue and net profit from the toll road business recorded a decline of 10% and 14% to approximately HK$2,633 million and HK$1,065 million, respectively. The decrease was primarily attributed to the impact of several factors, including the adverse weather conditions of heavy rain, snow and freezing temperatures in early 2024, and an increase in the number of free passage days for small passenger vehicles during statutory holidays as compared to the corresponding period of the previous year, as well as results of the project company of Yichang Expressway was no longer consolidated in the financial statements of the Company from 21 March 2024.

Revenue from the general-environmental protection business decreased by 7% as compared to the corresponding period of the previous year to HK$790 million, mainly due to the decrease in the revenue from wind power generation. In addition, the increase in the impairment of assets and the provision for credit impairment losses on accounts receivable as compared to the corresponding period of the previous year resulted in a net loss of HK$157 million in the segment (net profit of HK$21.81 million was recorded for the same period last year).

The Group's intelligent and cold storage warehouses are located at multiple logistics hub projects in cities such as Shenzhen, Shanghai, Shijiazhuang and Chengdu, serving customers such as food, pharmaceuticals, computer, communication and consumer (3C) electronics. As at 30 June 2024, the Group had a total of 181,900 square meters of intelligent and cold storage warehouse space in operation, and approximately 303,100 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. 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 30 June 2024, cold storage warehouses located at Shenzhen Liguang Project, Shanghai Minhang Project, Shijiazhuang Zhengding Project, Chengdu Qingbaijiang Project and Tianjin Xiqing Project, covering an area of approximately 181,900 square meters in aggregate, were put into operation, among which, a total area of approximately 33,400 square meters of cold storage warehouses has undergone intelligent transformation and commenced operations, enhancing customers' storage space utilization rates and inventory turnover efficiency while significantly reducing labor costs.

The Group continues to optimize its short closed-loop “Investment, Construction, Financing and Operation” business model. In June 2024, the Group successfully transferred the equity of Hangzhou Phase I Project and Guizhou Longli Project into ChinaAMC-Shenzhen International REIT, and the Group recorded the profit after tax of approximately HK$587 million. On 9 July 2024, ChinaAMC Shenzhen International REIT was successfully listed on the Shenzhen Stock Exchange with the total fund offering size of RMB1,494 million. The Group has subscribed for 30% of the total units of the ChinaAMC-Shenzhen International REIT. ChinaAMC-Shenzhen International REIT marks the first logistics and warehousing REIT listed on the publicly traded REITs market in the PRC in 2024. Through the issuance of ChinaAMC-Shenzhen International REIT, the Group can effectively revitalize its existing premium logistics park assets, accelerate capital recovery, and enhance its investment capabilities. In addition, the Group is expected to continue benefitting from the performance of these Projects as a unitholder, while also receiving sustainable income by providing operational and management services for these Projects.

To ensure the sustainability of the short closed-loop business model, the Group will continue to adhere to its dual approach of private equity funds and public REITs. On the one hand, it will actively reserve projects for public offerings, while on the other hand, it will continue to study the feasibility and push forward the establishment of new private real estate funds, thereby promoting the securitization of the Group's logistics and warehousing projects.