Shenzhen Expressway: Strategically focusing on core businesses, improving quality and efficiency to promote transformation

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At the Shenzhen Expressway 2025 annual results briefing held recently, in response to questions from investors regarding performance fluctuations and the benefits of the company’s large-scale environmental protection business, the company’s management adopted a candid and pragmatic approach, systematically outlined the company’s overall development direction for the future, and conveyed clear and firm confidence to the market.

Return to fundamentals: the core position of the toll highway business is further strengthened

As the company’s “keystone,” its toll highway business demonstrated strong resilience in 2025. After excluding the impact of the disposal of Yi Chang Expressway on the reporting scope, under the same basis, toll revenue increased year over year by approximately 3.2%, and the operating performance of its core route assets remained steady. The management clearly stated that, going forward, the company will further concentrate resources on its core main business, and will fully push forward the construction of new-build and expansion projects such as Jihe Expansion and Phase III of the Outer Ring. The advancement of these projects will not only effectively smooth out future revenue fluctuations caused by the sequential expiration of revenue associated with existing route assets, but will also consolidate and enhance the company’s position in the core road network of the Guangdong–Hong Kong–Macao Greater Bay Area.

In terms of investment strategy, the company will take a more prudent approach to capturing opportunities to invest in and acquire new projects, and will promote a shift to an inward, quality-focused development model characterized by “optimizing incremental growth and improving the quality of existing holdings,” comprehensively enhancing the level of integrated returns on assets.

Adapt to the times: the large-scale environmental protection business focuses on quality improvement and efficiency gains

The clean energy power generation business can provide stable generation revenues and operating profits for the company every year. During the year, the company continuously strengthened refined operational management of its existing wind power projects, improving their generation benefits; in addition, it will make full use of resources along expressways to explore an integrated development model of “transportation + clean energy,” and promote efficient and compound utilization of resources within the road corridor.

For the food and kitchen waste treatment business, the company’s focus has fully shifted to improving the quality and efficiency of existing projects. Through a series of measures—including optimizing the collection and transportation model, expanding oil and fat sales channels, and promoting technological and process upgrades—the company has steadily improved project operating performance. In 2025, this business segment showed a favorable trend of “revenue up and costs down,” driving an overall increase in operating profit and gradually improving profitability.

Do better and become stronger: resource allocation is more focused

“The company will closely follow the national and provincial/municipal ‘Fifteenth Five-Year Plan’ and industry trends, consolidate and enhance the toll highway main business, seize the momentum to optimize and strengthen the clean energy industry, improve the quality and efficiency of the solid waste treatment business to achieve solid results, accelerate the development of strategic emerging industries, and actively implement the national strategy of building a transport power and the goals of green and low-carbon transition.” These words from Mr. Xu Enli, Chairman of Shenzhen Expressway, clearly outline the logic behind the company’s future resource allocation: resources will be concentrated on businesses with advantages, and will be tilted toward core areas capable of generating long-term returns.

In 2025, the company will comprehensively strengthen its asset base, which is beneficial for enhancing the company’s core competitiveness and resilience to risks. While it will inevitably bring short-term financial pressure, the company believes it will lay a solid foundation for steady and long-term progress, making the company’s development roots more stable and its development momentum even stronger.

Conclusion: In 2025, Shenzhen Expressway went through a phase of performance lows, and it also completed a clear delineation of its strategic direction. Looking ahead, as the toll highway main business continues to gain momentum, major expansion and reconstruction projects are steadily advanced, and the results of quality improvement and efficiency-gain initiatives in the large environmental protection business gradually become visible, Shenzhen Expressway—with a more focused strategy, healthier assets, and a more sustainable development path—deserves more patience and confidence from the market.

(This article does not constitute any investment advice. For information disclosure, please refer to the company announcements. Investors act on this at their own risk.)

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