Annual Report 2019

Management Discussion and Analysis 20 CHINA MERCHANTS PORT HOLDINGS COMPANY LIMITED scope of data exchange on the “PRD NETWORK” platform further expanded. Benefitted from the reforms of customs clearance, the time needed for the customs clearance of import laden containers was shortened while the working hour of the automatic check for customs transit of import and export containers was extended, which enhanced the efficiency of customs clearance in the West Shenzhen Port Zone. Besides, the Group pushed forward the construction of Haixing Intelligent Port project and strengthened innovative applications to develop an “intelligent port cluster”. In the overseas homebase ports, the Group was committed to developing South Asia’s regional leading ports and regional hub for international shipping in Sri Lanka, as well as establishing a South Asian port network centred on Sri Lanka. CICT played an active role in cultivating expat talents and formulating management systems. As a successful project of overseas operations, CICT accelerated the output of experience in overseas project management. Hambantota Port enhanced its comprehensive service capability, by carrying out the cooperation with shipping companies as planned for developing container terminal business with an aim to become a container hub port in South Asia, and successfully inducting an oil refining enterprise, well- positioned to become the vessel refuelling hub in South Asia. It also strengthened the collaborated development with CICT and launched logistics solutions for hinterland containers. As for overseas expansion, by seizing the opportunities arising from China’s significant Belt and Road Initiative and the international industries migration, the Group has proactively grasped the investment opportunities in ports, logistics and related infrastructure. During the year, based on identifying Southeast Asian and South Asian gateway ports as key investment targets, the Group actively pushed ahead the proposed investment project through Terminal Link to acquire up to 10 quality terminals under CMA CGM SA in Southeast Asia, South Asia, Europe and Caribbean Sea, etc., and initial closing of eight out of the 10 terminals took place on 26 March 2020, which will further complement the Group’s global port network and hence enhance its core competitiveness and influence. In respect of comprehensive development, the Group actively explored and promoted the “Port-Park-City” comprehensive development model and achieved staged progress. The Group has completed the revision on the overall planning for the future development of the Hambantota Port in Sri Lanka, clarifying the business development direction of the port zone. The one-stop service centre for induction of business and investment officially commenced operation with various tasks carried out steadily. Djibouti International Free Trade Zone was officially put into operation in early 2019 and recorded solid growth in business volume with promising momentum for expansion. As at the year-end, 78 enterprises were registered in the zone. Besides, the Group completed the transaction in relation to the land interest in Qianhai- Shekou Free Trade Zone in Shenzhen during the year. With regard to innovative development, the Group pushed forward the “digitalisation strategy” by formulating and implementing the informationisation plans with a clear focus on developing “digital CMPort”. Based on the application of “E-Port” of the West Shenzhen Port Zone, the Group further promoted the establishment of “CM ePort”, an e-commerce platform for port and shipping industry in its subsidiary terminals. Haixing Intelligent Port project and the automatic loading and unloading project at Zhanjiang Port’s bulk terminals to handle commodities were well underway. The West Shenzhen Port Zone issued the first B2B blockchain electronic invoice in China’s port industry and launched the pilot program of its self-developed blockchain depository receipts of electronic delivery order and equipment interchange receipt on domestic container business. The Group led 11 enterprises to initiate and establish the “5G Intelligent Port Innovation Laboratory”, and realised the first RTG remote control operation under 5G network at Mawan Container Terminal, which optimised and enhanced the informationisation level of its ports comprehensively. The Company officially established the “Research Institute of CMPort for Technological Innovation and Development”, which marked the establishment of a technology-empowered platform for industry development. An industrial fund, which focuses on investment in innovation and development for ports, will be launched in the near term, which, centring on the development of a port ecosystem in the future, intends to invest in start-ups to facilitate the collaboration of resources between port groups and industries with the help from the financial platform. Leveraging on the opportunities arising from the rapid growth of emerging industries, the Group will be able to promote the transformation and upgrade of the port industry, enlarge rooms for development, and improve quality of development, bringing new vitality into the traditional core port operation.