Annual Report 2023

ANNUAL REPORT 2023 15 Regarding overseas business, in the face of the complex and volatile international economic and trade situation, the Group actively seized investment opportunities. In April 2023, the Group entered into a shareholders agreement with Access Engineering PLC and the Sri Lanka Ports Authority in relation to the establishment and governance of the South Asia Commercial and Logistics Hub Project. The project is a harborside multi-storey warehouse and logistics project using the “Build-Operate-Transfer (BOT)” model with a total investment of US$392 million (equivalent to approximately HK$3,077 million). It will carry out import and export devanning and packing, bonded warehouse storage, free port business, warehouse leasing and port trade logistics. The project will not only significantly improve the level of local logistics services, but also attract more business and throughput for overseas homebase ports, further enhancing CICT’s position as a hub port in South Asia. In Southeast Asia, the Group entered into an acquisition agreement in November 2023 to acquire 51% equity interest in NPH in Indonesia at a consideration of approximately US$61.20 million (equivalent to approximately HK$478 million) and will become its controlling shareholder. NPH is a company listed on the Indonesia Stock Exchange. It operates two container terminals in Jakarta and provides container, multi-purpose and general terminal services, as well as port equipment engineering services. The acquisition will be conducive to the Group’s important breakthroughs in its presence in Southeast Asia and will allow it to fully leverage its local partners to tap into the Indonesian market. In pursuit of comprehensive development, the Group’s domestic industrial parks have been working at full force, and overseas industrial parks achieved progress under adverse circumstance. China Merchants Bonded Logistics Co., Ltd. (“ CMBL ”) realized the effective utilization of additional warehouse resources, and the utilization rate of warehouses exceeded 95%. The new energy vehicle export service platform achieved relatively good results. The bonded logistics operation of China Merchants International Terminal (Qingdao) Co., Ltd. (“ CMITQ ”) remained stable. Its self-operated business was diversified, while the volume from warehousing operations doubled year-on-year. HIPG industrial zone deeply explored the market, and the quality of customers has been greatly improved. In 2023, 12 contracted customers moved into the park, and 51 enterprises have signed up to do so. The number of contracted enterprises in the Djibouti International Free Trade Zone reached 351, with a storage utilization rate of 100% and a warehouse occupancy rate of over 96%. In respect of innovative development, the Group continued to revise and improve its digital planning in accordance with industry development requirements and technology development trends. By promoting the construction of three major platforms, namely “CMCore”, “CM ePort” and SMP, as well as a port Internet of Things base, a digital governance system and an establishment of information security protection network, the Group set to improve the relevant implementation plans, enhance the industrial digitalization standard, and keep on advancing the construction of smart ports. CTOS project achieved significant results, while “CM ePort” achieved full coverage of the controlled port area in Mainland China and provided customers with one-stop smart services. In respect of SMP, the Group completed the construction of data architecture, business process platform, data index platform and global monitoring center, which were fully applied to enterprise process management and operation analysis to support management decisions. Regarding capital operation, the Group explored rooms for profit improvement of its existing assets in an all-round way from three working principles of “asset operation, endogenous growth”, “capital operation, optimization of the structure of existing assets” and “value mining of existing assets”. It explored short-term, medium-term and long-term measures and goals to advance cost reduction and efficiency improvement. The proceeds from the disposal of 45% equity interest in Ningbo Daxie China Merchants International Terminals Co., Ltd. (“ Ningbo Daxie ”) by the Group at a consideration of RMB1,845 million (equivalent to approximately HK$2,021 million) were used as general working capital. As a result, the resources utilization was effectively optimized and the Group’s development potential was enhanced.