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HK Bourse: Announcement From Xiamen International Port Co. Ltd. -9-

28 Aug 2017 12:24 am
 
 
 
                                                19 
Liquidity, Financial Resources and Capital Structure 
 
The Group mainly utilized its cash for investments, operating costs, construction of terminals 
and berths and repayment of loans. As at 30 June 2017, the balance of the Group's cash and cash 
equivalents amounted to approximately RMB739,100,000 (as at 31 December 2016: approximately 
RMB1,140,956,000 (restated)). The decrease was mainly due to Xiamen Port Development's 
payment of consideration for combination of Shihushan Terminal and acquisition of Xinhaida 
Terminal. 
 
Borrowings of the Group increased by approximately 44.49% from approximately RMB3,540,967,000 
(restated) as at 31 December 2016 to approximately RMB5,116,249,000 as at 30 June 2017. 
The increase in borrowings is mostly for the consideration payment of Xinhaida Terminal and 
Shihushan Terminal. In addition, the balance of borrowings of Xinhaida Terminal amounting to 
RMB1,042,300,000 was incorporated in the Group's consolidated balance sheet ended 30 June 
2017. 
 
As at 30 June 2017, the guaranteed bank borrowings of the Group was approximately 
RMB189,814,000, which are guaranteed by state-owned banks (as at 31 December 2016: 
RMB149,532,000 (restated)). 
 
Gearing Ratio 
 
The gearing ratio is calculated as net debt divided by total capital. Net debt is calculated as 
total borrowings (including "current and non-current borrowings" as shown in the condensed 
consolidated interim balance sheet) less cash and cash equivalents. Total capital is calculated as 
"equity" (as shown in the condensed consolidated interim balance sheet) plus net debt. 
 
The gearing ratios as at 30 June 2017 and 31 December 2016 were as follows: 
 
                                                                    Unaudited          Audited 
                                                                      30 June      31 December 
                                                                         2017             2016 
                                                                     RMB'000          RMB'000 
 
                                                                     5,116,249 
Total borrowings                                                                       3,540,967 
                                                                      (739,100) 
Less: cash and cash equivalents                                                       (1,140,956) 
 
                                                                     4,377,149 
Net debt                                                                               2,400,011 
                                                                    11,403,681 
Total equity                                                                          10,311,973 
 
                                                                   15,780,830 
Total capital                                                                         12,711,984 
 
                                                                       27.74% 
Gearing ratio (%)                                                                        18.88% 
 
As at 30 June 2017, the Group had a net debt position. 
 
 
                                                20 
Other Financial Information 
 
As at 30 June 2017, the available-for-sale financial assets of the Group increased from 
approximately RMB412,417,000 as at 31 December 2016 to approximately RMB563,161,000, the 
increase was mainly because the Group has subscribed certain new wealth management products 
amounting to an aggregate of RMB150,000,000 during this reporting period. 
 
Capital Expenditure Commitments 
 
As at 30 June 2017, the Group's capital expenditure commitments amounted to approximately 
RMB405,380,000, primarily consisting of expenditure for constructing and upgrading port and 
storage infrastructure, acquisition of new loading machinery and other machineries and building 
renovation. 
 
Exchange Rate and Interest Rate Risk 
 
The Group's bank borrowings are denominated in RMB, Hong Kong dollars and US dollars. To 
the extent that RMB appreciates (or depreciates) against Hong Kong dollars and US dollars, the 
value of bank borrowings and repayment cost of such borrowings will decrease (or increase) 
correspondingly. In addition, since only a minor part of the business revenue of the Group is settled 
in foreign currencies, the fluctuation in RMB exchange rate has no material impact on the business 
operations of the Group. The Board believes that the appreciation of RMB had no material impact 
on the operating results and financial position of the Group as at 30 June 2017. The Group has not 
used any means to hedge its foreign currency exposure currently, nevertheless, the foreign currency 
 
exposure is still monitored by the Board, who will consider hedging any significant foreign 
currency exposure should the need arise. 
 
Contingent Liabilities 
 
As at 30 June 2017, the Group had no significant contingent liabilities. 
 
EMPLOYEES 
 
As at 30 June 2017, the Group had a total of 7,309 employees, representing an increase of 252 
employees as compared to 31 December 2016, the main reason for the increase is that Xinhaida 
Terminal was accounted for as a subsidiary of the Group in the first half of this year (for details, 
please refer to the section titled "OTHER MAJOR EVENTS" of this announcement), and the 
number of its employees was calculated into that of the Group correspondingly. Employees' 
remuneration package of the Group is determined by their positions, performance, qualifications 
and the prevailing industry practices. Employees may be granted with bonus and awards depending 
on the annual results of operations and the assessment of their performance. In addition, the grant 
of awards is an impetus to motivate each employee, while the enterprise annuity will enhance the 
pension insurance treatment of the employees after retirement. Employees are also entitled to public 
holidays and other holidays as stipulated by the relevant regulations. 
 
 
 
 
                                                 21 
ESTABLISHMENT OF NEW COMPANIES 
 
On 25 May 2017, Xiamen Port Trading Co., Ltd. (  ) ("Xiamen Port 
Trading"), a subsidiary of the Company, invested to establish Xiamen Port Haiheng (Hongkong) 
Limited (  (  )  ) ("Haiheng (Hongkong)") in Hong Kong, which is 
principally engaged in the import and export and transshipment of cargos and technologies, trade 
services, etc. The registered capital of Haiheng (Hongkong) is HK$3.0 million, which is wholly 
owned by Xiamen Port Trading, and the relevant registration procedures have been completed. 
 
On 15 June 2017, China Xiamen Foreign Shipping Agency Co., Ltd. ( 
 )("Xiamen Foreign Shipping Agency") and Xiamen Port Transport Co., Ltd. ( 
 )("Xiamen Port Transport"), both subsidiaries of the Company, and Xiamen Port 
Financial Holding Co., Ltd. (  )("Xiamen Port Financial Holding"), 
a subsidiary of Xiamen Port Holding, a controlling shareholder of the Company, jointly injected 
funds to establish Xiamen Port Hairongtong Supply Chain Management Company Limited ( 
 ) ("Hairongtong") in Xiamen, Fujian Province, which is principally 
engaged in the supply chain management, investment and investment management and consultancy, 
asset management, enterprise management consultancy, financial information service, business 
information consultancy, automotive retail. The registered capital of Hairongtong is RMB7,000,000, 
which is held as to 10% by Xiamen Foreign Shipping Agency, 15% by Xiamen Port Transport and 
75% by Xiamen Port Financial Holding, and the relevant industrial and commercial registration 
procedures have been completed. 
 
On 16 June 2017, Ji'an Port Development Co., Ltd. (  ) ("Ji'an Port"), 
a subsidiary of the Company, invested to establish Ji'an Port Nankang Branch ( 
 ) in Nankang District, Ganzhou, Jiangxi Province, which is principally engaged in the 
wholesale, retail and online trade agency of health food, prepackaged food and unpacked food, 
dairy products, agricultural and poultry products, daily necessities, knitwear and textile products, 
stationery and sporting goods, hardware and electrical appliances, clothing, footwear and headwear 
and communication equipment. The relevant industrial and commercial registration procedures have 
been completed. 
 
OTHER MAJOR EVENTS 
 
On 13 February 2017, Xiamen Terminal Group completed the acquisition of the 20% equity 
interests held by Initial Sun Limited (  ) in Xinhaida Terminal, whereby Xiamen 
Terminal Group and Trend Wood, a wholly-owned subsidiary of Xiamen Terminal Group, and 
therefore now held a total of 66% equity interests in Xinhaida Terminal. In view of the completion 
of the aforesaid acquisition of equity interests and the amendments synchronously made to the 
articles of association of Xinhaida Terminal, Xinhaida Terminal shall be accounted for as a 
subsidiary of the Group upon completion of the said acquisition. For details, please refer to the 
announcements of the Company dated 16 December 2016 and 13 February 2017, respectively. 
 
On 24 March 2017, Zhangzhou Gulei Port Development Company Limited ( 
 ) ("Gulei Port Development"), an indirect subsidiary of the Company, entered into a 
construction contract with CCCC Third Navigational Engineering Bureau Co., Ltd. ( 
 ) as contractor in relation to the construction of berths No. 1 and No. 2 in the 
north of Gulei work zone in Gulei port area, Zhangzhou, Fujian Province at a total of consideration 
of RMB637,530,000. The construction period of the above construction works is expected to be 
 
 
 
 
 

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