2019 Annual Report
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2019 Annual Report With Fortitude, We Aspire Transport International Holdings Limited With Fortitude, We Aspire Operating the largest franchised bus company in Hong Kong, our mission is founded on professionalism and the provision of uncompromising and safe public transport services to the public around the clock. The Group has borne difficult circumstances with fortitude as it seeks to move forward with Hong Kong, adhering to the principle of people-orientated service while introducing various discount schemes, including the KMB Fare Saver Scheme and Bus-Bus Interchange packages. Our commitment to corporate social responsibility is evidenced by our care for passengers, employees, society and the natural environment. Transport International Holdings Limited 2019 Annual Report 001 Contents Group Profile 002 Business at a Glance 004 Key Franchised Bus Network in Hong Kong 006 Financial and Operational Highlights 008 Corporate Milestones 2019 010 Chairman’s Letter 012 Managing Director’s Message 016 Management Discussion and Analysis 018 Business Review • Hong Kong Franchised Public Bus Operations 020 • Hong Kong Non-franchised Transport Operations 030 • China Mainland Transport Operations 034 • Property Holdings and Development 036 Sustainability Report • Safety First 044 • Care for Customers 050 • Care for the Environment 054 • Care for Employees 060 • Engaging Stakeholders 068 Financial Review 080 Corporate Governance Report 094 Remuneration Report 112 Directors’ Profiles 116 Key Corporate Executives 123 Financial Reports 124 Financial Summary 236 Corporate Directory 237 Hong Kong Franchised Hong Kong Non-franchised China Mainland Property Holdings Public Bus Operations Transport Operations Transport Operations and Development Transport International Holdings Limited 002 2019 Annual Report Group Profile Transport International Holdings Limited 2019 Annual Report 003 Group Profile Transport International Transport International Holdings Limited (“TIH”, Stock Code: 62), a leading public transport operator in Hong Kong and China Mainland, is the holding company of The Kowloon Motor Bus Company (1933) Limited, Long Win Bus Company Limited, and a number of non-franchised transport providers. The Company also has business interests in property holdings and development in Hong Kong. TIH aims to set the highest standards in the public transport industry through the provision of innovative and high quality services that take our customers safely and comfortably to their destination. With a dedication to sustainable business practices, enhanced shareholder value and the social and economic development of Greater China, TIH achieves its vision by tailoring its services to meet customer needs, improving the connectivity of its routes and providing real-time bus service information. Vision Mission Values Our vision to be a global leader in Our mission to enhance shareholder Our corporate values are centred our field is based on a thorough value while contributing to the on the delivery of service standards understanding of the needs of the social and economic development of that meet or exceed customer needs, people we serve, the introduction Greater China can be summarised as a consistent record of operational of innovative technological and follows: profitability, and support for the environmental solutions, and the communities we serve. attainment of new standards for D istinctive customer service safety, service and efficiency. R eliable performance I nnovation V alue for money E nvironmental responsibility S ustainable business practice Through engagement with our stakeholders, we aim to meet or exceed their expectations through the provision of high quality services and solutions. Transport International Holdings Limited 004 2019 Annual Report Business at a Glance Transport International Holdings Limited Hong Kong Franchised Public Bus Operations The Kowloon Motor Bus Company (1933) Limited Long Win Bus Company Limited the Group’s flagship company, operates franchised operates franchised public bus services with 279 buses public bus services with a fleet of about 4,100 buses operating on 36 routes linking the New Territories with operating on 411 routes covering Kowloon, the New Hong Kong International Airport, the Hong Kong Port Territories and Hong Kong Island. of the Hong Kong-Zhuhai-Macao Bridge and North Lantau. Hong Kong Non-Franchised Transport Operations Sun Bus Holdings Limited and its subsidiaries New Hong Kong Bus Company Limited with Sun Bus Limited as the flagship company, operate jointly operates with its Shenzhen counterpart the 24- 390 buses offering a variety of non-franchised bus hour cross-boundary shuttle bus service (or “Huang services to the residential and commercial sectors Bus” service) between Lok Ma Chau in Hong Kong through chartered hire services. and Huanggang in Shenzhen. Transport International Holdings Limited 2019 Annual Report 005 Business at a Glance China Mainland Transport Operations Shenzhen Bus Group Company Limited Beijing Beiqi Kowloon Taxi Company Limited is a Sino-foreign joint stock company providing public is a Sino-foreign joint stock company operating taxi bus and taxi hire services in Shenzhen. services in Beijing. Beijing Beiqi First Company Limited is a Sino-foreign joint stock company offering car rental services in Beijing. Property Holdings and Development LCK Real Estate Limited TM Properties Investment Limited owns a 17-storey commercial building at 9 Po Lun owns an industrial property at 1 Kin Fung Circuit, Tuen Street, Lai Chi Kok, Kowloon, Hong Kong, with a total Mun, New Territories, Hong Kong, consisting of a gross floor area of 156,700 square feet. single-storey high ceiling structure and a three-storey workshop building with a total gross floor area of LCK Commercial Properties Limited 105,900 square feet. owns the Manhattan Mid-town shopping mall, which is a two-level retail podium covering around 50,000 KT Real Estate Limited square feet at 1 Po Lun Street, Lai Chi Kok, Kowloon, owns a 50% interest in the site at Kwun Tong Inland Hong Kong. Lot No. 240 at 98 How Ming Street, Kwun Tong, Kowloon, Hong Kong. Transport International Holdings Limited 006 2019 Annual Report Key Franchised Bus Network in Hong Kong China Mainland 78K Popular routes of The Kowloon Motor Bus Company (1933) Limited Huanggang Popular routes of Long Win Bus Company Limited B1 Group headquarters Lok Ma Chau Sheung Shui Railways 78K 673 Hong Kong International Airport 276A 277X High Speed Rail Hong Kong West Kowloon Station A43 Fanling Hong Kong Port of the Hong Kong-Zhuhai-Macao Bridge 276A Yuen Long Tai Po 269D 73X A36 64K B1 968 64K A47X 74X 68X A33X New Territories 89D 960 Tuen Mun 58M 263 269D Sha Tin 48X Tsuen Wan A33 A41 290 33 A31 263 E31 48X 73X 58M Kwai E32A Kowloon Fong 6C Wong Tai Sin 108 Tsing Yi 613 Sham A33 A31 A36 Shui Po 6C 1A 68X A43 A33X A41 Yau Tsim Kwun Tong Mong Kowloon City 290 A47X 603 33 74X 277X E32A 1A 89D 603 108 Lantau Island 673 North Point Tung Chung 968 613 Central & E31 Western 960 Wan Chai Hong Kong Island Transport International Holdings Limited 2019 Annual Report 007 Key Franchised Bus Network in Hong Kong China Mainland 78K Huanggang B1 Lok Ma Chau Sheung Shui 78K 673 276A 277X A43 Fanling 276A Yuen Long Tai Po 269D 73X A36 64K B1 968 64K A47X 74X 68X A33X New Territories 89D 960 Tuen Mun 58M 263 269D Sha Tin 48X Tsuen Wan A33 A41 290 33 A31 263 E31 48X 73X 58M Kwai E32A Kowloon Fong 6C Wong Tai Sin 108 Tsing Yi 613 Sham A33 A31 A36 Shui Po 6C 1A 68X A43 A33X A41 Yau Tsim Kwun Tong Mong Kowloon City 290 A47X 603 33 74X 277X E32A 1A 89D 603 108 Lantau Island 673 North Point Tung Chung 968 613 Central & E31 Western 960 Wan Chai Hong Kong Island Transport International Holdings Limited 008 2019 Annual Report Financial and Operational Highlights For the Year Ended 31 December 2019 Increase/ Unit 2019 2018 (Decrease) Financial Highlights Revenue HK$ million 8,112.2 8,009.3 1% – Fare revenue HK$ million 7,818.9 7,729.0 1% – Media sales revenue HK$ million 226.3 210.5 8% – Gross rentals from investment property HK$ million 67.0 69.8 (4%) Profit attributable to equity shareholders of the Company HK$ million 605.3 720.1 (16%) Earnings per share HK$ 1.38 1.68 (18%) Ordinary dividends per share HK$ 1.00 1.20 (17%) Total equity attributable to equity shareholders of the Company HK$ million 10,971.7 10,195.6 8% Total assets HK$ million 16,712.5 15,410.0 8% Net borrowings HK$ million 1,250.7 1,444.0 (13%) Net finance income HK$ million 55.2 57.9 (5%) Cash generated from operations HK$ million 1,378.3 1,709.4 (19%) Key Financial Ratios Profit margin 7.5% 9.0% (17%) EBITDA margin 20.9% 22.1% (5%) Return on equity attributable to equity shareholders of the Company 5.5% 7.1% (22%) Gearing ratio Times 0.1 0.1 (20%) (ratio of net borrowings to total equity attributable to equity shareholders of the Company) Total borrowings/EBITDA 1.6 1.5 7% Current ratio 1.9 1.6 17% Dividend cover Times 1.4 1.4 (2%) (ratio of profit attributable to equity shareholders of the Company to total dividends paid and proposed for the year) Share price per share at year-end HK$ 20.20 21.60 (6%) Market capitalisation at year-end HK$ million 9,028.20 9,387.30 (4%) Operational Highlights Hong Kong Franchised Public Bus Operations: Average number of passenger trips per day Million trips 2.93 2.91 1% Number of licensed buses at year-end 4,360 4,374 (0%) Number of staff at year-end 12,907 12,257 5% Average number of staff per licensed bus at year-end 2.96 2.80 6% Hong Kong Non-franchised Transport Operations: