Annual Report
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2005 - 2015 ANNIVERSARY Stock Code: 03311 OF LISTING IN HKEX EXERCISE CAUTION IN DETAILS AND IMPLEMENTATION BUILD A STRONG FOUNDATION TO SEEK GREATER SUCCESS 2015 Annual Report Vision The Group is dedicated to its core value of “Exercising Caution in Details and Implementation; Building a Strong Foundation to Seek Greater Success”. In strict compliance with the industry standard and dedicating to contribute to the industry, the Group will strive for growth and continuous innovation under China State’s principle of “Good Quality and Value Creation”. With the development of individual staff and strengths of teamwork, the Group will achieve a win-win situation with the shareholders, employees and society and become a new role model in the new era. The Group will insist on developing into a leading corporation with competitive international complex construction and infrastructure investment. CONTENTS 2 Corporate Structure 4 Board of Directors and Committees 5 Corporate Information 6 Financial Highlights 8 Major Events of the Year 2015 14 Chairman’s Statement 24 Management Discussion and Analysis 32 Business Review 50 Awards and Accolades 2015 58 Corporate Citizenship t4UBGG%FWFMPQNFOUBOE1FSTPOBM(SPXUI t&OWJSPONFOUBM1PMJDZ t5IF(SPVQBOE$PNNVOJUZ tInvestor Relation 68 Directors and Organisation 77 $PSQPSBUF(PWFSOBODF3FQPSU 90 Directors’ Report 96 $POOFDUFE5SBOTBDUJPOT 105 Audited Consolidated Financial Statements t*OEFQFOEFOU"VEJUPST3FQPSU t$POTPMJEBUFE*ODPNF4UBUFNFOU t$POTPMJEBUFE4UBUFNFOUPG Comprehensive Income t$POTPMJEBUFE4UBUFNFOUPG'JOBODJBM1PTJUJPO t$POTPMJEBUFE4UBUFNFOUPG$IBOHFTJO&RVJUZ t$POTPMJEBUFE4UBUFNFOUPG$BTI'MPXT t/PUFTUPUIF$POTPMJEBUFE Financial Statements 202 Five Year Financial Summary 204 1BSUJDVMBSTPG*OWFTUNFOU1SPQFSUJFT 2 ChinaChinaa StateState ConstructionConstruction International HoldingsHoldings LimitedLimited AnnualAnnualal ReportReport 220150150 Corporate Structure Corporate Structure (continued) HONG KONG Mechanical and Building Civil Engineering Foundation Other Construction Electrical Construction Works Engineering Works Related Business Engineering Works MACAU Mechanical and Building Civil Engineering Foundation Other Construction Electrical Construction Works Engineering Works Related Business Engineering Works MAINLAND CHINA Annual Report 2015 3 Infrastructure Operation of Construction Other Construction Investment Infrastructure Assets Industrialisation Related Business (BT, BOT & PPP*) d OTHERS Curtain Wall System** * “BT” – “Build-Transfer” * “BOT” – “Build-Operate-Transfer” China State Construction International Holdings Limited Limite * “PPP” – “Public-Private-Partnership” ** Operate through a listed subsidiary, Far East Global Group Limited (Stock Code: 00830). Board of Directors and Committees Board of Directors Committees Executive Directors Audit Committee Zhou Yong (Chairman and Raymond Ho Chung Tai (Chairman) Chief Executive Officer) Adrian David Li Man Kiu Tian Shuchen Raymond Leung Hai Ming Zhou Hancheng Lee Shing See Pan Shujie Hung Cheung Shew Remuneration Committee Wu Mingqing Adrian David Li Man Kiu (Chairman) Raymond Ho Chung Tai Independent Non-executive Directors Raymond Leung Hai Ming Raymond Ho Chung Tai Lee Shing See Adrian David Li Man Kiu Raymond Leung Hai Ming Nomination Committee Lee Shing See Lee Shing See (Chairman) Raymond Ho Chung Tai Adrian David Li Man Kiu Annual Report 2015 Raymond Leung Hai Ming 4 a onstruction Intern C tate S hina China State Construction International Holdings Limited C Corporate Information Authorised Representatives Principal Bankers Zhou Yong Agricultural Bank of China Limited Tian Shuchen Bank of China (Hong Kong) Limited Bank of Communications Co., Ltd. Company Secretary BNP Paribas Hong Kong Branch China Construction Bank Corporation Tse Sui Ha China Development Bank Corporation Hang Seng Bank Limited Principal Share Registrar and The Bank of East Asia, Limited The Hongkong and Shanghai Banking Corporation Transfer Office Limited Royal Bank of Canada Trust Company Wing Lung Bank, Limited (Cayman) Limited 4th Floor, Royal Bank House 24 Shedden Road, George Town Listing Information Grand Cayman KY1-1110 Shares Cayman Islands Hong Kong Stock Exchange: 03311 Hong Kong Branch Share Bond (CSC FIN N1804)* Annual Report 2015 Registrar and Transfer Office Hong Kong Stock Exchange: 05916 5 Tricor Standard Limited * US$500,000,000 3.125% Guaranteed Notes due 2018 issued by Level 22, Hopewell Centre China State Construction Finance (Cayman) I Limited, wholly owned 183 Queen’s Road East subsidiary of the Company Hong Kong Website Registered Office www.csci.com.hk Cricket Square Hutchins Drive Financial Calendar P.O. Box 2681 Closure of Register of Members – Annual General Meeting Grand Cayman KY1-1111 30 May 2016 to 1 June 2016 (both days inclusive) Cayman Islands Annual General Meeting Head Office and Principal 1 June 2016 Place of Business in Hong Kong Closure of Register of Members – Final Dividend China State Construction International Holdings Limited 28th Floor, China Overseas Building 10 June 2016 139 Hennessy Road, Wanchai Hong Kong Payment of Proposed Final Dividend 4 July 2016 Auditor PricewaterhouseCoopers Legal Advisor Mayer Brown JSM Financial Highlights For the year ended 31 December (Note a) 2011 2012 2013 2014 2015 (restated) (restated) (restated) RESULTS (HK$’000) Revenue 17,510,533 22,059,910 27,285,620 34,439,575 37,913,159 EBITDA (Note b) 2,236,635 2,994,662 3,897,458 4,823,804 5,704,248 Profit attributable to owners of the Company 1,514,514 2,044,337 2,749,551 3,457,410 4,153,072 FINANCIAL RATIOS Net margin (%) 8.6 9.3 10.1 10.0 11.0 Current ratio (times) 1.20 1.56 1.28 1.10 1.05 FINANCIAL INFORMATION PER SHARE Earnings (HK cents) 44.43 54.98 70.71 88.75 103.16 Dividend (HK cents) 13.00 16.00 21.00 26.00 33.00 Net assets (HK$) 2.65 3.45 4.10 4.94 5.24 ual Report 2015 Annual Report 2015 Ann OTHER INFORMATION Value of incomplete contracts 6 at 31 December (HK$ billion) 48.92 57.69 76.48 93.10 127.06 d Notes: (a) The figures from 2011 to 2013 have been restated for the acquisition of China Overseas Ports Investment Company Limited in 2014. (b) EBITDA represents Profit before Tax, Finance costs, Depreciation and Amortisation charged to the Income Statement during the year. na State Construction International Holdings Limite China State Construction International Holdings Limited Chi Financial Highlights (continued) Results Financial Information Per Share Profit Attributable to Owners of the Company Revenue (HK$’000) (HK$’000) (HK cents) 4,500,000 40,000,000 120 3,750,000 100 32,000,000 3,000,000 80 24,000,000 2,250,000 60 16,000,000 1,500,000 40 Annual Report 2015 8,000,000 750,000 20 7 0 0 0 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Profit Attributable to Owners of the Dividend Company Earnings Revenue Breakdown of Segment Revenue Breakdown of Segment Results* for the year ended 31 December 2015 for the year ended 31 December 2015 Far East Global Far East Global 4.7% Macau 0.4% Macau Hong Kong China State Construction International Holdings Limited Hong Kong 14.3% 14.0% 42.7% 16.3% Mainland China Mainland China 38.6% 69.0% * Excluding loss of Overseas Segment Major Events of the Year 2015 Staff of the Group joined the “Walks for Millions” by Community Chest JAN Nearly 200 staff of the Group and their families joined “Hong Kong and Kowloon Walks for Millions” organised by the Community Chest on 11 January 2015. Fund raised from this event was donated by the Community Chest to “Family and Child Welfare Services” to help those families in need, so as to unite all families by building up close relationships between family members with mutual love and respect. Annual Report 2015 8 Strategic Cooperation Agreement signed between the Group and China Construction Fifth Engineering Division FEB On 6 February 2015, the signing ceremony of Strategic Cooperation Agreement between the Group and China Construction Fifth Engineering Division Co., Ltd. was held in China o State International Tower (深圳中建國際 大廈) in Shenzhen. Both parties hoped that the newly China State Construction International Holdings Limited C signed strategic agreement could promote two parties to launch further cooperation, and could complement each other’s edges for mutual benefits. Major Events of the Year 2015 (continued) Breakthrough ceremony of the drill and blast section of the Scenic Hill Tunnel of Hong Kong-Zhuhai-Macao Bridge Hong Kong Link Road MAR Project was successfully held In the morning on 30 March 2015, the breakthrough ceremony of the drill and blast section of the Scenic Hill Tunnel of Hong Kong-Zhuhai-Macao Bridge Hong Kong Link Road Project was successfully held. More than 200 guests attended the ceremony including Mr. Lau Ka-Keung, Director of Highways of HKSAR; Dr Daman Lee, director of Ove Arup & Partners Hong Kong Ltd; Mr. Zhou Yong, Chairman and Chief Executive Officer of the Company Limited; Mr. Pan Shujie, Vice President of the Company. Annual Report 2015 9 Mr. Zhou paid a business visit to Hunan Province and met with the relevant leaders APR From 27 April to 28 April 2015, the delegation led by Mr. Zhou Yong, Chairman and Chief Executive Officer of the Company paid a business visit to Hunan Province. During the visit, the delegation visited the relevant leaders and responsible persons of relevant departments and township in Hunan Province and had a cooperation meeting with the leaders of China Construction Fifth Engineering Division to discuss the Huanghua Comprehensive Bonded Zone Project in Changsha. China State Construction International Holdings Limited Major Events of the Year 2015 (continued) The Group received several awards in the “21st Considerate Contractors Site Award Scheme” MAY The “21st Considerate Contractors Site Award Scheme” jointly organised by the Development Bureau of the HKSAR government and the Construction Industry Council was held at Kowloon Bay International Trade and Exhibition Centre on 29 May 2015. Attributable to its continuous outstanding performance in site safety and environmental protection, the Group was awarded Considerate Contractors Site Award (Merit Award) and Outstanding Environmental Management and Performance Award (Bronze Annual Report 2015 Award) in the category of Public Works – New Works.