Dida Inc. — Interim / Quarterly Report 2004

Apr 23, 2004

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

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CHINA SHIPPING DEVELOPMENT COMPANY LIMITED

(a joint stock limited company incorporated in the People’s Republic of China with limited liability)

(Stock Code: 1138)

First Quarterly Report of 2004

IMPORTANT NOTICE

This quarterly report has been prepared in accordance with the regulations on Disclosure of Information in Quarterly Reports for Listed Companies issued by the China Securities Regulatory Commission. This report is published simultaneously in Shanghai and Hong Kong of the People’s Republic of China (the “ PRC ”). All financial information set out in the first quarterly report is unaudited and prepared in accordance with the PRC Accounting Standards.

The board (the “ Board ”) of directors (the “ Directors ”) of China Shipping Development Company Limited (the “ Company ”, together with its subsidiaries, the “ Group ”) confirms that there is no false representation or misleading statements which are contained in or material omissions from this announcement. The Directors jointly and severally accept responsibility for the truthfulness, accuracy and completeness of the contents of this announcement.

Mr. Li Shaode, chairman, Mr. Wang Kangtian, chief financial officer, and Ms. Song Aiwu, manager of the financial department have declared that they guarantee the truthfulness, accuracy and completeness of the financial statements contained in this announcement.

This announcement is made pursuant to Rule 13.09(2) of The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

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1. PARTICULARS OF THE COMPANY

1.1 Basic information

Stock abbreviation Stock code 600026 (A share) 1138 (H shares) Name Company Secretary Securities Affairs Representative Yao Qiaohong Tong Yan Contact address Room 1601, 700 Dong Da Ming Road, Shanghai, the PRC Telephone Number 021-65967160 021-65967165 Fax number 021-65966160 021-65966160 E-mail address yqh@cnshipping.com tongyan@cnshipping.com

• 1.2 Financial information

1.2.1 Principal financial data and statistics highlights

	As at 31		As at 31	Increase/
	March 2004	December 2003		Decrease
	(RMB)		(RMB)	(%)
Items
Total assets	10,055,821,063.34	9,584,546,006.12		4.92
Shareholders’ Equity
(excluding minority interests)	7,542,912,277.90	7,131,157,692.26		5.77
Net assets per share	2.27		2.14	6.07
Adjusted net assets per share	2.25		2.13	5.63
			Increase/Decrease
	**For the three **	months	**as compared **	with the
	ended 31 March 2004		same period of 2003
		(RMB)		(%)
Net cash flow from operating
activities	393,589,114.99			1,237.07
Earnings per share		0.1238		133.58
Rate of returns on net assets (%)		5.46		95.70
Rate of returns on net assets after
exceptional items (%)		5.66		103.60
				(RMB)
Exceptional items
Non-operating income				—
Non-operating expenses			18,019,683.34
Subsidy income				—
Tax			2,702,952.50
Total			-15,316,730.84

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1.2.2 Profit and loss account

	For the three months ended	For the three months ended	For the three months ended	For the three months ended
	31 March 2004		31 March 2003
Items	Company	Group	Company	Group
	(RMB)	(RMB)	(RMB)	(RMB)
1. Revenue from major operating
activities	1,455,376,886.84 1,517,315,104.83		1,130,520,207.09 1,167,530,079.79
Less: sales allowance and
discounts	—	—
Net revenue from major operating
activities	1,455,376,886.84 1,517,315,104.83		1,130,520,207.09 1,167,530,079.79
Less: major operating costs	877,085,718.61	923,127,018.06	831,585,571.85	866,122,064.00
Tax and levies on major operating
activities	33,234,451.82	34,898,946.84	26,101,617.54	27,322,943.35
2. Profit from major operating
activities	545,056,716.41	559,289,139.93	272,833,017.70	274,085,072.44
Add: Other operating profits	2,287,712.60	8,304,788.54	6,150,149.29	5,291,997.30
Non-monetary transaction	—	—
Less: loss from price drop in
inventory	—	—
Operating expenses	—	—
Administration expenses	47,599,307.69	48,929,885.07	48,831,035.13	49,964,887.26
Financial expenses	23,744,826.58	24,888,079.22	23,179,507.24	23,161,404.92
3. Operating profit	476,000,294.74	493,775,964.18	206,972,624.62	206,250,777.56
Add: Income from investment	22,392,432.69	5,323,324.64	-59,943.02	619,444.00
Profit/Loss from futures	—	—
Subsidy income	—	—
Non-operating income			623,306.16	623,306.16
Less: Non-operating expenses	18,014,683.34	18,019,683.34	116,865.44	116,865.44
4. Total profit	480,378,044.09	481,079,605.48	207,419,122.32	207,376,662.28
Less: Income tax	68,697,841.71	69,247,008.51	31,079,830.36	31,079,830.36
Minority shareholders’
interests	—	152,394.59		-30,555.09
Add: unrecognised loss from
investment	—	—
5. Net profit	411,680,202.38	411,680,202.38	176,339,291.96	176,327,387.01

• 1.3 As at 31 March 2004, the Company had a total of 49,567 shareholders, of which 811 were holders of H shares.

2. Management discussion and analysis

• 2.1 Brief analysis of overall operating activities during the reporting period of the Company

During the first quarter of 2004, the oil shipping market improved steadily. With the constant increase in the domestic demand for crude oil, the volume of imported oil increased, driving upward the crude oil trans-shipping demand along the domestic coast. The supply of ocean oil and fuel oil remained abundant, whereas the shipping volume of pipeline oil from inland oilfields in northern China decreased significantly. On the other hand, the international oil shipping market remained stable. The Group took

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advantage of favourable market opportunities and made careful arrangement of its oil transshipment operation. During the first quarter of 2004, the shipping volume of imported oil transshiped by the Group was 1.41 billion tonne nautical miles, representing an increase of approximately 53.4 per cent as compared with the same period of 2003. The Group also made active measures to undertake the shipment of foreign trade oil and explore the oil shipping market in third countries. During the first quarter of 2004, the volume of foreign trade oil shipped by the Group was 8.33 billion tonne nautical miles, and the revenue derived from such transportation was RMB379 million, representing an increase of 35.5 per cent and 29.5 per cent respectively as compared with the same period of 2003. During the reporting period, the volume of oil shipped by the Group was 12.73 billion tonne nautical miles, and the revenue derived from such oil transportation was RMB914 million, representing an increase of 20.7 percent and 19 percent respectively. The increase in revenue derived from oil transportation represented a record high achieved by the Company as compared with the same historical period.

During the first quarter of 2004, the domestic dry bulk cargo shipping market remained vigorous. On the other hand, due to the serious port congestion at Qing Huang Dao and Huang Hua in northern China, the coal and shipping capacity were both in short supply, causing the rise in the freight rate of coal along the domestic coast. On the other hand, the Baltic Dry Bulk Freight Index, an international dry bulk freight index, kept on rising steadily and reached 5600 points in early March. The Group took advantage of favourable market opportunities and made careful arrangement of the dry bulk cargo transportation. The Group made active measures to facilitate smooth operation at ports, and made timely readjustment to its shipping routes and operation arrangement, so as to improve shipping efficiency despite port congestion. In addition, in terms of operational strategy, the Group benefited from the advantageous integration of shipping sectors and combination of shipping lines. By transferring some shipping capacity to undertake the transportation of foreign cargo resources, ores and other dry bulk cargoes, the Group improved its operation efficiency and economic benefits. During the first quarter of 2004, the volume of coal undertaken by the Group was 11.43 billion tonne nautical miles and the revenue derived from coal transportation was RMB436 million, representing an increase of 44.2 per cent and 66.5 per cent as compared with the same period respectively.

During the second quarter of 2004, the Company will monitor the changes in the domestic shipping market closely, and adopt various measures to improve its operation of crude oil trans-shipment and ocean oil transportation, and explore the shipping market of fuel oil and crude oil imported from Far East. In terms of coal and other dry bulk cargo transportation, the Company will also monitor the condition of port congestion at various ports in northern China. The Company will make much effort to facilitate the smooth operation at various ports, and to make timely readjustment to shipping routes, so as to minimize the loss in shipping efficiency incurred due to port congestion.

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• 2.1.1 Major operating activities or product contributing over 10 per cent of revenue or profit from major operating activities of the Company

	Revenue from
	major operating	Major operating	Gross profit
Items	activities	costs	margin
	(RMB)	(RMB)	(%)
Ocean transportation	1,517,315,104.83	923,127,018.06	36.86
Of which being
connected transactions	—	—	—

2.1.2 The seasonal or periodic characteristics of the Company’s operation

The Company’s principal activities consist of the shipment of oil and cargoes along the coast of the PRC. In general, the Company’s transportation businesses were affected to a certain degree due to the seasonal changes and the traditional holidays during the first three months of every year. However, since the beginning of 2004, both the international and domestic shipping markets have improved in performance steadily. With increased shipping capacity delivered into operation and the rise in freight rates, the Company has maintained a steady and rapid growth in its oil and coal transportation operations during the first quarter of 2004.

• 2.1.3 Composition of profit during the report period (material changes in the proportions of profit from principal operating activities, profit from other operating activities, expenses for the relevant period, investment income, subsidy income, net non-operating income less expenses to total profit between this period and the previous period)

				Proportion to	Proportion to
	**Total **	amount		the total profit
	January to		January to
	March			March
Items	2004	2003		2004	2003
	(RMB)	(RMB)		(%)	(%)
Total profit	481,079,605.48	1,154,254,968.54		100.00	100.00
Profit from principal operating
activities	559,289,139.93	1,454,260,364.73		116.26	125.99
Profit from other operations	8,304,788.54	23,677,075.23		1.73	2.05
Expenses for the period	73,817,964.29	343,633,696.84		15.34	29.77
Invest income	5,323,324.64	5,329,981.48		1.11	0.46
Subsidy income	—	4,161,500.00		—	0.36
Net non-operating income less
expenses	-18,019,683.34	10,459,743.94		-3.75	0.91
		By order of	the Board
	**China Shipping Development **			Company Limited
		Li Shaode
		Chairman

Shanghai, the PRC 22 April 2004

• As at the date of this announcement, the Board of Directors of the Company is comprised of Mr. Li Shaode, Mr. Xu Zuyuan, Mr. Wang Daxiong, Mr. Yan Mingyi and Mr. Yao Zuozhi as executive directors, Mr. Xie Rong, Mr. Hu Honggao and Mr. Zhou Zhanqun as independent non-executive directors.

Please also refer to the published version of this announcement in The Standard.

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