Water Oasis Group Limited — Proxy Solicitation & Information Statement 2024

May 24, 2024

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Shenzhen Expressway Corporation Limited , you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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(a joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 00548)

INVESTMENT IN THE RECONSTRUCTION AND EXPANSION PROJECT OF THE SECTION FROM HE’AO TO SHENZHEN AIRPORT OF SHENYANG – HAIKOU NATIONAL EXPRESSWAY; AND NOTICE OF THE SECOND EXTRAORDINARY GENERAL MEETING 2024

The second extraordinary general meeting 2024 of Shenzhen Expressway Corporation Limited (“ Company ”) will be held at the conference room of the Company on 46th Floor, Hanking Center Tower, No. 9968 Shennan Avenue, Nanshan District, Shenzhen, the PRC at 10:00 a.m. on Tuesday, 11 June 2024. The notice of the EGM is set out on pages 19 to 20 of this circular. The proxy form (“ Proxy Form ”) of the EGM is enclosed hereto.

Whether or not you intend to attend the EGM, you are requested to complete the Proxy Form in accordance with the instructions printed thereon and return the same to the registrar of H shares of the Company, Hong Kong Registrars Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong (for the holders of H shares) or to the Company on 46th Floor, Hanking Center Tower, No. 9968 Shennan Avenue, Nanshan District, Shenzhen, the PRC (for the holders of A shares) as soon as possible and in any event not less than 24 hours before the time appointed for the holding of the EGM. Completion and return of the Proxy Form will not preclude you from attending and voting in person at the EGM should you so wish.

27 May 2024

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Appendix – Feasibility Study Report on the Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Notice of the EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	19

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DEFINITIONS

In this circular, the following expressions have the following meanings unless the context requires otherwise:

“A Shareholders” holders of A Shares “A Shares” domestic shares with nominal value of RMB1.00 each in the ordinary share capital of the Company, which are listed on the main board of the SSE and traded in RMB (stock code: 600548) “Articles” the articles of association of the Company (as amended from time to time)

• “Board” the board of directors of the Company

• “Company” Shenzhen Expressway Corporation Limited, a joint stock limited company incorporated in the PRC with limited liability, the H Shares of which are listed on the main board of the Stock Exchange and the A Shares of which are listed on the main board of the SSE

• “Director(s)” the director(s) of the Company “EGM” the second extraordinary general meeting 2024 to be convened and held by the Company at the conference room of the Company on 46th Floor, Hanking Center Tower, No. 9968 Shennan Avenue, Nanshan District, Shenzhen, the PRC at 10:00 a.m. on Tuesday, 11 June 2024 or any adjourned meeting(s)

“Group” the Company and its subsidiaries

• “Hong Kong” the Hong Kong Special Administrative Region of the PRC “H Shareholders” holders of H Shares “H Shares” the overseas listed foreign share(s) with nominal value of RMB1.00 each in the ordinary share capital of the Company, which are listed on the main board of Stock Exchange and traded in HK$ (stock code: 00548)

• “Investment” investment of RMB19.23 billion in the Project by the Company

“Jihe Expressway” the expressway from Shenzhen Airport to He’ao, which forms part of the Shenhai National Expressway (G15)

• “Latest Practicable Date” 23 May 2024, being the latest practicable date for ascertaining certain information for inclusion in this circular

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DEFINITIONS

“Listing Rules”	the Rules Governing the Listing of Securities on The Stock
	Exchange of Hong Kong Limited
“PRC”	the People’s Republic of China
“Project”	the reconstruction and expansion project of the section from He’ao
	to Shenzhen Airport of Shenyang - Haikou National Expressway
“RMB”	Renminbi, the lawful currency of the PRC
“Shares”	share(s) in the issued share capital of the Company
“Shareholders”	holders of the Shares
“SSE”	Shanghai Stock Exchange
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“SZ Municipal Government”	Shenzhen Municipal People’s Government, Guangdong Province,
	the PRC
“%”	per cent
Notes:

In this circular, certain English names of Chinese entities are translation of their Chinese names, and are included herein for identification purpose only. In the event of any inconsistency, the Chinese names shall prevail.

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LETTER FROM THE BOARD

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(a joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 00548)

Executive Directors: Legal Address: Mr. LIAO Xiang Wen (President) Fumin Toll Station, Mr. YAO Hai Fucheng Street, Mr. WEN Liang Longhua District, Shenzhen, PRC Non-executive Directors: Mr. DAI Jing Ming Place of Business in PRC: Ms. LI Xiao Yan 46th Floor, Mr. LÜ Da Wei Hanking Center Tower, No. 9968 Shennan Avenue, Independent Non-executive Directors: Nanshan District, Mr. LI Fei Long Shenzhen, PRC Mr. MIAO Jun Mr. XU Hua Xiang Principal Place of Business in Hong Kong: Mr. YAN Yan Room 1603, 16/F, China Building, 29 Queen’s Road Central, Central, Hong Kong

27 May 2024

To the Shareholders

Dear Sirs or Madams,

INVESTMENT IN THE RECONSTRUCTION AND EXPANSION PROJECT OF THE SECTION FROM HE’AO TO SHENZHEN AIRPORT OF SHENYANG - HAIKOU NATIONAL EXPRESSWAY; AND NOTICE OF THE SECOND EXTRAORDINARY GENERAL MEETING 2024

(I) INTRODUCTION

The purpose of this circular is to provide you with the relevant details in relation to the Investment in order to enable the Shareholders to make informed decisions on voting for, against or abstain on the resolution to be proposed at the EGM.

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LETTER FROM THE BOARD

(II) INVESTMENT IN THE RECONSTRUCTION AND EXPANSION PROJECT OF THE SECTION FROM HE’AO TO SHENZHEN AIRPORT OF SHENYANG – HAIKOU NATIONAL EXPRESSWAY

As set out in the joint announcement made by the Company and Shenzhen International Holdings Limited (the controlling Shareholder which owns approximately 52% equity interest in the Company) dated 22 May 2024, the Company will invest approximately RMB19.23 billion in the reconstruction and expansion project of the section from He’ao to Shenzhen Airport of Shenyang – Haikou National Expressway.

Information of Jihe Expressway

Jihe Expressway is an integral part of G15 Shenhai National Expressway. It starts from He’ao Interchange in Longgang District, Shenzhen to the east, and ends at Hezhou Interchange in Bao’an District to the west with a total length of approximately 43 km. It is a two-way six-lane expressway. Jihe Expressway is an important east-west corridor in Shenzhen’s high-speed road network, and a core route for rapid connections in the eastern, central, and western regions of Shenzhen. It has been in operation for over 20 years. With the economic development of Shenzhen and its surrounding areas, the demand for transportation has been growing rapidly, placing significant pressure on Jihe Expressway’s ability to function as a high-speed thoroughfare. Furthermore, the completion and opening of Shenzhen-Zhongshan Bridge, which connects to Jihe Expressway, will further increase the pressure on Jihe Expressway for traffic diversion.

Information of the Project

The major construction of the Project is planned to be fully commenced within this year. The construction period is 5 years and will adopt the three-dimensional composite channel model for the reconstruction and expansion, with a total length of approximately 41.4 km. The construction will be divided into ground-level layer and three-dimensional layer, both of which will be built to the standard of a two-way eight-lane expressway with a design speed of 100 km per hour of which the ground-level layer will primarily widen the existing Jihe Expressway on both sides, supplemented by local separation and construction. The original six-lane expressway will be reconstructed and expanded to eight lanes. The three-dimensional layer adopts a new construction plan as main approach to connect with the high-speed road network. The construction of the Project will cover the 9.4 km western section (from Hezhou Interchange to Shuilang Interchange) with a ground-level twoway eight-lane and an elevated two-way eight-lane expressway, the 27.8 km middle section (from Shuilang Interchange to Paibang Interchange) with a ground-level two-way eight-lane and an elevated two-way eight-lane expressway and the 4.3 km eastern section (from Paibang Interchange to He’ao Interchange) with a ground-level two-way eight-lane expressway.

Investment proposal

The Company will invest approximately RMB19.23 billion for the construction of the Project, and, as the legal entity of the Project, be responsible for the construction and management of the Project, while the ownership of all road assets arising from the construction of the Project will vest in the SZ Municipal Government. During the operation period of the Project, the Company will have the

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LETTER FROM THE BOARD

concession right over the Project. The Company shall, upon the expiration of the operation period, transfer the Project (including roads, ancillary facilities, and related documents) to the SZ Municipal Government or its designated institution(s) without consideration.

The newly approved operation period of the Project will be subject to the actual approval of the Guangdong Provincial Government of the PRC.

In addition to the construction funds to be invested by the Company, the Project will be partially funded by the government for the expropriation and demolition and part of the project construction. The toll revenue of the Project will be allocated with a dynamic adjustment mechanism: the toll revenue will be dynamically adjusted on an annual basis, with the annual toll revenue which falls within 120% of the benchmark toll of a particular year will be fully owned by the Company; while the portion exceeding 120% of the benchmark toll of that particular year will be fully owned by the government.

The SZ Municipal Government will set performance indicators for the Company to evaluate the Project, including the performance evaluation during the construction period, operation period and handover period. The Company will provide a construction period performance guarantee of RMB500 million, an operation period performance guarantee of RMB30 million, and a handover period performance guarantee of RMB220 million to ensure its fulfillment of the relevant construction, operation, handover and other responsibilities.

Investment income estimation

Based on the calculation of the 25-year operation period and the benchmark toll fee, during the operation period, average annual operating revenue of the Project will be approximately RMB1.6 billion (excluding the construction service revenue during the construction period recognised in accordance with Accounting Interpretation No. 14 under the PRC Accounting Standards).

The operation period of the Project is subject to the actual approvals of the relevant government authorities and is subject to uncertainty. The above estimation does not constitute a revenue forecast or performance commitment of the Company.

Reasons for and benefits of investment in the Project

The investment, construction and operation management of toll roads and expressways are within the ordinary and usual course of business of the Group. Jihe Expressway is an integral part of the G15 Shenhai National Expressway, and is an important east-west corridor in Shenzhen’s high-speed road network, as well as a major transportation artery between the Guangdong-Hong Kong-Macao Greater Bay Area and the core areas of the Pearl River Delta. Jihe Expressway is one of the most premium projects of the Company in the Guangdong-Hong Kong-Macao Greater Bay Area, and has experienced rapid traffic growth since its completion and operation. In recent years, the revenue and profit contribution of Jihe Expressway to the Group are approximately 10% and 30%, respectively. Jihe Expressway is an important cornerstone for the sustainable development of Shenzhen Expressway Group. The concession period of Jihe Expressway will expire in 2027. With the economic development of Shenzhen and its surrounding areas, as well as the improvement of the

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LETTER FROM THE BOARD

surrounding road network, the transportation demand has been growing rapidly, placing significant pressure on Jihe Expressway's ability to function as a high-speed thoroughfare. Therefore, the “14th Five-Year Plan” outlines of Guangdong Province and Shenzhen have both listed the reconstruction and expansion project of Jihe Expressway as a major project. The implementation of the Project will help to implement the government’s transportation plan, guarantee the transportation needs of the public, and allow the Company to obtain a reasonable return on its investment, which is a win-win solution for the government, the community and the enterprise.

After the reconstruction and expansion of Jihe Expressway, its existing transportation capacity will be effectively improved, and will meet the transportation demand of the construction for the GuangdongHong Kong-Macao Greater Bay Area and the integration of the Pearl River Delta. Through this Project, the Company can effectively improve the asset quality of Jihe Expressway, expand the scale of its expressway assets, enhance the space for future development of its core business of toll expressway, and further consolidate its core advantages in the investment, construction and operation of toll expressway. The Board is of the view that the investment proposal of the Project is reasonable, and the implementation of the Project is in line with the overall interests of the Shareholders. During the construction period, the Investment in the Project is expected to increase the Group’s investment expenditure by approximately RMB19.23 billion, which will correspondingly increase the Group’s intangible assets for highway by approximately RMB19.23 billion, and increase the Group’s construction service revenue and construction service cost by approximately RMB19.23 billion respectively, with basically no significant impact on the net profit attributable to the Shareholders. Based on the calculation of the 25-year operation period and the benchmark toll fee, during the operation period, the average annual operating revenue of the Project will be approximately RMB1.6 billion (excluding the construction service revenue during the construction period recognised in accordance with Accounting Interpretation No. 14 under the PRC Accounting Standards). The above figures are preliminary estimation, and the final impact needs to be confirmed at the time of actual occurrence and can only be determined after being audited by the Company’s auditors. The completion of this Investment will not result in connected transactions and peer competition of the Company and will not cause any non-operating fund occupation or new external guarantees for the Company.

Pursuant to the requirements of the listing rules of the SSE and the Articles, the Investment in the Project constitutes an investment which requires Shareholders’ approval. To the best of the knowledge, information and belief of the Directors, having made all reasonable enquiries, none of the Shareholders is required to abstain from voting on the resolution approving the Investment in the Project at the EGM.

After completing the statutory approval procedures, the Company will commence the construction work for the Project. The Company intends to enter into a number of engineering contracts with the engineering construction contractors. The Company will comply with the applicable compliance requirements under the Listing Rules and fulfill their information disclosure obligations (if applicable).

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LETTER FROM THE BOARD

(III) EGM

The Company will convene the EGM at the conference room of the Company on 46th Floor, Hanking Center Tower, No. 9968 Shennan Avenue, Nanshan District, Shenzhen, the PRC at 10:00 a.m. on Tuesday, 11 June 2024. The notice of the EGM is set out on pages 19 to 20 of this circular. The Proxy Form is enclosed hereto.

Whether or not you are able to attend the EGM, you are advised to read the notice of the EGM carefully and complete the Proxy Form that have been despatched to you in accordance with the instructions printed thereon. H Shareholders must return the Proxy Form to the H share registrar of the Company, Hong Kong Registrars Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, while A Shareholders must return the Proxy Form to the Company at on 46th Floor, Hanking Center Tower, No. 9968 Shennan Avenue, Nanshan District, Shenzhen, the PRC, no later than 24 hours before the time appointed for convening the EGM. Completion and return of the Proxy Form will not preclude you from attending and voting at the EGM in person if you so wish.

(IV) CLOSURE OF REGISTER OF HOLDERS OF H SHARES

The register of holders of H Shares will be closed from Thursday, 6 June 2024 to Tuesday, 11 June 2024, both days inclusive, during which period no transfer of H Shares will be effected. In order to qualify for attending the EGM, all transfer documents of H Shares accompanied by the relevant share certificates must be lodged with the Hong Kong Registrars Limited at Shops 1712-16, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not later than 4:30 p.m. on Wednesday, 5 June 2024.

(V) VOTING BY POLL

Pursuant to Rule 13.39(4) of the Listing Rules and the Articles, the EGM shall vote by poll on the resolution set out in the notice of the EGM. Therefore, all resolutions as set out in the notice of EGM will be voted by poll. The poll results will be published on the HKEXnews website of Hong Kong Exchanges and Clearing Limited and the website of the Company upon the conclusion of the EGM.

To the best knowledge, information and belief of the Directors, having made all reasonable enquiries, no Shareholder has a material interest in any of the above resolutions and has to abstain from voting at the EGM on the above resolutions.

(VI) RECOMMENDATIONS

The Board considers that the Investment is in the interests of the Company and the Shareholders as a whole, and therefore recommends all the Shareholders to vote in favour of the resolution at the EGM.

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LETTER FROM THE BOARD

Your attention is drawn to the Feasibility Study Report on the Project prepared by China International Engineering Consulting Corporation, an independent professional engineering consulting agency in the PRC, set out in the Appendix to this circular.

By Order of the Board of Liao Xiang Wen Executive Director and President

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FEASIBILITY STUDY REPORT ON THE PROJECT

APPENDIX

The following is the full text of the Feasibility Study Report on the Project prepared by China International Engineering Consulting Corporation, an independent professional engineering consulting agency in the PRC. This report is originally prepared in Chinese and the English version is for reference only. In the event of any inconsistency between the Chinese version and the English version, the Chinese version shall prevail.

FEASIBILITY STUDY REPORT ON INVESTMENT IN THE RECONSTRUCTION AND EXPANSION PROJECT OF THE SECTION FROM HE’AO TO SHENZHEN AIRPORT OF SHENYANG-HAIKOU NATIONAL EXPRESSWAY

I. BASIC INFORMATION OF THE PROJECT

(I) Current situation of Jihe Expressway

Jihe Expressway starts at the He’ao Interchange in Longgang District, passes through Longgang District in Shenzhen, Fenggang Town in Dongguan, and Longhua and Bao’an Districts in Shenzhen, and ends at the Hezhou Interchange in Bao’an District, being a two-way six-lane expressway with a total length of 43 kilometres and a design speed of 100 kilometres per hour. Its east and west sections were completed and opened to traffic in 1997 and 1999, respectively.

(II) Overview of the reconstruction and expansion project

According to the Reply of the Ministry of Transport on the Preliminary Design of the Reconstruction and Expansion Project of the Section from He’ao to Shenzhen Airport of Shenyang-Haikou National Expressway ( 交通運輸部關於沈陽至海口國家高速公路荷坳至深

圳機場段改擴建工程初步設計的批覆 ) (“ preliminary design ”), Jihe Expressway will be reconstructed and expanded in a three-dimensional composite passage model. The construction scope includes a ground layer and a three-dimensional layer, both of which will be constructed according to the standard for two-way eight-lane expressways (“ Jihe Project ”), with a length of about 41.4 kilometres and a design speed of 100 kilometres per hour.

According to the latest arrangements, the construction scope of the Jihe Project has been optimised and adjusted as follows: a two-way eight-lane ground layer + a two-way eight-lane three-dimensional layer for the west section (Hezhou Interchange-Shuilang Interchange, 9.4 kilometres), a two-way eight-lane ground layer + a two-way eight-lane three-dimensional layer for the middle section (Shuilang Interchange-Paibang Interchange, 27.8 kilometres), and a twoway eight-lane ground layer for the east section (Paibang Interchange-He’ao Interchange, 4.3 kilometres) (“ Project ”).

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FEASIBILITY STUDY REPORT ON THE PROJECT

APPENDIX

(III) Progress

In 2024, according to the latest arrangements, Shenzhen Expressway Corporation Limited (“ Shenzhen Expressway ”) plans to enter into the Supplementary Agreement to the Expressway Franchise Agreement of Shenzhen Municipality ( 深圳市高速公路專營權協議補充協議 ) with the Transport Bureau of Shenzhen Municipality (深圳市交通運輸局) (“ Shenzhen Transport Bureau ”) and invest in the Project.

(IV) Revenue

Based on the calculation of the 25-year operation period and the benchmark toll fee, during the operation period, the average annual operating revenue of the project will be approximately RMB1.6 billion (excluding the construction service revenue during the construction period recognised in accordance with Accounting Interpretation No. 14 under the PRC Accounting Standards).

II. ECONOMIC AND SOCIAL DEVELOPMENT, AND TRAFFIC IN SHENZHEN

(I) Economic development

Shenzhen is located on the south coast of China, in southern Guangdong Province, on the east bank of the Pearl River estuary, adjacent to Hong Kong, bordered by the Daya and Dapeng Bays on the east, the Pearl River estuary and the Lingding Bay on the west, Hong Kong across the Shenzhen River on the south, and Dongguan and Huizhou Cities on the north. A vast sea area connects it to the South China Sea and the Pacific Ocean. Shenzhen is located south of the Tropic of Cancer, within 113°46’~114°37’ east longitude and 22°27’~22°52’ north latitude. The easternmost terrestrial end is located at the Haichai Cape in Dongchong Village, Nan’ao Sub-district in the east, the westernmost end in Minzhu Village, Shajing Sub-district in the northwest, the southernmost end in Neilingding Island in the Pearl River estuary in the southwest, and the northernmost end in Luotian Community, Songgang Sub-district in the northwest. Shenzhen is a municipality under the jurisdiction of the provincial government of Guangdong Province, China, and a sub-provincial municipality separately listed in the state plan. Shenzhen governs nine administrative districts and one new district (Futian, Luohu, Yantian, Nanshan, Bao’an, Longgang, Longhua, Pingshan, Guangming and Dapeng). On 16 December 2018, the Shenzhen-Shantou Special Cooperation Zone in Shanwei City was officially inaugurated.

At the end of 2023, Shenzhen had a permanent population of 17.7901 million. This included a permanent registered population of 6.0614 million, accounting for 34.1% of the permanent population, and a permanent non-registered population of 11.7287 million, accounting for 65.9%. According to Guangdong Province’s regional GDP uniform accounting results, Shenzhen recorded a regional GDP of RMB3.066485 trillion in 2023, a year-on-year increase of 6.7%. In particular, the absolute value of primary industries was RMB2.659 billion, a yearon-year increase of 5.1%; that of secondary industries was RMB1.133859 trillion, a year-onyear increase of 4.9%; and that of tertiary industries was RMB1.929967 trillion, a year-on-year increase of 7.8%.

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APPENDIX

FEASIBILITY STUDY REPORT ON THE PROJECT

Table 1 GDP of Shenzhen by District and Structure in 2023

	**Regional **	GDP		**Primary **	industries		**Secondary **	industries	**Tertiary **	industries
	Absolute	_YOY _	growth	Absolute	YOY growth		Absolute	YOY growth	Absolute	YOY growth
	value		(%)	value		(%)	value	(%)	value	(%)
Whole city	30664.85		6.7	26.59		5.1	11338.59	4.9	19299.67	7.8
Futian District	5318.19		8.6	1.60		3.5	472.08	26.6	4844.50	7.2
Luohu District	2571.67		8.0	0.42	–	23.7	176.99	7.9	2394.25	8.0
Yantian District	760.49		11.1	0.51	259.5		126.97	25.7	633.00	8.6
Nanshan District	7630.59		9.1	1.17	– 5.9		2188.40	10.2	5441.02	8.6
Bao’an District	4421.83		11.3	0.92		24.4	2230.47	13.8	2190.44	8.8
Longgang District	4496.45		– 7.6	1.12		27.5	2986.38	– 12.5	1508.96	4.0
Longhua District	2828.45		10.2	0.59		13.8	1446.99	11.8	1380.87	8.7
Pingshan District	910.60		11.7	1.13		9.9	593.40	13.9	316.07	7.7
Guangming District	1285.33		12.9	2.38	– 3.6		875.45	15.0	407.50	8.8
Dapeng New District	370.35		8.0	1.13	–	11.1	213.17	8.2	156.05	7.8
Shenzhen-Shanwei Special
Cooperation Zone	70.91		17.8	15.63		4.9	28.27	29.4	27.01	15.1

Source: 2023 Statistical Bulletin on National Economic and Social Development of Shenzhen Municipality

(II) Development of highways and highway transport

1. Current situation

Shenzhen boasts developed highway transport, with a total highway length of 721 kilometres at the end of 2023, including expressways of 392 kilometres. The longdistance passenger transport routes in Shenzhen cover all cities and counties in the province, and provide access to Hong Kong, Macao, and over 20 provinces (autonomous regions, municipalities directly under the central government) in the Chinese mainland. With the integration of regional transport and the interconnection of expressways in the Pearl River Delta, Shenzhen’s position as a national transport hub city is further strengthened.

As a regional transport hub city in the Pearl River Delta, Shenzhen’s comprehensive passenger and freight transport volume is growing rapidly. Preliminary statistics show that the total freight transport volume of Shenzhen was 432.61 million tons in 2023, a year-on-year increase of 9.6%. The freight transport turnover reached 245.2 billion tonkilometres, a year-on-year increase of 9.6%. The total passenger transport volume for the year was 206.39 million, a year-on-year increase of 96.9%. The passenger transport turnover reached 98.4 billion person-kilometres, a year-on-year increase of 133%.

With the development of the economy and the continual improvement of people’s living standard, the number of registered motor vehicles of all types in Shenzhen is growing rapidly. At the end of 2023, the total number of civilian vehicles in the city was 4.1027

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FEASIBILITY STUDY REPORT ON THE PROJECT

APPENDIX

million, a year-on-year increase of 4.3%, including 3.1691 million private vehicles, a year-on-year increase of 4.9%. The number of civilian sedans was 1.9838 million, a year-on-year increase of 1.0%, including 1.8006 million private sedans, a year-on-year increase of 1.3%.

2. Planning

According to the 14th Five-Year Development Plan for Comprehensive Transport of Shenzhen Municipality, the highway development plan of Shenzhen is as follows:

First, establish a road network system with supporting factors circulating conveniently, and enhance the external radiation and driving effect of highways. Build a river-crossing passage system with clear functions and a reasonable structure, complete the ShenzhenZhongshan Bridge and the Shenzhen side connecting line, and reserve river-crossing passages such as the Lingding Bay Passage and the west extension of Outer Ring Expressway in planning to promote the convenient circulation of resource factors across the east and west banks of the Pearl River;

Second, add new connecting passages with eastern Guangdong, accelerate the construction of Shenshan Second Expressway, plan and study the connecting line of Heyuan-Huizhou-Shanwei Expressway, and reserve Shenshan Cross-sea Expressway in planning. Continue to advance the construction of Shenzhen Outer Ring Expressway, and implement the capacity reconstruction and expansion of busy traffic sections such as Jihe-Huiyan and Shenshan Expressways;

Third, strengthen the connection of boundary roads in Shenzhen, Dongguan and Huizhou Cities. Improve the planning and layout of boundary roads, and promote the construction of a number of cross-boundary roads. Deepen the planning and research of intercity high-speed road projects such as the north extensions of Longguan high-speed road, Nanguang high-speed road and Yanlong Avenue, and build a smoother intercity road network system;

Fourth, promote the construction of urban trunk road networks. Add east-west fast passages, improve grades of north-south passages, build a more balanced urban road network system, and support the integrated development of areas within and out of the original special zone. By 2049, on the premise of a public transit share of 70% and a car share of 30%, the transport demand borne by east-west high-speed roads in the second and third rings will rise from today’s 120,000-160,000 PCUs/day to 746,000 PCUs/day. The municipal government has conducted research on the optimisation of Shenzhen’s high-speed road network and the layout planning of underground high-speed roads in consideration of the future reconstruction and expansion of Jihe Expressway into a composite passage, and proposed the plan for a new round of optimisation of the city’s high-speed road network. Except for the reconstruction and expansion of Jihe Expressway into a double-layer three-dimensional composite passage, it has also proposed to add such passages as the west extension of Outer Ring Expressway,

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FEASIBILITY STUDY REPORT ON THE PROJECT

APPENDIX

Baopeng and Baoping in the second and third rings in parallel with Jihe Expressway outside the original special zone, and form a combination of east-west toll and toll-free highways in the second ring along with the toll passage of Jihe Expressway;

Fifth, study the necessity and feasibility of adding new passages (including the Shenyan Third Expressway) from the eastern coastal cluster to the central area in consideration of development needs of Yantian and Dapeng. Promote the planning and construction of Shendong and Wangpeng Avenues, and improve the road network framework of the Shenzhen-Shanwei Special Cooperation Zone.

III. CONSTRUCTION PLAN

(I) Construction technical standards

According to the preliminary design of the Jihe Project, the design vehicle load rating for new bridges and culverts of the Jihe Project is Highway Grade I. Existing bridges utilised will follow the original load standard, while other technical indicators will be based on the Technical Standard for Highway Engineering (JTG B01-2014). The scheme of both-side widening of the existing expressway will be used for the ground layer, 13 interchanges reconstructed and expanded, including He’ao and Paibang (hub), and the Fuzhou (Jiuwei) Interchange reserved; the three-dimensional layer will be newly constructed mainly, with interchanges set up at four sites including Paibang (hub) and Pinghu South.

(II) Technical evaluation

The argumentation of a highway’s technical standard includes several aspects such as road technical grade, design speed and roadbed width. Road technology level should be selected based on road network planning, highway functions, and traffic volume argumentation. The selection of design speed shall be determined based on the functional and technical grades of the highway along with factors such as terrain, construction costs, expected driving speed, land uses along the line, and environmental protection requirements. The roadbed width not only corresponds directly to the design speed, but is also related to the composition of vehicular traffic, traffic capacity, and actual widths of all components required for road safety, taking into account various factors such as construction costs, geological conditions and environmental protection.

The Project chooses the scheme of full expansion of the existing road, and its technical standard is formulated according to the prevailing Technical Standard for Highway Engineering (JTG B01-2014), and Design Specification for Highway Routes (JTG D202017), etc. Proven technologies that comply with state regulations will be used for its construction, operation and maintenance.

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APPENDIX

FEASIBILITY STUDY REPORT ON THE PROJECT

Table 2 Main Technical Indicators of the Ground Layer Main Line

	Item	Item	Unit		Indicator
				Current value	Standard value	Design value
					(after expansion)	(after expansion)
Highway grade				Expressway (two-way six-lane)	Expressway (two-way eight-lane)	Expressway (two-way eight-lane)
Design speed			km/h	100	100	100
Driveway width			m	3.75×3×2	3.75×4×2	3.75×4×2
Hard shoulder width			m	2.50×2	3.00×2	3.00×2
Median strip width			m	2	2	2
Minimum radius of horizontal curve
without super-elevation			m	4,000	4,000	4,000
						1,200 (newly constructed
Genera minimum radius of horizontal curve			m	1,000	700	section) 1,040
						(expanded section)
						3.0 (newly constructed
Maximum longitudinal		gradient	%	3.3	4	section) 3.553
						(expanded section)
						16,000 (newly constructed
		Convex	m	5,000	Typical value: 10,000, limit value: 6,500	section) 10,000
Radius of vertical						(expanded section)
curve						8,000 (newly constructed
		Concave	m	4,000	Typical value: 4,500, limit value: 3,000	section) 7,034.985
						(expanded section)
Stopping sight distance			m	160	160	160
Design load of bridges		and culverts		Highway Grade I	Highway Grade I	Highway Grade I
				1/300 for super-large	1/300 for super-large	1/300 for super-large
Design flood frequency of bridges and				bridges, 1/100 for medium	bridges, 1/100 for medium	bridges, 1/100 for medium
culverts				and small bridges,	and small bridges,	and small bridges,
				and culverts	and culverts	and culverts

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FEASIBILITY STUDY REPORT ON THE PROJECT

APPENDIX

Table 3 Main Technical Indicators of the Three-dimensional Layer Main Line

	Item	Unit	Indicator	Indicator
			Standard value	Design value
Highway grade			Expressway (two-way eight-lane)	Expressway (two-way eight-lane)
Design speed		km/h	100	100
Driveway width		m	3.75×4×2	3.75×4×2
Hard shoulder width		m	3.00×2	3.00×2
Median strip width		m	2	2
Minimum radius	of horizontal curve
without super-elevation		m	4,000	4,000
Genera minimum	radius of horizontal
		m	700	1,120
curve
				2.90
Maximum longitudinal gradient		%	4	(newly constructed section) 2.856
				(expanded section)
				16,000
	Convex	m	Typical value: 10,000, limit value: 6,500	(newly constructed section) 21,636.462
Radius of vertical				(expanded section)
curve				12,000
	Concave	m	Typical value: 4,500,	(newly constructed section)
			limit value: 3,000	10,398.247
				(expanded section)
Stopping sight distance		m	160	160
Design load of bridges and culverts			Highway Grade I	Highway Grade I
			1/300 for super-large	1/300 for super-large
Design flood frequency of bridges and			bridges, 1/100 for medium	bridges, 1/100 for medium
culverts			and small bridges,	and small bridges,
			and culverts	and culverts

IV. INVESTMENT AND FINANCING PROPOSAL

(I) Investment Structure

In addition to the construction funds to be invested by SZ Expressway, which is approximately RMB19.23 billion, the government will also provide partial funds for the expropriation and demolition and part of the Project construction.

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FEASIBILITY STUDY REPORT ON THE PROJECT

APPENDIX

(II) Operation Period

The construction period of the Project is tentatively set at 5 years, subject to the specific commencement date; The operation period is tentatively set at 25 years, and the toll collection period is subject to actual approval.

(III) Core Elements

1. Shenzhen Expressway raises the necessary construction funds for the Project through its own funds and market-oriented methods;

2. Shenzhen Expressway is responsible for the investment and construction of this project, as well as the operation and maintenance of the new and original route in the renovation and expansion project. Shenzhen Expressway enjoys the toll collection right, claims toll revenue, and recovers investment to obtain reasonable returns;

3. The toll revenue of the Project will be allocated with a dynamic adjustment mechanism. The toll revenue will be dynamically adjusted on an annual basis, and the annual toll revenue which falls within 120% of the benchmark toll of a particular year will be owned by SZ Expressway; while the portion exceeding 120% of the benchmark toll of that particular year will be fully owned by the government;

4. The Municipal Transportation Bureau evaluates the performance and completion status of the Shenzhen Expressway, and the performance evaluation results are linked to the amount of guarantees extracted during the construction, operation, and handover periods;

5. Shenzhen Expressway shall, upon the expiration of the operation period, transfer the project to the Shenzhen Municipal Government or its designated institution free of charge.

V. NECESSITY AND FEASIBILITY

(I) Significant geographical advantages of the project area

As an important component of Shenhai Expressway (G15), Jihe Expressway is a trunk transport corridor between the Guangdong-Hong Kong-Macao Greater Bay Area and the core area of the Pearl River Delta, and plays a crucial role in the national and provincial expressway networks. With the completion and opening of the Shenzhen-Zhongshan Bridge, in the future Jihe Expressway will become the most convenient core passage connecting the east and west sides of the Pearl River with irreplaceable geographic advantages.

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FEASIBILITY STUDY REPORT ON THE PROJECT

APPENDIX

(II) Beneficial for the sustainable development of Shenzhen Expressway

The overall project of Jihe Expressway has been operating for over 26 years with excellent performance. Investing in the Project meets the requirements of Shenzhen Expressway for strategic project investment and core business development, and is conducive to the sustainable development of Shenzhen Expressway.

(III) Feasible construction and operation

As the original operating entity of the Project, Shenzhen Expressway has rich experience in the construction and operation of the Project. Shenzhen Expressway participated deeply in the preparation of the engineering feasibility study report of the Project, and has excellent control over the Project’s construction. The Project is reconstructed and expanded from the original route, and will be operated together with the original route in a unified manner after completion. Based on the operation experience of the original route, operating costs are controllable, and the performance evaluation requirements of the government can be met.

VI. RISK ANALYSIS AND CONTROL MEASURES

(I) Risk of uncertain toll collection period after the completion of reconstruction and expansion

Risk point: It is assumed that the Project will be approved for toll collection period of 25 years after the completion of reconstruction and expansion. If the approved period is not as expected, the Project’s revenue will be affected significantly.

Risk analysis: The reasonable toll collection period for a newly invested highway reconstruction and expansion project will be reviewed by the transport authority of Guangdong Province and approved by the Guangdong Provincial People’s Government. Shenzhen Expressway will pay on-going attention to the latest toll highway policies, strengthen communication with the competent authorities of the provincial government, and strive for a more reasonable toll collection period.

(II) Risk of changes in government toll collection policies

Risk point: The state’s industry policies have been adjusted several times in the past few years, and it is expected that toll highway policies will still undergo changes and adjustments in the future.

Risk analysis: During the implementation of the Project, Shenzhen Expressway will pay close attention to revisions and changes of laws and regulations such as the Highway Law of the People’s Republic of China, and the Regulations on the Administration of Toll Highways, and make judgments and take response measures timely.

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FEASIBILITY STUDY REPORT ON THE PROJECT

APPENDIX

(III) Financing risk of Shenzhen Expressway

Risk point: The total investment of the Project is relatively high, with the contribution of approximately RMB19.23 billion from Shenzhen Expressway, which poses a financing risk.

Risk analysis: Shenzhen Expressway has a stable sustainable operation capability, and sufficient working capital, and is expected to meet the capital requirements of the Project. Shenzhen Expressway may raise the balance by various means such as borrowing bank loans, issuing equity financing instruments, and issuing bonds, which are expected to meet the investment requirements for the Project.

VII. RESEARCH CONCLUSION

For Shenzhen Expressway, as the operating entity of the original route, participating in the investment, construction and operation of the Project is good to the continuity of its high-quality assets; the investment risks of the Project are largely controllable, and it is feasible for Shenzhen Expressway to participate in the investment and construction of the Project.

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NOTICE OF THE EGM

==> picture [314 x 96] intentionally omitted <==

(a joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 00548)

NOTICE OF THE SECOND EXTRAORDINARY GENERAL MEETING 2024

Notice is hereby given that the second extraordinary general meeting 2024 (the “ EGM ”) of Shenzhen Expressway Corporation Limited (the “ Company ”) will be held at the conference room of the Company on 46th Floor, Hanking Center Tower, No. 9968 Shennan Avenue, Nanshan District, Shenzhen, the PRC at 10:00 a.m. on Tuesday, 11 June 2024 to consider and, if thought fit, pass the following resolution:

ORDINARY RESOLUTION

1. To consider and approve the resolution in relation to the investment in the reconstruction and expansion project of the section from He’ao to Shenzhen Airport of Shenyang - Haikou National Expressway.

By Order of the Board Liao Xiang Wen Executive Director and President

Shenzhen, the PRC, 27 May 2024

Notes:

1. Eligibility for attending the EGM

Shareholders of the Company whose names appear on the registers of shareholders of the Company at the close of business on 5 June 2024 shall have the right to attend the EGM after complying with the necessary registration procedures.

2. Registration procedures for attending the EGM

Holders of H shares of the Company please note that the register of holders of H shares of the Company will be closed from 6 June 2024 to 11 June 2024 (both days inclusive), during which period no transfer of H shares of the Company will be registered. Holders of H shares of the Company who intend to attend the EGM must deliver their instruments of transfer together with the relevant share certificates to Hong Kong Registrars Limited, the registrar of H shares of the Company, at Shops 1712-16, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, at or before 4:30 p.m. on 5 June 2024.

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NOTICE OF THE EGM

3. Proxy

• i. Shareholders entitled to attend and vote at the EGM are entitled to appoint, in written form, one or more proxies (whether a shareholder or not) to attend and vote on his behalf.

• ii. A proxy should be appointed by written instrument signed by the appointor or his attorney. If the written instrument is signed by the attorney of the appointor, the written authorisation or other authorisation documents of such attorney should be notarised. In order to be valid, for holders of A shares of the Company, the written authorisation or authorisation documents which have been notarised together with the completed proxy form must be delivered to the Company not less than 24 hours before the time of the holding of the EGM. In order to be valid, for holders of H shares of the Company, the above documents must be delivered to Hong Kong Registrars Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, within the same period.

• iii. Shareholder or his proxy should produce identity proof when attending the EGM.

4. Poll

Pursuant to Rule 13.39(4) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and the Articles of Association of the Company, voting at the EGM on the resolution set out in the notice of the EGM will be taken by poll.

5. Other matters

• i. The duration of the EGM is expected not to exceed one day. Shareholders or proxies who attend the EGM shall arrange for transport, food, accommodation and other relevant expenses at their own cost.

• ii. Address of Hong Kong Registrars Limited (for share transfer): Shops 1712-16, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong

• iii. Address of the Company:

• 46th Floor, Hanking Center Tower, No. 9968 Shennan Avenue, Nanshan District, Shenzhen, the PRC Postal code: 518057

Tel: (86)755 – 8669 8056

• Fax: (86)755 – 8669 8002

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