CKS Announces 2010 Annual Results

Introduction of Powerful Partners

Acquisition of Quality Assets

Perfects Terminal Network

Captures The Growing Opportunities Of Inland River Transport

HONG KONG, March 17, 2011 /PRNewswire-Asia/ --

Financial Highlights:

Chu Kong Shipping Development Co., Ltd ("CKSD" or the "Company") (Stock code: 560), a leading comprehensive transportation services supplier in the Guangdong-Hong Kong-Macau Region announced its unaudited annual results for the year ended 31 December 2010.

In 2010, the Company's consolidated revenue grew by 20.3% year-on-year to HK$1,107.29 million. Gross profit increased by 14.2% year-on-year to HK$232 million. Profit attributable to equity holders of the Company reached HK$137 million, 18% more than last year. Basic earnings per share amounted to HK15.21 cents (2009:HK12.89 cents). The Board proposed a final dividend of HK4 cents per share for the year ended 31 December 2010, including interim dividend of HK2 cents per share paid, total dividend for 2010 amounting to HK6 cents per share.

Dr Hua Honglin, Chairman of CKSD, said "2010 was a critical year for CKSD. The Company has initiated a number of strategic alliances and acquisitions to achieve leapfrog development and lay a solid foundation to achieve our strategic plan. Noteworthy here was introducing China Merchants Holdings (International) Company Limited as a strategic investor. On the acquisition front, we acquired the promising business of high-speed passenger ships to and from Guangdong, Hong Kong and Macau, as well as Civert Logistics. We also entered into a cooperation framework agreement with COSCO Container Lines Company Limited. Besides, driven by the global economic recovery and the PRC Government's stimulus economic policy, China's and Hong Kong's import and export value and container shipments recorded satisfactory growth. We have achieved encouraging results with the Company's container transportation volume reached a record high."

Cargo Transportation Business

Driven by the global economic recovery and increase in domestic demand, the preformance of our cargo transportation business has been satisfactory. During the year, due to a closer relationship between Chu Kong Transhipment & Logistics Company Limited, which operates CKSD's major container transportation business, and other major shipping companies, the cargo source under the Connected Carrier Agreement of major shipping companies increased significantly. This drove up the overall container transportation volume and resulted in a year-on-year increase of 18.6% to 919,000 TEU, a record high for CKSD. For break bulk cargo transportation, as Hong Kong and Mainland China had economically recovered and Chu Kong Agency Company Limited devoted more efforts to marketing, transport volume of increased significantly by 15.0% to 411,000 revenue tonnes. The market share of the Company in the Category-2 ports in Pearl River Delta that have business relationships with the Company increased to 20.3% (2009: 19.3%).

The Company's core wharf business recorded marked growth as its container and break bulk cargoes handling volume rose by 6.8% and 27.9% respectively. Chu Kong Cargo Terminals (Gaoming) Co., Ltd. vigorously explored avenues to locate new customers. As a result, the foreign-tade container handling volume enjoyed a significant growth of 39.0% over last year and its profit contribution to the Company of HK$24,575,000 increased by 149.7% over 2009. Chu Kong Cargo Terminals (Kangzhou) Co., Ltd.'s container handling volume recorded a year-on-year increase of 20.2%. Chu Kong Transportation (H.K) Limited's break bulk cargoes handling operations recorded an increase of 17.7%. In addition, Zhaoqing Chu Kong Logistics (Sihui) Co., Ltd. enhanced its internal management and cost control, achieving a turnaround in profitability. Besides, as the Company increased its shareholdings in Zhaoqing New Port, which completed a liner voyage facility and opened for business, it was believed that the new foreign-trade cargo business would bring profits to the Company. In August, the Company acquired 75% equity interest in Civert Logistics Company Limited ("Civert Logistics"). The appointment of the management, and adjustment of the strategic direction operations were made immediately by the Company in order to enhance their competitiveness and attract more new customers and shipping companies.

The investment in jointly controlled entities Foshan New Port Ltd., Foshan Nankong Terminal Co., Ltd. and Chu Kong Logistics (Singapore) Singapore Pte. Ltd. recorded increases in their profit contribution to the Company. Guangdong Zhu Chuan Navigation Co., Ltd. recorded a turnaround in profit as a result of business tax exemptions and net income from disposal of old vessels. Continuously affected by domestic environmental policies and the Pearl River Delta infrastructural upgrading, the profit attributable to the Company of Sanshui Sangang Containers Wharf Co. Ltd and Shenzhen Yantian Port Chu Kong Logistics Co., Ltd. declined. Besides, the Company acquired 49% equity interest in Chu Kong Air-Sea Union Transportation Company Limted ("CKSA") from Hong Kong Air Cargo Industry Services Limited in February 2011, thus CKSA would become a wholly-owned subsidiary of the Company. The Company will leverage the premier geographical strength of CKSA to develop the air cargo stoarge and distribution businesses with a higher gross profit margin, and thereby improve its income level.

Passenger Transportation Business

The Company recorded an outstanding performance in passenger transportation business during 2010. The number of passengers transported through the Company's agency services rose by 11.1% to approximately 5.43 million person-times, while the number of passengers for terminal services grew by 5.9% to 5.40 million, contributing a profit of HK$66.71 million. Chu Kong Passenger Transport Company Limited ("CKPT") operated as an agent 22 ferry routes in total in urban areas and at airports in Guangdong Province, Hong Kong and Macau. In 2010, CKPT's market share of its agency services rose to 90.8% (2009: 88.2%) for the routes between Guangdong and Hong Kong, and to 31.9% (2009: 26.4%) for routes between Hong Kong and Macau.

As for investment in jointly controlled entities, Sky Pier, operated by Hong Kong International Airport Ferry Terminal Services Ltd ("HKIAFTS") with a 60% equity interest held by CKSD, was upgraded as a permanent terminal. As a permanent terminal is operated and charged on a basis which is completely different from that of a temporary terminal, the franchise fee of Sky Pier has risen significantly. However, the number of passengers has increased in response to the improvement of facilities and services, offsetting the increased operating cost. HKIAFTS contributed a net share of profit after tax of HK$12.08 million in 2010, representing a year-on-year increase of 9.6%. Meanwhile, the routes between Macau Taipa Temporary Ferry Terminal and the Hong Kong International Airport commenced operation in May 2010, and it is expected that the number of transit passengers would continue to increase. Furthermore, the profit from Zhongshan-Hong Kong Passenger Shipping (40% equity interest held by CKSD) and Shungang Passenger Transportation (40% equity interest held by CKSD) amounted to HK$8.27 million and HK$4.55 million respectively.

Strategic Cooperation and Acquisition Projects

During the year, CKSD had forged several strategic alliances and initiated a few acquisitions. CKSD's annual results of 2010 reflect CKSD successfully broadening its income sources by acquiring CKPT. On the heels of CKSD's strategic cooperation framework agreement with China Merchants Holdings (International) Company Limited ("CMHI") in July 2010, the Company has disposed 20% equity interest in Chu Kong River Trade Terminal Co., Ltd ("CKRTT") to a wholly-owned subsidiary of CMHI on December 2010. The equity transfer has been completed in February 2011. As a result, CMHI became a strategic shareholder of CKRTT. CKSD and CMHI have collaborated to develop public barge express services for feeder and carrier ports formally launched to the market in March 2011 which are expected to bring considerable growth in the number of containers handled by the Company. The strategic cooperation with CMHI and COSCO Container Lines Co., Ltd. would optimise integration of the feeder-carrier-linked network of the Company with the major shipping companies. This, in turn, will enable provision of more comprehensive and efficient quality services to customers and promotion of the "CKS" brand of in the global market, resulting in a win-win market situation. Meanwhile, the collaboration will also enlarge the Company's inland river transport volume and terminal throughput, thereby improving its overall profit level.

Dr Hua Honglin, Chairman of CKSD, said, "As the broader collaboration among Guangdong, Hong Kong and Macau has been discussed in broad strokes within the '12th Five-year Plan', the domain for cooperation between the three areas will be boundless. The State has also formulated the development planning to construct a modern inland river transportation system. All these factors are beneficial to enterprises in this industry. Leveraging its leading position in the transportation industry within the Guangdong-Hong Kong-Macau region, the Company will continue to upgrade its ports and business networks through strategic alliances and acquisitions, consolidate and rationalise its internal resources, and improve its operational efficiency. We believe that CKSD will benefit from the rapid growth of both logistics services and passenger transportation in the region, thereby generating satisfactory return to shareholders."

About Chu Kong Shipping Development Co., Ltd.

Chu Kong Shipping Development Co., Ltd., listed on The Stock Exchange of Hong Kong Limited in 1997, is the only Hong Kong-listed company under the umbrella of Guangdong Province Navigation Holdings Company Limited. It provides comprehensive logistics services and operates high-speed ferry business within Guangdong-Hong Kong-Macau Region, as well as invests and manages river cargo terminals in Mainland China. With well-established marketing, terminal, transportation and information networks in the Pearl River Delta and profound industry experience, the Company is committed to providing comprehensive services in river transportation, stepping toward its goal to become a leading comprehensive transportation services provider.