August 11, 2010
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation.
Contents
Part I – 1st Half 2010 Financial Results and Outlook
1. Financial Performance
2. Outlook
Part II – Acquisition of Zhejiang Wenzhou Yongtaiwen Expressway Co., Ltd
3. Transaction Overview
4. Target Overview
5. Transaction Rationale
6. Financing Structure & Impact on CMHP
7. Conclusion
2
1. Financial Performance
3
Financial Highlights
Net Profit
HK$173 million
7%
EPS (basic)
27.54 HK cents
1%
EPS (diluted)
20.24 HK cents
7%
Free Cash flow
HK$317 million
10%
Proposed Interim Dividend
2.0 cents
4
Profit & Loss Statement
1H2010
(HK$ million)
1H2009
(HK$ million)
Change
(%)
Revenue
55
74
 25
Subsidy Income
8
34
 77
Share of Results of Jointly-controlled Entities
122
130
7
Gain on Disposal of Interest in Luomei
Highway
41
-
 100
Profit Before Tax
178
169
5
Profit After Tax
173
162
7
EPS (Basic)
27.54 HK cents
27.84 HK cents
1
EPS (Fully Diluted)
20.24 HK cents
18.99 HK cents
7
The Group’s basic and diluted EPS is based on the weighted average no. of ordinary shares in issue of the
Company as follows:
Basic EPS : 1H2010 : 627,896,000 (1H2009 : 582,635,000 )
Diluted EPS : 1H2010 : 854,283,000 (1H2009 : 854,197,000 )
5
Revenue
Business Segment
1H2010
(HK$ million)
1H2009
(HK$ million)
Change
(%)
Toll Road Operations
4.0
5.9
 31
Property Development & Others
51.5
68.5
25
Total
55.5
74.4
 25
Property Development & Others business segment accounts for 92.8% of the total revenue in 1H2010.
Toll Road Operations contributes the balance 7.2%. Toll revenue from the Group’s toll road joint ventures are not included in Group
revenue as they are accounted for as jointly controlled entities using the equity method.
PBT
Business Segment
1H2010
(HK$ million)
1H2009
(HK$ million)
Change
(%)
Toll Road Operations
184.0
181.4
1
Property Development & Others
(6.1)
(12.1)
 50
Total
177.9
169.3
5
6
Balance Sheet Highlights & Key Financial Indicators
30 Jun 2010
(HK$ million)
31 Dec 2009
(HK$ million)
Total Assets
3,973
4,006
Shareholders’ Equity
3,861
3,817
Cash and Cash Equivalents
1,326
1,012
65
28
1,261
984
- based on issued share capital at end of the period**
HK$4.57
HK$4.59
- assuming all RCPS had been converted***
HK$4.52
HK$4.47
Return on Assets**** (%)
4.4%+
4.9%
Return on Equity***** (%)
4.5%+
5.1%
2.0
2.5
Total Debt
Net Cash* (HK$ million)
NAV per share
Dividend per share (Singapore cents)
- Interim
*
**
***
****
*****
+
Cash and cash equivalents less total debt
Net assets less redemption value of RCPS / no. of ordinary shares in issue (718 million)
Net assets after all the RCPS had been converted / no. of ordinary shares in issue (854 million)
Net Profit/Total Assets
Net Profit / Shareholders’ Equity
For half year ended 30 June 2010
7
Free Cash Flow
1H2010
(HK$ million)
1H2009
(HK$ million)
178
169
1
1
Share of results of toll road joint ventures
(122)
(130)
Other items
(60)
(18)
Working capital changes
(9)
51
Tax paid
(21)
(14)
Operating Cash Flow
(33)
59
Dividends received from toll road joint ventures
285
217
Proceeds from repayment of loans granted to toll road
joint ventures
65
75
Free Cash Flow
317
351
Profit Before Tax
Depreciation
Add
8
Traffic Volume and Revenue By Toll Road
Traffic Volume per road
1H2010
1H2009
Change
’000 Vehicles
Toll Revenue per road
1H2010
1H2009
Change
RMB million
Guiliu Expressway
2,109
1,877
12.4%
214
136
 57.1%
Guihuang Highway
9,781
8,673
12.8%
103
106
2.9%
Yuyao Highway
7,796
6,029
 29.3%
61
43
 43.4%
Total
19,686
16,579
 18.7%
378
285
 32.8%
9
PBT by Toll Road
1H2010
HK$’000
Share of
Results
Subsidy
Income
1H2009
Total
Share of
Results
Subsidy
Income
Total
Change %
Jointly Controlled Entities
Guiliu Expressway
44,440
-
44,440
46,504
26,602
73,106
 39.2
Guihuang Highway
64,888
7,875
72,763
75,675
7,249
82,924
 12.3
Yuyao Highway
12,471
-
12,471
8,093
-
8,093
 54.1
121,799
7,875
129,674
130,272
33,851
164,123
 21.0
Infrastructure Joint Venture
Luomei Highway
-
-
1,801
-
-
4,377
n.m.
Other Revenue & Expenses
-
-
11,169
-
-
12,843
n.m.
Gain on Disposal of Interest in
Luomei Highway
-
-
41,314
-
-
-
 100
121,799
7,875
183,958
130,272
33,851
181,343
 1.4
Total
10
2. Outlook
11
FY2010 Outlook
 Toll Road Business
– Will continue to deliver steady earnings this year.
 Property Development Business
– Residential property market in New Zealand remains
challenging.
12
Dividend Policy
Dividend per share (Singapore Cents)
6.00
Payout ratio
5.00
3.00
2.75
FY2009: 79%
FY2008: 55%
FY2007: 54%
FY2006: 58%
FY2005: 64%
2.75
4.00
2.25
2.00
3.00
2.00
2.50
2.75
2.75
2.75
2.50
1.00
2.00
0.00
FY2005
FY2006
FY2007
FY2008
FY2009
Interim
FY2010
Final
Company will maintain the target annual dividend payout ratio of at least 50% of CMHP’s net profit after tax for FY2010
13
3. Transaction Overview
14
Acquisition of Zhejiang Wenzhou Yongtaiwen Expressway Co., Ltd
 Acquisition of a 51% equity stake from China Merchants Group Limited (“CMG”) in Zhejiang Wenzhou Yongtaiwen
Expressway Co., Ltd (“Yongtaiwen Expressway Co”) (the “Acquisition”), which owns the rights to operate the
138km Wenzhou Yongtaiwen Expressway (Wenzhou Section) (“Yongtaiwen Expressway”) in Zhejiang Province, PRC
 Purchase consideration for the 51% equity stake is RMB 2.23 billion (HK$ 2.56 billion) while the independent
valuer's (Savills) valuation as at December 31, 2009, is approximately RMB 2.34 billion (HK$ 2.68 billion)
 CMHP intends to utilise up to approximately HK$1.0 billion of its cash reserve and raise approximately another
HK$1.5 billion via a combination of debt and equity to satisfy the purchase consideration for the Acquisition
 Bank of America Merrill Lynch and DBS Bank are the Joint Financial Advisors to CMHP in respect of the Acquisition
Transaction Structure
Before
Wenzhou
Investment
34%
CMG
51%
After
Zhejiang
Communications
15%
Wenzhou
Investment
34%
CMHP
51%
Yongtaiwen
Expressway Co
Yongtaiwen
Expressway Co
Yongtaiwen
Expressway
Yongtaiwen
Expressway
Zhejiang
Communications
15%
15
Key Approvals
 Very Substantial Acquisition (VSA): Pursuant to Rule 1006 of the SGX-ST Listing Manual, the Acquisition
constitutes a very substantial acquisition for CMHP as defined in Chapter 10 of the SGX-ST Listing Manual
 Interested Person Transaction (IPT): As China Merchants Group (CMG) is the ultimate holding company of CMHP,
the Acquisition also constitutes an interested person transaction under Chapter 9 of the SGX Listing Manual
 Approvals: CMHP needs to convene an EGM to seek independent shareholders’ approval for the Acquisition
– CMG and its associates will abstain from voting
– Independent Directors of CMHP to make recommendation to independent shareholders on the Acquisition
– Independent Directors will be advised by ANZ
 Other approvals: Relevant PRC authorities’ approvals and SGX-ST approval for the Acquisition
16
4. Target Overview
17
Background and Business Overview of Yongtaiwen Expressway Co

Yongtaiwen Expressway Co is a company incorporated in the PRC which owns the rights to operate Yongtaiwen Expressway with a
remaining concession period of approximately 20 years

Yongtaiwen Expressway is a four-lane carriageway (dual-2) located in Wenzhou Municipality, connecting with Taizhou Municipality in
the east and Fujian Province in the west

Yongtaiwen Expressway comprises the East Section (length of 63.3km) and the West Section (length of 74.9km). The expressway
commenced operations in 2002 and has approximately 20 years remaining in its concession period

The profit sharing ratio in Yongtaiwen Expressway Co is determined by the proportionate equity interest held by each equity holder
Location
Wenzhou Municipality, Zhejiang Province, PRC
No. of road sections
East Section and West Section
Length (kilometres)
Total 138.2 kilometres
(63.3 kilometres and 74.9 kilometres)
Classification
Expressway
Access control
Full Control
Direction / lanes
Design speed (km/h)
Design capacity (vehicles per day)
Concession period (years)
Year of commencement
Year of expiry
Two directions, 2 lanes each direction
80 / 100
60,000
28 years and 9 months
1 January 2002
30 September 2030
18
Overview of Wenzhou Yongtaiwen Expressway Co. Ltd
Revenue(1)
Gross Profit
(RMBmm)
800
(RMBmm)
1,200
1,000
854
940
885
600
800
600
(Margin)
65%
63.1%
539
531
577
61.4%
400
400
55%
200
200
0
0
2007A
2008A
2009A
50%
2007A
Profit Before Tax
(Margin)
50%
415
343
318
45%
400
300
44.2%
(Margin)
34%
35%
35.9%
0
30%
2008A
2009A
33.1%
311
33.0%
282
200
40.1%
2007A
2009A
(RMBmm)
500
40%
200
2008A
Net Profit
(RMBmm)
600
400
60%
60.0%
32%
30%
238
28%
26.9%
26%
24%
100
22%
0
20%
2007A
2008A
2009A
The target asset has shown good revenue and net profit growth over the past 3 years, even during the height of the financial crisis
Source: Company announcement
19
5. Transaction Rationale
20
Transaction Rationale
1
Enhanced Size and
Profitability
2
4
High Quality
of Target Asset
with Stable
Fundamentals
Strong Heritage
and Support
from Parent CMG
3
Reasonable Valuation &
EPS Accretive
21
1
Post-transaction Profile
Post-Transaction Profile
Length of Toll Roads Operated
Increase from
Acquisition: 50%
Enlarged China Merchants Holdings (Pacific) Limited
(Proforma 2009: Revenue HK$1,277mm, Total Length of Toll Roads Operated 412km,
Average Toll Road Remaining Concession Period of 16.5 Years)
Toll Road Business
Yongtaiwen Expressway - 51.0%
(Revenue HK$1,067mm, Profits before Tax HK$471mm, Length 138km,
Zhejiang Province, Remaining Concession Period of 20 Years)
Guiliu Expressway - 40.0%
(Contribution to CMHP Profits before Tax HK$92mm, Length 139km,
Guangxi Zhuang, Remaining Concession Period of 14 Years)
(km)
450
400
350
300
250
200
150
100
50
0
412
274
CMHP (Current)
Guihuang Highway - 60.0%
Average Concession Remaining
(Contribution to CMHP Profits before Tax HK$135mm, Length 39km,
Guizhou Province, Remaining Concession Period of 17 Years)
Yuyao Highway - 60.0%
(Contribution to CMHP Profits before Tax HK$16mm, Length 96km,
Zhejiang Province, Remaining Concession Period of 15 Years)
Other Businesses
Universal Homes Limited
(New Zealand) - 100.0%
(Property Development Business)
Other Companies
(New Zealand and China) - 100.0%
(Other Businesses)
CMHP (Proforma)
Increase from
Acquisition: 8.6%
(Yrs)
18
16
14
12
10
8
6
4
2
0
15.2
CMHP (Current)
16.5
CMHP (Proforma)
Source: Company website, Company filings
22
Significant Enhancement in Portfolio Size and Profitability
1
2009 Sales
Total Assets
Increase from
Acquisition: 506%
(HKDmm)
1,500
1,277
(1)
Increase from
Acquisition: 181%
11,269
(HKDmm)
12,000
10,000
8,000
1,000
6,000
500
4,006
4,000
(1)
211
2,000
0
0
CMHP (Current)
CMHP (Proforma)
CMHP (Current)
2009 Earnings
Increase from
Acquisition: 39%
(HKDmm)
400
300
200
(2)
271
CMHP (Proforma)
Fully Diluted EPS
Increase from
Acquisition: 58%
309
(HK cents)
40
(2)
195
30
Accretion: 38.8%
Accretion: 35.4%
31.75
30.98
CMHP (Plan 1)
CMHP (Plan 2)
22.88
20
10
100
0
0
CMHP (Current)
CMHP (Plan 1)
CMHP (Plan 2)
CMHP (Current)
The acquisition of the target asset would significantly enhance CMHP’s portfolio size and profitability
Source: Company filings
(1) Excludes share of associated profit
(2) Consideration financed by (i) Plan 1, internal cash (HKD1.0bn) and debt (HKD1.5bn at interest rate of 5.9%), and (ii) Plan 2, internal cash (HKD1.0bn), equity placement (HKD0.6bn 20% of issued capital placed at SG$0.81 per share) and debt (HK0.9bn at interest rate of 5.9%). Financing terms are illustrative only and may not represent actual terms
23
2
High Quality of Target Asset
Key Expressway in the Rapidly Developing Zhejiang Province
 Strategically located in Wenzhou Municipality connecting with Taizhou Municipality in the east and Fujian
Province in the west
 Part of China’s National Expressway System connecting Tongjiang of Heilongjiang Province and Sanya of Hainan
Province serving the north-south coastal traffic demand
 One of the major transportation corridors of the highway system in the region, and will benefit substantially from
the healthy trend in regional economic and vehicle population growths
 Compounded annual growth in traffic flow, revenue and profit after tax and minority interests of approximately
9.1%, 4.9% and 5.0% respectively from FY2007 to FY2009
Highlights of the Growth and Strategic Importance of Zhejiang Province
 GDP growth in average of more than 13% per annum(1) in Zhejiang Province, Wenzhou Municipality, Taizhou
Municipality, and Fujian Province, over the period of 2000 to 2009
 Total population of about 47 million and GDP of RMB 2.283 trillion in 2009
 Vehicle ownership grew in average more than 20% per annum from 2002 to 2008(2)
 Rapid growth of both the regional economy and vehicle ownership has placed a heavy demand on the
transportation infrastructure system
(1) Page 9 of Traffic Consultant’s Report - Statistic Year Books of Zhejiang and Fujian Provinces, Wenzhou and Taizhou Municipalities
(2) Page 10 of Traffic Consultant’s Report – Statistic Year Books of Zhejiang Province
24
2
Zhejiang Province Provides for Solid Industry Fundamentals
GDP(1)
Vehicle Ownership(2)
2,149
1,878
2,000
RMB (billion)
1,574
1,344
1,500
1,165
971
1,000
603
690
3.4
3.5
2,283
No. of Vehicles Owned (million)
2,500
800
500
0
3.0
3.0
2.4
2.5
2.0
2.0
1.6
1.3
1.5
1.1
1.0
0.5
0.0
2002
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
2003
Passenger Traffic(3)
1.5
1.0
0.5
0.0
1.33 1.38
1.21 1.30
1.47
1.71
Freight Volumes (million tons)
Passenger Traffic (billion)
1.95 1.99
1.57
2005
2006
2007
2008
Freight Volume(3)
2.5
2.0
2004
1,200
1,059
1,000
800
600
570
579
659
736
814
844
1,118
926
400
200
0
2000 2001 2002 2003 2004 2005 2006 2007 2008
2000 2001 2002 2003 2004 2005 2006 2007 2008
(1) Page 9 of Traffic Consultant’s Report – Statistic Year Books of Zhejiang and Fujian Provinces, Wenzhou and Taizhou Municipalities
(2) Page 10 of Traffic Consultant’s Report – Statistic Year Books of Zhejiang Province
(3) Page 21 of Traffic Consultant’s Report – Zhejiang Province Statistical Yearbook
25
Reasonable Valuation & EPS Accretive
3
Reasonable Valuation
Financial Impact (FY2009)
2009 Diluted EPS
Savills Price for 51%
RMB2,336mm
Accretion: 38.8%
(HK cents )
5% discount
Accretion: 35.4%
40
Purchase Price for
51%
RMB2,230mm
31.75
30.98
CMHP (Plan 1)
CMHP (Plan 2)
30
22.88
20

Stake sold at a 5% discount to Savills’ valuation

Reasonable purchase price of the asset can also be seen in the
reasonable multiples
10
0
CMHP (Current)
2009A P/E(1)
2009A P/NAV(1)
(x)
Peer Average: 2.0x
1.7x
1.2x
0.9x
CMHP
1.2x
Asset
2.0x
Shenzhen
Expressway
2.1x
Anhui
Expressway
2.2x
Zhejiang
Expressway
2.6x
Hopewell
Highway
12.1x
CMHP
13.6x
Anhui
Expressway
14.1x
3.0
2.5
2.0
1.5
1.0
0.5
0.0
Jiangsu
Expressway
Peer Average: 17.3x
Asset
16.6x
Hopewell
Highway
16.7x
Jiangsu
Expressway
17.7x
Zhejiang
Expressway
17.9x
Shenzhen
Expressway
Sichuan
Expressway
21.2x
Sichuan
Expressway
(x)
25
20
15
10
5
0
(1) Source: Company filings and Factset as of August 6, 2010
26
4
Strong Heritage and Support from Parent CMG
CMG







Founded in 1872, the oldest mainland China enterprise
operating in Hong Kong with a history of almost 140 years
Main business activities cover Hong Kong, China and
Southeast Asia
Top 10 state-owned enterprise in the PRC
2009 annual profit of RMB17.3bn with a year-over-year
increase of 22.6% (Ranked #7 among all central stateowned enterprises)
In 2009, consolidated total assets amounted to over
US$39bn and total assets under management of US$333bn
Main businesses include:
– Transportation and related infrastructure (Ocean
shipping, toll roads, port investment and management
and logistics)
– Banking and securities and asset management
– Property development and management
– Development of industrial parks
Major/controlling shareholder in 9 listed companies with a
combined market capitalization of US$36.4bn
Huajian Transportation Economic Development Center



Leading investor and operator of toll roads in China with
investments in 25 toll roads, bridges and tunnels with more
than 5,000 km in over 18 provinces, autonomous regions
and municipalities (~8% market share of China’s highway
market)
Investments in 14 listed toll roads companies
Indirect controlling shareholder of CMHP, the largest toll
road company listed on the Singapore Stock Exchange
27
6. Financing Structure & Impact on CMHP
28
Purchase Consideration and Indicative Financing Structure(1)
 Plan I: The Transaction will be funded by internal cash and debt financing
 Plan II: Part of the debt will be replaced by equity through an Equity Fund Raising (EFR)
The financing terms herein are illustrative only and may not represent the actual terms
Funding Requirement
Plan I: Cash + Debt
Plan II: Cash + Debt + Equity
HK$1,000m
HK$1,000m
Internal cash
Internal cash
HK$2,533m
Acquisition of 51% stake in
Wenzhou Yongtaiwen Co
HK$889m
HK$1,533m
Debt
Debt
HK$644m
Equity(2)
(1) Figures taken from the “pro forma financial effects” section of the announcement
(2) Assumes 144m (20%) Share Placement at S$0.81 per share, being the fully diluted NAV per share as at 31 December 2009
29
Financial Impact from Financing Structure
Total Debt/Total Capitalization(1)
Total Debt/EBITDA(1)(4)
(x)
(%)
60%
40%
(2)
3.8x
(2)
3.2x
38.9%
(2)
32.5%
3x
(2)
2x
30%
20%
1x
10%
0.1x
1.0%
0x
0%
CMHP (Plan 1)
CMHP (Plan 2)
CMHP (Plan 1)
CMHP (Current)
EBITDA/Interest Expense(1)(4)
50x
CMHP (Current)
Shareholding Structure
Current
Shareholding
Structure
(x)
60x
CMHP (Plan 2)
48.2x
40x
CMH
82%
Public
18%
Plan I
CMH
82%
Public
18%
5.6x
10x
(2)
4.6x
(2)
0x
CMHP (Current)
CMHP (Plan 2)
CMHP (Plan 1)
Shareholding Structure
20x
(Fully diluted with full RCPS
conversion)
30x
CMH
85%
Public
15%
CMH
85%
Public
15%
Plan II
CMH
69%
Public
31%
CMH
73%
Public
27%
Assumes 144m (20%)
Shares Placement for Plan II
50%
4x
The acquisition of the target asset would significantly enhance CMHP’s portfolio size and profitability
Source: Company filings
(1) Accounted for on a fully consolidated basis
(2) Consideration financed by (i) Plan 1, internal cash (HKD1.0bn) and debt (HKD1.5bn at interest rate of 5.9%), and (ii) Plan 2, internal cash (HKD1.0bn), equity placement (HKD0.6bn 20% of issued capital placed at SG$0.81 per share) and debt (HK0.9bn at interest rate of 5.9%). Financing terms are illustrative only and may not represent actual terms
(3) Free cash flow is calculated as operating cash flow plus investing cash flow
(4) Consolidated EBITDA includes contributions from JCEs in the form of dividend distribution and consolidates 100% of Target EBITDA
30
7. Conclusion
31
CMHP is a Unique and Attractive Investment
Healthy dividend play and strong earnings growth potential
Solid fundamentals of the PRC toll road industry
Quality toll road assets and experienced management team
Continued and strong support from CMG
32
Thank you
33
Disclaimer
This presentation may contain forward-looking statements regarding, among other things, the Company’s outlook,
business and strategy which are current as of the date they are made. These forward-looking statements are
subject to risks and uncertainties that could cause actual results to differ materially from such statements. You are
cautioned not to place undue reliance on these forward-looking statements which are based on the current views
of Company’s Management on future developments and events.
34