(Incorporated in Hong Kong under the Companies Ordinance)



The Board of Directors of China Travel International Investment Hong Kong Limited (the "Company") is pleased to announce that the audited consolidated results of the Company and its subsidiaries (the "Group") for the year ended 31 December 2000 are as follows:

                                                          2000        1999
                                           Notes       HK$'000     HK$'000

TURNOVER                                    (1)      2,751,390   2,766,954
Cost of sales                                       (1,516,032) (1,702,886)
                                                    ----------  ----------
Gross profit                                         1,235,358   1,064,068

Other revenue                                          130,729     124,993
Distribution costs                                     (32,440)    (44,838)
Administrative expenses                               (375,669)   (331,174)
Other operating expenses                               (54,026)    (97,940)
Provisions for doubtful debts and
  bad debts written off                                (37,155)    (63,055)
                                                    ----------  ----------
PROFIT FROM OPERATING ACTIVITIES        (1) and (2)    866,797     652,054

Finance costs                                         (151,831)   (184,993)

Provision for impairment in an associate               (56,152)          -
Loss on deemed disposal of an associate                (62,767)          -
Provisions for diminutions in values of
  interests in jointly controlled entities
  and associates                                       (13,131)     (2,553)
Gain on disposal of an associate                             -      60,549

Share of profits and losses of:
  Jointly controlled entities                            5,566        (597)
  Associates                                           (52,855)     13,489
                                                    ----------  ----------
PROFIT BEFORE TAX                                      535,627     537,949

Tax                                         (3)       (104,446)    (71,734)
                                                    ----------  ----------
PROFIT BEFORE MINORITY INTERESTS                       431,181     466,215

Minority interests                                    (280,262)   (216,083)
                                                    ----------  ----------
  ATTRIBUTABLE TO SHAREHOLDERS                         150,919     250,132

Dividends                                   (4)       (130,044)    (65,022)
                                                    ----------  ----------
RETAINED PROFIT FOR THE YEAR                            20,875     185,110
                                                    ==========  ==========
TRANSFER TO RESERVES                        (5)         82,112       4,951
                                                    ==========  ==========
EARNINGS PER SHARE (CENTS)                  (6)
  Basic                                                   4.64        7.69
                                                    ==========  ==========
  Diluted                                                  N/A        7.44
                                                    ==========  ==========


(1) Turnover and contribution to profit from operating activities by principal activity and geographical segment

                                                          Contribution to
                                                            profit from
                                         Turnover            activities
                                       2000       1999      2000      1999
                                    HK$'000    HK$'000   HK$'000   HK$'000

Originating in The People's
  Republic of China
  Hong Kong:
    Hotel operations                225,927    204,660    35,936     9,404
    Tour operations                 243,270    264,011    91,796   116,390
    Passenger transportation         55,764     56,531     7,053     2,449
    Freight forwarding and
      transportation services       244,912    236,358   (11,370)  (50,547)
    Treasury operations                   -      3,893   (12,243)    7,114
                                  ---------  ---------  --------  --------
                                    769,873    765,453   111,172    84,810
                                  ---------  ---------  --------  --------
    Passenger transportation         22,218          -     3,920         -
    Freight forwarding and
      transportation services        52,999     31,715    12,150     7,822
    Tourist attraction operations   432,733    369,134   159,328    72,226
    Power generation              1,439,641  1,576,741   559,110   556,545
    Golf club management and
      membership sale                33,926     23,911    (7,136)  (30,258)
                                  ---------  ---------  --------  --------
                                  1,981,517  2,001,501   727,372   606,335
                                  ---------  ---------  --------  --------
                                  2,751,390  2,766,954   838,544   691,145
                                  =========  =========
Interest income less
  unallocated corporate
  administrative expenses                                 28,253   (39,091)
                                                        --------  --------
                                                         866,797   652,054
                                                        ========  ========

(2) The Group's profit from operating activities is arrived at after charging/(crediting):

                                                         2000        1999
                                                      HK$'000     HK$'000

  Owned fixed assets                                  450,985     493,561
  Leased fixed assets                                     556           -
                                                     --------    --------
                                                      451,541     493,561
                                                     --------    --------
Gain on disposal of long term investment              (10,261)          -
Loss/(gain) on disposal of short term investments        (502)      8,879
Interest income                                       (56,121)   (115,703)
Loss/(gain) on changes in fair value of
  short term investments                                6,215      (9,627)
Provisions for impairments in values of
  short term investments                                6,174           -
                                                     ========    ========

(3) Tax

                                                  2000        1999
                                               HK$'000     HK$'000
  The People's Republic of China:
    Hong Kong                                  (14,135)    (15,911)
    Elsewhere                                  (58,843)    (44,006)
  Over/(under) provisions in prior years       (19,625)      2,583
  Deferred tax                                  (9,231)    (13,665)
                                              --------    --------
                                              (101,834)    (70,999)
                                              --------    --------
Jointly controlled entities                       (937)         (5)
Associates                                      (1,675)       (730)
                                              --------    --------
                                                (2,612)       (735)
                                              --------    --------
Tax charge for the year                       (104,446)    (71,734)
                                              ========    ========

Hong Kong profits tax has been provided at the rate of 16% (1999: 16%) on the estimated assessable profits arising in Hong Kong during the year. Taxes on profits assessable elsewhere have been calculated at the rates of tax prevailing in the countries in which the Group operates, based on existing legislation, interpretations and practices in respect thereof.

Deferred tax is provided, using the liability method, on all significant timing differences to the extent it is probable that the liability will crystallize in the foreseeable future.

(4) Dividends

                                                             2000     1999
                                                          HK$'000  HK$'000

Interim - 1 cent (1999: 1 cent) per ordinary share         32,511   32,511
Proposed final - 1 cent (1999: 1 cent) per ordinary share  32,511   32,511
Proposed special dividend - 2 cents (1999: Nil) per
  ordinary share                                           65,022        -
                                                          -------  -------
                                                          130,044   65,022
                                                          =======  =======

(5) Transfer to reserves

                                             2000       1999
                                          HK$'000    HK$'000

Enterprise expansion reserve funds          9,914      4,951
Capital reserve                            72,198          -
                                          -------    -------
                                           82,112      4,951
                                          =======    =======

Pursuant to the relevant laws and regulations for Sino-foreign joint venture enterprises, a portion of the profits of the Group's subsidiaries in the PRC has been transferred to enterprise expansion reserve funds which is restricted as to use.

Due to dilution of shareholding in an associate, a portion of profits has been transferred to capital reserve which is restricted as to use.

(6) Earnings per share

The calculation of basic earnings per share is based on the net profit attributable to shareholders for the year of HK$150,919,000 (1999: HK$250,132,000), and 3,251,115,027 (1999: 3,251,115,027) ordinary shares in issue during the year.

No diluted earnings per share for the year ended 31 December 2000 has been presented because the conversion of the convertible notes would have an anti-dilutive effect and the Company's share options did not have a dilutive effect.

For the year ended 31 December 1999, the calculation of diluted earnings per share was based on the net profit attributable to shareholders for the year of HK$273,820,000, after adjustment for the interest saved upon deemed conversion of all convertible notes at beginning of the year. The weighted average number of shares used in the calculation are 3,251,115,027 shares in issue during the year, as used in the basic earnings per share calculation, and the weighted average of 427,272,727 ordinary shares assumed to have been issued on the deemed conversion of all of the convertible notes at beginning of the year. The Company's share options did not have a dilutive effect and, accordingly, were not included in the calculation of the diluted earnings per share.

(7) Comparative figures

Certain comparative figures have been re-classified to conform with current year's presentation.


The Board of Directors has resolved to recommend the payment of a final dividend of HK1 cent (1999: HK1 cent) per ordinary share for the year ended 31 December 2000. As the operating profit of the Company increased significantly, the Board of Directors has resolved to recommend the payment of a special dividend of HK2 cents per ordinary share (1999: N/A) for the year ended 31 December 2000 to enhance shareholders' returns. The payout reflected careful consideration of the Company's current and future capital requirements, and the interests of shareholders. It should not be taken as an indication of a regular distribution. Subject to the approval of the shareholders as regarded to the proposed payment of the dividends at the forthcoming Annual General Meeting to be held on 1 June 2001 (Friday), the proposed dividends will be paid on 29 June 2001 (Friday).


Considering the interests of the shareholders, the Board of Directors believes that a bonus issue ("Bonus Issue") of warrants ("Warrants") will benefit the Company and its shareholders as a whole.

The Bonus Issue will be made in the proportion of one Warrant for every five ordinary shares of HK$0.10 each ("Share(s)") held by shareholders (other than those whose registered addresses are outside Hong Kong) whose names appear on the Register of Members of the Company on 1 June 2001 (Friday). The Warrants will entitle holders thereof to subscribe for Shares at an initial subscription price of HK$1.22 per Share (subject to adjustment) from 3 July 2001 to 30 June 2003 (both dates inclusive). The Warrants will be traded in board lots of 20,000 units entitling the holders thereof to subscribe HK$24,400 for 20,000 Shares based on an initial subscription price of HK$1.22 per Share (subject to adjustment). The Warrants will be issued in registered form. Fractional entitlements will not be allotted but will be aggregated and sold for the benefit of the Company. On the basis of the 3,251,115,027 Shares in issue as at the date hereof, 650,223,005 new Shares, representing 20% of the issued share capital of the Company, would be issued upon exercise of all subscription rights attaching to the Warrants at the initial subscription price of HK$1.22 per Share, subject to adjustment in accordance with the terms of Warrants. New Shares issued on the exercise of subscription rights under the Warrants will rank pari passu in all respects with the then existing Shares on the relevant subscription date.

The Bonus Issue is conditional upon:-

(i) the passing of an ordinary resolution by shareholders of the Company to approve the creation and issue of the Warrants and the issue of any new Shares which may fall to be issued upon exercise of the subscription rights attaching to the Warrants at an extraordinary general meeting of the Company proposed to be held immediately after the conclusion of the annual general meeting of the Company on 1 June 2001; and

(ii) the Listing Committee of The Stock Exchange of Hong Kong Limited ("Stock Exchange") granting listings of, and permission to deal in, the Warrants and any new Shares which may fall to be issued upon exercise of the subscription rights attaching to the Warrants.

Application will be made to the Listing Committee of the Stock Exchange for listings of and permission to deal in the Warrants and the Shares which may fall to be issued upon the exercise of the subscription rights attaching to the Warrants.

The expected date of issue and despatch of the Warrant certificates is 29 June 2001.

A circular containing further details regarding the Bonus Issue will be despatched to shareholders of the Company as soon as practicable.


The Register of Members of the Company will be closed from 28 May 2001 (Monday) to 1 June 2001 (Friday), both days inclusive, for the purposes of determining (i) entitlements to the proposed final and special dividends; and (ii) entitlements to the proposed Bonus Issue. In order to qualify for the proposed final and special dividends and the proposed Bonus Issue, all transfer documents accompanied by the relevant share certificates must be lodged with the Company's Registrar, Tengis Limited, at 4/F., Hutchison House, 10 Harcourt Road, Central, Hong Kong not later than 4:00 p.m. on 25 May 2001 (Friday).


The overall business of the Group has improved from last year. This is attributable to the excellent operating results achieved by the three theme parks in Shenzhen, the substantial improvement in passenger traffic and results of the cross-border bus operations, the increase in both the occupancy rate and room rate of the Group's hotels, the noticeable improvement in the operating results of the golf club operation, the maintaining of operating results of the freight forwarding business as last year's, the profit, and cash flow contribution from the Group's investment in the power plant, and significant increase in the number of Mainland visitors received by the Hong Kong & Macau Tour which broke the 200,000 threshold for the first time. The Group has also improved its management quality and enhanced the competitiveness of its business, while maintaining a sound financial position.

Tour Operation and Leisure Business

The three theme parks of the Group in Shenzhen, namely Window of the World, Splendid China and China Folk Culture Villages, attracted more than 4.5 million visitors in 2000, which is an increase of 13.9% as compared with last year. During the year, Window of the World had undergone comprehensive upgrading and restructuring to its facilities. It has introduced new games and attractions such as the Alps Indoor Ski Dome, the Grand Canyon Flume Ride and the Pyramid Fantasy Hall which combined hi-tech and entertaining effects, and resulted in an increase in operating profit by 68%. By bringing out intellectual, entertaining and participatory games and programs such as the Flight by Ropeway, the Drifting River, the Kerqin Grass skiing and the Mysterious Tibet, and strengthening promotional efforts in the overseas markets, Splendid China and China Folk Culture Villages had recorded growth in the visitor number by 14.8% and the operating profit by 47% during the year.

In 2000, the three theme parks were also rated Class I "Quadruple A" theme parks in the People's Republic of China ("PRC") and earned acclaims from local and overseas visitors.

Renowned for its high quality and professional services, China Travel (HK & Macau Tour) Management Hong Kong Limited ("HK & Macau Tour") received more than 200,000 Mainland visitors in 2000, which is an increase of 25.4% as compared with last year, despite operating under fierce market competition. In the latter half of 2000, HK & Macau Tour had responded to the challenge by implementing measures such as strengthening its cooperation with the tour travel agencies in the PRC, especially in the Guangdong province, to promote sales, control costs, and enhance quality of services rendered.

Shenzhen Tycoon Golf Club ("Tycoon Club"), which operates a 27-hole golf course with comprehensive club facilities, is situated near the Shenzhen Huangtian Airport and the Shenzhen Fuyong Terminal. In 2000, the management had focused their efforts to promote the club, improve quality of services rendered, streamline staff, and utilize the available resources effectively. As a result, in 2000, the turnover and number of visitors increased by 41.9% and 29%, respectively.

Passenger Transportation

China Travel Tours Transportation Services Hong Kong Limited ("CT Tours"), which owns 60 buses, served approximately 578,000 passengers in 2000, which is an increase of 47.9% as compared with last year. The five main routes running between Hong Kong International Airport and various Mainland cities, and between Shenzhen and Zhuhai have achieved good financial results. By improving its market share, safety procedures and continuous replacement program with new buses, CT Tours is seeking to expand in this highly competitive market.

Shun Tak-China Travel Shipping Investments Limited ("Shun Tak-CTS"), an assoicate of the Group, recorded an increase of 11.6% in passenger traffic on the Hong Kong-Macau route in 2000 and commanded a market share of 92%. Shun Tak-CTS also recorded an increase of 4.9% in passenger traffic on the Shenzhen and Guangzhou routes. Despite the adverse impact of high fuel cost and increasing operating cost, Shun Tak-CTS had managed to increase its profit by approximately 260% when compared with last year.

Hotel Operation

The Group's three wholly-owned hotels, namely The Metropole Hotel, Hotel New Harbour and Hotel Concourse, had seized the opportunities brought by the economic recovery of Hong Kong and the increasing number of tourist arrival to develop new customer sources, control costs and increase its room rate accordingly. The average occupancy rate of the three hotels was 86% in 2000, which is an increase of 2.0% over 1999. The average room rate had also increased by 14.1% in 2000. Both of these factors contributed to the significant improvement in earnings during the year.

Metropark Hotel of the Group in Causeway Bay, which is currently under construction, is a four-star hotel with seaview and the view of the Victoria Park. Metropark Hotel is expected to commence operation in late 2001.

Freight Forwarding

Due to the improving expressway networks and deep harbour facilities in the PRC, re-export freight volume, especially through railway, handled by Hong Kong for the PRC has continued to decline. Faced with fierce competition, China Travel Service (Cargo) Hong Kong Limited ("CTS Cargo") has still managed to command more than 50% market share in export freight volume through railway in Hong Kong by strengthening its marketing development and enhancing its quality of service. CTS Cargo has also devoted significant efforts to develop air freight, sea freight and courier services, principally by way of organizing a marketing sales team working through its PRC branches. China Trading Service Co., Ltd., which is a subsidiary of CTS Cargo, has actively developed its modern logistics business in Shanghai and recorded satisfactory results.


The total volume and on-grid volume of electricity generated by Shaanxi Weihe Power Plant in 2000, a jointly controlled entity of the Group, were 5.97 billion kWh and 5.61 billion kWh, respectively, which were comparable with last year. Due to the strengthening of management control and the implementation of a performance incentive system, the production cost had decreased significantly, the ratio of normal operation of the generating units had improved, which also reduced the repairs and maintenance work on its generating units during the year. As a result, Weihe Power Plant has become a leading enterprise in the power industry in the northwestern region of the PRC. The net profit of Weihe Power Plant increased by 26.9% in 2000 and provided significant profit contribution and cash flows to the Group.

The Group had disposed of its entire 23% interest in Vision Century Corporation Limited (formerly known as Hing Kong Holdings Limited) in February 2001. In March 2001, the Group also entered into a conditional sale and purchase agreement to dispose of its investment in a joint venture which holds interests in road and bridge projects in the PRC to its controlling shareholder, China Travel Service (Holdings) Hong Kong Limited. The disposal of such non-core businesses has clarified the core travel business of the Group but also increased cash flow. After the disposal, Weihe Power Plant will be the only non-core business left in the Group.

The Company believes that with the continuous development of the PRC economy, the imminent entry of China into the World Trade Organization, the recovery in the economy of Hong Kong, and the business restructuring and reengineering of the Group, especially after the completion of the proposed acquisition of China Travel Service (Hong Kong) Limited ("CTS HK"), the core travel business of the Group will develop rapidly. The travel related businesses such as the theme parks, passenger transportation and hotels will benefit and the competitiveness of the businesses of the Group can be enhanced further. In addition, the tourism industry in the PRC has been developing rapidly with great market potentials, and it has become the leading industry amongst tertiary industries in the PRC. In 2000, the international tourism receipts and domestic tourism expenditure in the PRC reached United States dollars 16.2 billion and Renminbi 317.6 billion respectively. Through acquiring CTS HK and other mergers and acquisitions, the Group will actively explore opportunities to expand its tourism operation and create profit generating channels in the PRC. We are confident in the future prospect of the Group.


Neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company's listed securities during the year.


A full audited annual results announcement containing all information required by paragraph 45(1) to 45(3) of Appendix 16 to the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (the "Stock Exchange") will be published on the Stock Exchange's website at http://www. on or before 30 April 2001.

By Order of the Board
Shen Zhuying
Managing Director

Hong Kong, 25 April 2001

Source: China Travel International Investment Hong Kong Limited
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