Company Profile

Huabei Expressway Co., Ltd. is engaged in the investment and development, construction, andoperation of expressway tolls. It offers car repair services, vehicle and machinery equipment leasingservices, and consulting services. The company was founded on July 2, 1999 and is headquartered inBeijing, China.

China Merchants Expressway Network & Technology Holdings （“China Merchant Expressway”） is goingto be listed in Shenzhen Stock Exchange through stock conversion with Huabei Expressway. Share pricesof Huabei Expressway and China Merchant Expressway are CNY 5.93 per share （CNY 5.69 per shareex‐dividend） and CNY 8.41 per share （CNY 8.18 per share ex‐dividend, 16x PE and 1.2x PB）。

Shareholders of Huabei Expressway who chose to take cash can sell at CNY 4.73 per share （CNY 4.49per share ex‐dividend）。

China Merchants Expressway Network & Technology Holdings owns stakes in 13 listed A‐shareexpressway companies which value at CNY 27.95 billion. It manages 112 expressways and bridges（8203 miles） in 18 provinces and municipalities. The Company also provides engineering consultancyand construction services.

China Merchants Expressway made CNY 5 billion in revenue in 2016 （three‐year CAGR registers 6.5%）。

The net profit stood at CNY 3.9 billion （three‐year CAGR registers 5.6%）。 Returns from investmentswas CNY 2.6 billion last year （three‐year CAGR registers 7.7%）。

Investment Strategy: We believe valuation of the Company is reasonable. And considering assetliabilityratio is only 21% and parent group’s endorsement, we are optimistic about its growthpotential.

Potential Risks: review of shareholders conference and CSRC.