Business and Financial Review

Information Services

CITIC Limited provides services in two areas: one is telecommunications, covering mobile sales & services, Internet services, international telecommunications services, enterprise solutions and fixed line services operated by CITIC Telecom International; the other is the leasing and sale of satellite transponders operated by AsiaSat.

CITIC Telecom International covers international telecommunications services including mobile, Internet, voice and data services, and integrated telecoms services in Macau. Through its wholly- owned subsidiary CITIC Telecom International CPC Limited (“CPC”), it has also established numerous Points of Presence around the world, especially in Asia providing data and telecoms services, namely VPN, Cloud, network security, co-location and Internet access, to multinational corporations. CPC is one of the most trusted partners of leading multinational and business enterprises in APAC.

CITIC Telecom International holds a 99% equity interest in Companhia de Telecomunicações de Macau, S.A.R.L. (“CTM”). CTM is one of the leading integrated telecoms services providers and the only full telecoms services provider in Macau. It has long provided quality telecoms services to the residents, government and enterprises of Macau and plays an important role in its ongoing development.

AsiaSat’s business involves the leasing and sale of satellite transponders, broadcasting, communications and data uploading and downloading services.

Infrastructure

CITIC Limited’s infrastructure business is involved in the investment and management of expressways and port terminals in China through CITIC Industrial Investment. It also has an interest in The Western Harbour Tunnel in Hong Kong through CITIC Pacific.

Expressway projects, in which CITIC Industrial Investment has three interests — the Chengdu- Chongqing Expressway, Chongqing-Guizhou Expressway and Shanghai-Chongqing Expressway — have a combined cumulative distance of 283km. With extensive operational experience in the sector, CITIC Industrial Investment has set up an investment, construction management and operation team with rich experience and strong execution capabilities. Furthermore, good cooperation has been formed with partners and local government of Chongqing. In the future, new projects will focus on upstream and downstream of the highway industry, domestic and overseas infrastructure and PPP projects.

The port terminals business mainly consists of investment in and the proprietary operation of liquefied oil terminals and storage, as well as the operation of other types of berths, such as container berths. CITIC Industrial Investment’s objective in this business is to become a major investor in and operator of port terminals and storage facilities in the domestic port terminal industry. Investment in liquefied oil, the main line of CITIC Industrial Investment’s business, will concentrate in Yangtze River Delta, Pearl River Delta, Bohai Economic Rim, and Yangtze River Economic Belt.

General Trading

Dah Chong Hong (“DCH”) is engaged in the trading, distribution and logistics business. The company is involved in the sale of motor vehicles and associated services, food and consumer products, as well as the provision of logistics services. The preferred partner of over 1,000 brands in more than 30 countries and regions, DCH has well-established networks in Asia Pacific.

In 2016, DCH acquired Li & Fung’s consumer and healthcare distribution business, diversifying its product lines and portfolio in growing areas of consumer demand.

Environmental Services

CITIC Environment Investment Group (“CITIC Environment”) is CITIC Limited’s specialised investment and operational platform in the field of environmental protection. It specialises in three major sectors, namely water, solid waste treatment and energy saving services.

In 2015, CITIC Environment successfully acquired Singapore’s leading water treatment company United Envirotech Ltd (“UEL”) and became the controlling shareholder of UEL. This latter company was renamed CITIC Envirotech Ltd (“CITIC Envirotech”) in June of the same year. In 2016, CITIC Environment brought in a new strategic investor for CITIC Envirotech — China Reform Fund, which is now the second largest shareholder of CITIC Envirotech. As of the end of 2016, CITIC Environment had won 21 projects in form of EPC, BOT, and TOT in China and major economies along the Belt and Road, of which the total investment is approximately RMB4.6 billion. The company’s water treatment plants during this period had a combined daily treatment volume of over 5 million tonnes. CITIC Envirotech also made breakthroughs in many other areas, including winning its first circular economy PPP project in an industrial park in Shantou, Guangdong, its first PPP river remediation project in Yixing, Jiangsu, and its first project for the harmless disposal of sludge and hazardous waste in Weifang and Rizhao, Shandong. In membrane technology, it embarked on the research and application of nanofiltration and reverse osmosis, starting to extend its business to the overseas market, especially European and American market.

In 2016, CITIC Environment made progress on multiple fronts. In the area of waste-to-energy, for example, it became the second largest shareholder of Chongqing Sanfeng Environmental Industrial Group Co., Ltd after acquiring 13.58% of its shares. In addition, it started the strategic development in solid waste treatment sector, such as soil remediation.

Modern Agriculture

CITIC Agriculture Investment is a platform for CITIC Limited to invest in the agricultural industry. It integrates science, technology and agricultural services in China to improve their standards. It is also committed to investing in and cultivating cooperation agreements with leading enterprises in the international industry.

In January 2016, CITIC Limited officially became the largest and controlling shareholder of Yuan Longping High-tech Agriculture Co., Ltd (“Longping High-tech”). Longping High-tech is one of the major companies in China producing grain, vegetable and fruit seeds and is a leader in the breeding and distribution of hybrid rice, all with the aim of becoming “the flagship of Chinese seed companies in the global market” in 10 years. In June 2016, CITIC Agri Fund Management Co., Ltd. was jointly established by CITIC Agriculture, Longping High-Tech and two other listed agricultural companies. CITIC Agri Fund (Limited Partnership) is the first domestic partnership established by CITIC Agri Fund Management Co., Ltd. to invest in the core value of agriculture.

Publishing

CITIC Press is a large-scale and influential integrated cultural services provider in China, principally engaged in book publishing, digital publishing, education and training, bookstore retailing and investment in other cultural activities. It also offers high-quality content and creative services for customers. CITIC Press has obtained all licenses issued by the State Administration of Press, Publication, Radio, Film and Television for its publication, distribution and retail operations.

CITIC Press was officially listed on the National Equities Exchange and Quotations at the end of 2015, becoming the first listed state-owned company in the publishing industry.

General Aviation

The main businesses of CITIC Offshore Helicopter (“COHC”) include offshore oil helicopter operation services, general aviation services such as aerial photography, maritime patrol, polar survey operations, HPS, forest fire prevention and powerline operations, as well as general aviation maintenance. COHC’s offshore oil helicopter services have maintained the top position in the industry in terms of market share. It is the only general aviation enterprise engaged in helicopter pilotage.

COHC’s main operation is based in Shenzhen, with branches in the South China Sea, East China Sea, Bohai Sea, Yangtze River Delta, Pearl River Delta and Beijing-Tianjin-Hebei, as well as Northeast China and Southwest China. COHC also operates the service centre of Airbus Helicopters in China.