FAQ1. What are the Company's principal activities?
The Company operates a predominantly rail-based transportation system in Hong Kong, comprising Domestic and Cross-boundary services, a dedicated high-speed Airport Express railway and a light rail system. The entire system stretches 231 km and has 93 stations and 68 Light Rail stops and it is one of the most intensively used in the world, and its reliability, safety and efficiency are held in high regard. The Company also provides intercity services to and from the Mainland of China as well as a small bus operation in Hong Kong offering convenient feeder services.
The Company leverage on its Hong Kong railway assets and expertise in other businesses, including rental of station retail space, advertising in trains and stations and telecommunications.
In Hong Kong, the Company develops for sale mainly residential properties in conjunction with property developers. The Company holds investment properties, principally shopping malls and offices, managing these and other properties. Our investment portfolio primarily includes shopping malls and 18 office floors of the Two International Finance Centre office tower. The Company also engages in cable car operations, the Octopus card payments system, consulting and project management.
The Company have invested in and operated rail networks and related property developments in the Mainland of China, and operated rail concessions in the UK, Sweden and Australia. The Company will focus on successfully delivering our newly awarded businesses and continue prudently to pursue new railway and rail-related business opportunities that will generate incremental benefits to our shareholders.2. What is the Company's relationship with the Hong Kong SAR Government?
Following the partial privatisation and public listing of the Company on the Hong Kong Stock Exchange in October 2000, the Hong Kong SAR Government now owns around 75% of the Company. The Government has pledged to continue to hold at least 50% shareholding in the Company for at least 20 years from the date of the IPO, and to provide the same support to the Company as before the privatisation.
Despite its majority ownership by the Government, the Company is independently managed on commercial principles. It is financially independent and does not rely on any subsidy from the Government.3. Does the Company require Government or legislative approval to change its fares?
Fare setting is in accordance with the "Fare Adjustment Mechanism" (FAM) which is a direct-drive formula linked to changes in consumer price index and wage index as well as a pre-determined productivity factor. Review of the FAM will be conducted every five years.
Fare Adjustment = 0.5 x ˇµCCPI + 0.5 x ˇµ wage index ˇV t
- ˇµCCPI: the yearly percentage change in the Government Composite Consumer Prices Index;
- ˇµWage index: the yearly percentage change in the Nominal Wage Index (Transportation Sector);
- t = productivity factor (t= 0, from 2017/18 to 2022/23)
Special application from 2017/18 to 2022/23,
- The calculated fare adjustment rate will be reduced by 0.6% each year from 2017/18 to 2022/23;
- A one-off 10% discount will be applied to the reduced overall fare adjustment rate for 2017/18
The Company's strategy is to help establish new communities along the routes of its railway through the development of substantial properties at the sites of its stations. This has led to more effective integration between its railway and property developments, increased catchment and passenger flows for the railway, and enhanced investment returns.
In property developments, the Company will enter into partnerships with reputable developers whereby the developers will bear all development costs, including land premium and construction costs, and therefore all development risks. The Company will supervise construction of the projects and profit sharing will be either in form of percentage of profits or assets in kind.5. Does the Hong Kong SAR Government guarantee debts issued by the Company?
The Company has its own credit ratings, which are on par with the Hong Kong SAR Government. Its debts are not guaranteed by the Hong Kong SAR Government.6. Who should I contact for questions relating to my shareholdings such as transfer of shares, change of name or address, and lost of share certificates?
Any matters relating to your shareholding, such as transfer of shares, change of name or address, and loss of share certificates should be addressed in writing to the Registrar:
Computershare Hong Kong Investor Services Limited
17M Floor, Hopewell Centre
183 Queen's Road East, Wan Chai, Hong Kong
Tel: (852) 2862 8628
Fax: (852) 2529 6087