Chu Kong Shipping

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About

A major player in river trade transportation between Hong Kong and Pearl River Delta Region, the PRC with its business covering container transportion, shipping agency, cargo forwarding and wharf cargo handling.

Chu Kong Shipping Development Co., Ltd. ("CKSD") traces its roots to its parent holding company, Chu Kong Shipping Enterprises (Holdings) Company Limited ("CKSE"), which was established in 1962 in Hong Kong as a wholly owned subsidiary of Guangdong Province Navigation Holdings Company Limited ("GPNHC"). GPNHC is one of the key provincial government-owned enterprises with its main businesses including passenger ferry services, warehousing, ship repairing and other related businesses in Guangdong Province. CKSE was initially the exclusive shipping agent in Hong Kong for vessels registered in Guangdong, Fujian and Guangxi, with a registered capital of HK$50,000. After 40 years of operations, it has become an integrated enterprise that not only specializes in shipping but also diversified into finance, trading, real estate development and infrastructure building. Its total asset has reached HK$2.9 billion, and it has become a miracle business success story. In September 1996, CKSD was established by CKSE to take over its river trade transportation business, including its shipping agency, river cargo direct shipments and transshipments, wharf cargo handling (including mid-stream operations), cargo consolidation and godown storage as well as container hauling and trucking operations in Hong Kong. CKSE also injected a 25% equity interest in Guangzhou Foshan Expressway Ltd. ("Guangfo Company") into the Group as strategic investment. In May 1997, CKSD successfully listed its shares on The Stock Exchange of Hong Kong Limited (Stock Code: 560); CKSE has held a 75% equity interest in CKSD since its listing. This listing was a corporate milestone for CKSD and an integral part of its expansion plans. With its listing, the Company had entered a new era of capital and business integration, while forming strong foundations for its future development. A Major Player In River Trade Transportation Industry Guided by its customer-oriented philosophy to provide seamless and first-class services to clients, CKSD has continued to expand its business network in the Pearl River Delta. Through a series of acquisitions after its listing, CKSD currently holds interests in nine river trade container terminals with ownership ranging from 25% to 55%. These container terminals cover major cities in the Pearl River Delta such as Dongguan, Foshan, Sanshui, Nanhai, Heshan, Sanbu, Gaoming, Deqing and Qingyuan among others. At the same time, CKSD operates a private wharf located in Tuen Mun, Hong Kong, comprising of two berths, a 380,000 square feet warehouse and a fleet of 50 tractors. In March 2001, CKSD also obtained the operating rights for the Marine Cargo Terminal at the Hong Kong International Airport. With this wide range of facilities and services, CKSD is by far the most significant operator in the Pearl River Delta. While developing its wharf networks, CKSD has also established over 20 representative offices in the Pearl River Delta, covering the major cities in the region. These offices principally engage in sea transport, inland transport, air cargo imports & exports. They also act as international shipping agents, at the same time, providing services such as booking, customs clearance, insurance and documentation among others. In addition, these offices perform various supporting functions, and have earned CKSD a brand reputation for providing services that are "accurate, prompt, efficient and of top quality". Through a series of acquisitions and expansions, CKSD has successfully set up an efficient and reliable transportation system. Every aspect of river trade transportation has been integrated into the system to ensure that services offered to customers are second to none. Together with prudent management policies, sophisticated information technology and experienced staff, CKSD will continue to strengthen its leading position in the river transportation industry. Operating Strategy While developing and expanding its investments in the river trade business and wharves in the Pearl River Delta, CKSD has also captured the tremendous business opportunities brought about by the rapid development of Shenzhen's Ports in recent years. On the one hand, CKSD has extended its cargo transportation networks to Shenzhen. On the other, it has entered a partnership with Shenzhen Yantian Port Company Limited to provide container transportation and distribution services in the Shenzhen area. These initiatives have provided an opportunity for CKSD to offer its customers a broader range of services with greater flexibility. In an effort to expand into the fast growing air cargo transportation industry, the company has worked closely with Hong Kong Air Cargo Industry Services Limited ("HACIS"), successfully obtaining the operating rights of the Marine Cargo Terminal at the Hong Kong International Airport. Although the current operating environment is difficult, the business in air cargo transportation continues to grow steadily. In January 2002, CKSD and its wholly owned subsidiaries received ISO9001:2000 quality management certification from The British Standards Institution. This achievement symbolizes a tremendous step forward in the Company's service culture, service quality and corporate image. Future Prospects In view of the changing times, advanced Internet and communication technologies have been incorporated into the transportation industry, bring significant changes to the industry's traditional operating models. CKSD will maximize the use of these advanced technologies not only to provide optimal convenience to customers, but also to improve the efficiencies of its supply chain management. This will further improve the quality of its logistics transportation and enhance its competitive advantages. CKSD's aim is not only to provide transportation services, but also to become a working partner with clients.

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