1996 — Page 87

1996 (1995 - 69 cents per share). Together with the interim dividend of 24 cents per share paid on 10 October 1996 (1995 - 22 cents per share), dividends for the year ended 31 December 1996 will amount to HK$1.04 per share (1995 - 91 cents per share), totalling HK$419.8 million (1995 - HK$367.3 million).

Growth, Change and Opportunities

Hong Kong is poised to see substantial growth into the next century. As the leading bus transport provider in the territory, we will capitalise on opportunities that are in line with, or are closely related to, our core bus service operations. Looking ahead, we see three strong areas of growth potential: the Chek Lap Kok airport and neighbouring Northern Lantau/Tung Chung, the New Territories, and the border area between Shenzhen and Hong Kong.

Chek Lap Kok and Vicinity

We anticipate high demand for transport services to and from the new Chek Lap Kok airport and Northern Lantau. Our wholly-owned subsidiary, Long Win Bus Company Limited (formerly known as Long Win Holdings Limited), has already been awarded a franchise to operate buses on 12 routes linking these areas to other points in the territory. The new Chek Lap Kok airport is due to open in April 1998. With an initial capacity of 35 million passengers a year, the new airport is really a community project under development. Upon completion, the island on which the airport is situated will be a complete township with malls, entertainment centres including restaurants and movie cinemas, dormitory facilities for airport staff and a five star international hotel for travellers and tourists. Moreover, we see a ripple effect from the development of Chek Lap Kok island on neighbouring Northern Lantau and the new town of Tung Chung, resulting in the creation of new residential and commercial sites in this region. The entire new airport infrastructure project, including the opening of the Western Cross Harbour Tunnel in mid-1997, will augment the need for bus services around the territory and provide strong growth impetus for us.

Rapid Growth of the New Territories

One trend that should augment customer patronage is the accelerating transformation of the New Territories as one of the largest residential expanses in Hong Kong. Approximately one-third of Hong Kong's six million people resides in the New Territories. Affordable housing, a less urban environment, shopping conveniences, and a growing commercial sector are increasingly making this area a preferred choice for those wanting something of a 'town and country' lifestyle.

"The coming year

presents us with

unique challenges

and windows of

opportunity... KMB fully intends to

participate in providing sound

transport solutions

for the territory and

the greater region in

the face of this

exciting new

environment."

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