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Public company info - BII Railway Transportation Technology Holdings Company Limited , 01522.HK
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BII Railway Transportation Technology Holdings Company Limited, 01522.HK - Company Profile
Chairman Zhang Yanyou
Share Issued (share) 2,097,000,000
Par Currency Hong Kong Dollar
Par Value 0.01
Industry System Applications & IT Consulting
Corporate Profile Business Summary: The principal activities of the Group are the design, production, implementation and sale, and maintenance, of application solutions for the networking and controlling systems of public transport and other companies, the provision of civil communication transmission services, as well as design, implementation and sale of related software, hardware and spare part in utility tunnel areas, and the investment in the railway transportation areas through investing in equity. Performance for the year: The Group recorded revenue of approximately HK$1,193.9 million in FY 2019, an increase of approximately HK$740.7 million or 163.4% from FY 2018. Profit attributable to equity shareholders in FY 2019 amounted to approximately HK$96.9 million, a year-on-year rise of approximately HK$49.5 million or 104.4%, marking a high growth rate for the fourth consecutive year. This has laid a solid foundation for the Group to achieve its future strategic development goals. Business Review Overview In 2019, the Group seized development opportunities arising from the construction of railway and urban rail transit in mainland China and firmly carried out its three-year (2019-2021) development strategy of “one body, one platform, and one centre”. Its two major businesses, intelligent railway transportation and infrastructure information, grew rapidly. The profit attributable to equity shareholders of the Company was approximately HK$96.9 million in FY 2019, which has doubled when compared with the previous year. A new historic breakthrough was made in the Group’s annual results. The significant growth showed that the Group’s development has reached a new level and entered a new stage. The Group’s operating results increased significantly and its operating quality improved continuously in 2019, with sales revenue went up approximately 163.4% from the previous year and reached approximately HK$1,193.9 million. The proportion of the sales revenue from the intelligent railway transportation business to its total revenue increased to approximately 84.5%, as sales revenue from this segment increased approximately 211.5% from the previous year to approximately HK$1,008.5 million. The growth is mainly attributed to the acquisition of 95% equity interests in Huaqi Intelligent in the first quarter of 2019, contributing revenue of approximately HK$556.1 million. Sales revenue from the infrastructure information business reached approximately HK$185.4 million, representing a year-on-year increase of approximately 43.3%. The Group’s gross margin rose approximately 11.6 percentage points from the previous year to approximately 35.6% in FY 2019 complementing the growth in sales revenue, representing a huge boost in profitability. The Group completed the acquisition of 95% equity interests of Huaqi Intelligent for a consideration of RMB1.045 billion (equivalent to approximately HK$1.191 billion) in March 2019, which has further reinforced its PIS business, strengthening its leading position in the mainland’s PIS industry and enhancing its core competitiveness. Huaqi Intelligent has been deeply integrated with the Group in the areas of, among others, marketing, R&D, finance, branding and management since the completion of the acquisition, and achieving initial synergic effect. Reference is made to the Company’s circular dated 31 January 2019 in relation to, among others, the acquisition of 95% equity interests in Huaqi Intelligent (“VSA Circular”). The Board is pleased to announce that the 2019 Actual Performance (as defined in the VSA Circular) of Huaqi Intelligent was more than 90% but less than 100% of the 2019 Guaranteed Performance (as defined in the VSA Circular), hence the 2019 Guaranteed Performance shall be treated as being fulfilled according to the terms of the Acquisition Agreements (as defined in the VSA Circular). The Group adhered to its market strategy of “relying on Beijing and Hong Kong, radiating across the country, and exploring international markets”, and it made great progress in market expansion. The Group participated in many projects, including AFC of Beijing Subway Line 12, and expanded its businesses to Fuzhou, Hefei, Kunming, Xuzhou, Nantong, Foshan, Pingyao, Dujiangyan, etc. where public transportation needs to be upgraded urgently. Moreover, it explored the India market in Mumbai and Pune through the international business department of Huaqi Intelligent. As of the end of 2019, the Group’s businesses covered a total of 39 cities in China and 9 cities overseas. As of the end of 2019, the Group had orders on hand of approximately HK$1.99 billion. The Group attended various industry-leading exhibitions in 2019, including the International Metro Transit Exhibition Beijing, UITP Congress and Exhibition in Stockholm, Sweden, and International Railway Equipment Exhibition in New Delhi, India, demonstrating its technical strength and project capability on a number of international and domestic industry platforms. It became a council member of the China Association of Metros and Beijing Railway Transportation Association and joined the urban rail cloud 1+N industry alliance in 2019. These platforms, which allow industry players to communicate with each other, will help raise the Group’s reputation and increase brand value. The Group paid continuous attention to intellectual property protection. It obtained 13 patent certificates (75 in total as of the end of 2019) and 59 software copyright certificates (291 in total as of the end of 2019) in FY 2019, which have been applied in many projects. The Group maintained a strong level of R&D and innovation, improving the quality and efficiency for the Group to achieve sustainable development. The Group has also actively explored innovation in rail transit while focusing on its main businesses. The investment on technology R&D was approximately HK$117.9 million, which represented a high level of approximately 9.9% of the total revenue in FY 2019. The investment effectively promoted the transformation of scientific and technological achievements to boost the Group’s future profitability, solidifying the foundation for enhancing the Group’s intelligent railway transportation business. Prospects: The rail transit industry will maintain good development momentum As mentioned in the “Outline of Building China into a Country with Strong Transportation Network”, China will complete various tasks about the modern comprehensive transportation system development plan for the 13th Five-Year period in 2020 and vigorously develop intelligent rail transit by promoting the in-depth integration of big data, internet, artificial intelligence and other new technologies with the transportation industry, and set up an integrated traffic big data centre system. Investments in China’s urban rail transit market tend to rise steadily in the coming years. According to the “2019 China Urban Rail Transit Market Development Report” released by China Rail Transit Network, 2020 is the final year of the 13th Five-year Plan period, and the construction and operation of urban rail transit is expected to usher in a certain amount of growth. In 2020, a total of 54 rail transit lines in 25 cities including Chengdu, Hangzhou, Shenzhen, Qingdao, Chongqing and Ningbo will commence operation, with a total mileage of 1,152.6 km, 745 stations and a total investment of RMB752.817 billion. Moreover, according to the Railway Development Plan for 13th Five-year period, China will have more than 150,000 km of railway lines by the end of 2020. It will mainly upgrade the scale of high-speed railway lines, intercity and urban (suburban) railway lines, and branch lines. The national railway network will basically cover cities with more than 200,000 permanent residents in the urban areas, and the high-speed rail network will reach more than 80% of big cities. The Group’s revenue mainly came from the provision of PIS, AFC and other information-based systems used in the construction of new railway lines and urban rail transit lines. The market demand was closely related to the total length of the new metro lines. Moreover, as a growing number of metro lines have been put into operation, the rail transit in many first and second-tier cities showed a new trend of network-based operation and management. Therefore, new network-level systems, including ACC, TCC and big data centre, should be urgently established for unified scheduling and management in these cities. The new fast-growing demands have brought new business opportunities for the Group. Intelligent rail transit accelerates the construction of smart cities China has successively released many policies, including “National New Urbanisation Plan (2014-2020)”, “Guidelines for Promoting Healthy Development of Smart Cities” and “Action Plan for Promoting Development of Intelligent Transportation in 2017-2020”. With the development of smart cities and widely application of Internet of Things (IoT), cloud computing, big data and other new technologies, the operation of intelligent rail transit driven by new-generation information technologies will become one of the main symbols of smart cities. As stipulated in the “Outline of Medium-to-Long-Term Plan for the Development of Science and Technology (2006-2020)”, priorities should be given to “high-speed rail transit system” and “intelligent traffic management system”. The intelligent rail transit system is a comprehensive platform based on the power/electrification system, signal/communications system, and information system, which is an inevitable trend for the development of modern rail transit. The intelligent upgrade of the rail transit in mainland China brought a series of new function needs, including system architecture (such as cloud platform and big data analysis), payment methods (such as facial recognition payment, mobile QR code payment, and UnionPay card payment), operation management (such as intelligent monitoring, passenger navigation, passenger flow perception and driving fatigue identification). The Group will actively extend the function of its products, enhance product performance and create more economic value added in the future. The Group focuses on certain businesses, trying to achieve collaborative innovation and sustained growth The Group, an enterprise specialising in the field of rail transit, integrating investment and financing, technology R&D, and intelligent rail transport construction, operation and maintenance, will fully grasp the golden development opportunities of the rail transit industry, keep up with the development trends of rail transit informatisation and intelligentisation, continue relying on scientific and technological innovation, and resolutely insist on its market expansion strategy around the main rail transit business to achieve high-quality and sustainable development, in order to grow into a high-tech enterprise with strong core competencies in the rail transit industry. Insist on scientific and technological innovation to help build intelligent rail transit By virtue of its technology R&D advantage, its insight in the rail transit industry and rich experience in the industry, and based on the rapid development of new-generation information technologies like big data, cloud computing, IoT and AI, mobile payments and other new tools, the Group will insist on scientific and technological innovation and set up a system of key technologies and products for intelligent rail transit that centres on a “standard big data architecture for rail transit”, including a rail transit big data platform, an intelligent passenger information service platform, an intelligent operation, maintenance and scheduling platform, a comprehensive multi-dimensional asset management platform, intelligent interconnection sensing equipment, an interactive fusion information display platform, as well as a security interconnection control platform. At the same time, the Group will be deeply involved in the design, construction, operation and maintenance of Beijing’s intelligent rail transit platform, aiming to become the most important intelligent system service provider for the city’s intelligent subway and smart trains. Riding on Beijing’s intelligent rail transit platform, the Group will launch a set of “Deliver 1.0” intelligent system solutions based on cloud computing and big data in 2021, standardise the application of intelligent technologies and promote Beijing’s new intelligent rail transit model across the country to help build smart cities. In addition, as a council member of the China Association of Metros, the Group will strengthen academic communication and exchange with owners, users, industry experts and high-end technical teams, accurately grasp the development trend of cutting-edge technologies, keep high-end technical resources in reserve, and create an ecosystem of collaborative innovation for intelligent rail transit. Keep focusing on primary businesses and extend industry chains to achieve balanced development The Group will continue to focus on the development of network-level traffic control centre and line-level core systems of the intelligent rail transit. Specifically, the Group will improve passenger-centric PIS service to solidify its leading position in the industry. It will develop standardised products to upgrade cloud computing-based AFC service and accelerate its pace to become one of the first-tier companies. It will further upgrade the TCC service centering on data analysis to build an advantage for the data centre. Besides, the Group will optimise the deployment of civil communications resources to achieve business diversification. At the same time, establishment of a whole-industry-chain development model will continue as the Group will extend its services to rail transit operation and maintenance, management informatisation and so forth in the aftermarket. The Group’s self-developed products and technologies will be applied in multi-scenarios. Technological achievements in intelligent rail transit will be used in ecological fields such as intelligent control systems for utility tunnels. The Group will aim to expand its business in the direction of achieving high technology content, high added-value and stable cash flows. These will help the Group to achieve technology symbiosis, ecological win-win results, and move towards a balanced and sustainable business development. Remain steadfast in its strategies to consolidate the existing markets and expand into new markets As the number of cities where rail transit lines have come into service and the length of rail transit lines are on the rise, the Group will insist on its market strategy of “relying on Beijing and Hong Kong, radiating across the country, and making presence in international markets”. It will deepen its presence in Beijing and Hong Kong and constantly explore potential opportunities to expand its footprint to other Chinese cities and create emerging regional hubs like Zhengzhou. Measures will be made to further diversify its businesses and increase its market share. The Group will also expand into overseas markets, including countries along the “Belt and Road”. Actively respond to the epidemic and consolidate the foundation for sustainable development The novel coronavirus pneumonia emerged in mainland China in January 2020 and quickly spread to more than 70 countries and regions, particularly affecting the tourism, catering and transportation industries. In order to deal with the impact caused by the epidemic, the Group adopted an “offline + remote” working method to maintain good communication with customers and suppliers, ensured that business progress was not interrupted, and steadily promoted resumption of on-going projects. The Group adopted various measures within the Group to reduce the cost and increase efficiency. The Group actively fulfilled its corporate social responsibility and donated RMB1 million to Wuhan Charity Federation* (武漢市慈善總會). After careful analysis and judgment, the current situation of epidemic prevention and control in mainland China has shown a trend of continuous improvement and the order of production and life have also started to recover. Meanwhile, the Group’s current asset-liability ratio is relatively reasonable and the cash on book remains sufficient. The epidemic will not affect the Group’s sustainability. Overall, the current epidemic situation has limited impact on the Group’s operating performance. In terms of opportunities, it is expected that after the end of the outbreak, mainland China will increase investment in infrastructure in the second half of 2020, including intercity high-speed rail and urban rail transit, which are part of the “new infrastructure”. This will provide more market opportunities for the Group. In the future, the Group will keep up with industry development trends and remain steadfast in its strategies. The focus will still fall on its core businesses. Driven by innovation, it will create a flagship brand based on “rail+technology”, in order to strive for better results.

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