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With acceleration of the cultivation of new momentum and the higher quality development of economy, China's urban rail transit has become the "series" carrier for urbanization development, regional economic development, "hourly traffic circle" construction and new infrastructure promotion.

Urban rail transit trains running on two rails must be directed and regulated based on the "central brain" of the signal system to ensure the safety and efficiency of train operation. Now, Chinese speed has also upgraded the "central brain" to the "Tianshu brain", and the "signal system" has become the key to opening the brain.

"We had to solve the problem of choking through the rail transit signal system," Gao Chunhai, chairman and general manager of Traffic Control Technology, said in a recent exclusive interview with China Business News. "It took us 20 years to do things abroad for 30 or 50 years."

Gao Chunhai stayed on to teach after graduating from the Department of Traffic Communications and Control Engineering of Beijing Jiaotong University in 1993. Gao Chunhai recalled that although the domestic rail transit construction was accelerating more than a decade ago, the core technology of the rail transit signaling system basically came from the technology of large foreign enterprises such as Siemens and Alstom, and the products were monopolized abroad. Even part of the textbook at that time directly used the instructions of the import system. At that time, he hoped to make a set of China's own signal system as a teaching mold.

Gao Chunhai has been considering "how to turn the scientific research achievements of track signals into productivity, solve the core technology, and straighten up the Chinese people in the field of rail transportation", which was completely dependent on and restricted by imports at that time". In this way, the young scholar and the team began to study the third generation signaling system product CBTC (Communication-based Train Control system) since 2000. In December 2009, Gao Chunhai and his team decided to go out of the laboratory and formally set up traffic control technology.

After experiencing the import of mechanization and electrification and modern intelligent control of information, with the construction of Beijing Metro Line 1 and Tianjin Metro Line 1 as the symbol, the development of urban rail transit in China supports the internal operation of the city and highlights the speed of China.

The Beijing Metro Yizhuang Line, which was successfully opened on December 30, 2010, makes China become the first country in Asia and the fourth country in the world to master the core technology of communication-based train control system (CBTC) and actually put into operation. It breaks the long-term technological monopoly of foreign countries and realizes the import substitution of signal system. It also makes Traffic Control Technology become the fifth company in the world after Siemens in Germany, Alstom in France, Therese in France and Bombardier in Canada to successfully master the core technology and successfully apply it in practical engineering.

As a result, China's urban rail transit outpaces China's speed, and begins to realize import substitution in the third generation of urban rail signal system, which breaks foreign monopoly and puts forward a Chinese plan.

Li Jia, deputy general manager, head of manufacturing team and chief researcher of Hua Chuang Securities Industry Finance Department, pointed out that "China's rail transit was in a cycle of rapid industrial development in the past 10 years. Traffic Control Technology had realized the localization of the main core components of the urban rail transit signal system in China."

Li Jia said, "The Traffic Control Technology substituted import products and had raised its gross profit margin. The breakthrough of core technology, continuous service capability and future technology upgrading will become the backwardness advantage of urban rail transit enterprises. After the autonomous controllability is stronger, Traffic Control Technology has a certain potential to solidify many new technologies in the chip. "

So, what other core technologies of urban rail transit signal system need to be broken through? What is the threshold of this industry?

In 2015, based on CBTC technology, Traffic Control Technology, as the technology leader, undertook the national demonstration project of Chongqing Ring Line Interconnection, solved the core technology of interconnection and formed the Chinese standard CBTC interconnection industry chain.

In 2017, the demonstration project of Beijing Yanfang Line, China's first fully autonomous operation system FAO line undertaken by Traffic Control Technology, was opened, and the fully automatic operation level reached the GoA4 level (the highest grade of automation) in the rail transit field, which fills in the gap in the autonomous technology of domestic FAO fully automatic operation system.

Gao Chunhai said frankly, "Traffic Control Technology is a microcosm of the scientific and technological community's transformation of technological achievements into productive forces." Urban rail transit signal system is equivalent to a brain, which is composed of a lot of algorithms and control modules, etc.; For different application scenarios and different parameters, urban rail transit signal system will carry out different application requirements according to specific scene applications, which has a certain technical threshold. "

According to the statistics of the International Public Transport Association (UITP), the proportion of lines using the FAO system accounts for 12% of the new line construction only from 2015 to 2017, and it is expected that the proportion of FAO will rise to 48% by 2022. In domestic cities, the market share of I-CBTC and FAO is expected to continue to increase.

In September 2019, the fully automatic operation system based on interconnection successfully developed by Traffic Control Technology was applied on the line of Beijing Daxing International Airport for the first time with a speed of 160 km / h, which ranks in the forefront of the world. It has realized the transformation of the fully automatic operation system from "running side by side" to "leading" relative to the international level.

So, from independent research and development to solving of the problem of "sticking neck", to the recognition of international independent third-party safety assessment standards and systems, and then to technology guidance, do these reflect the gold content of Science and Technology Innovation Board's first batch of listed companies? What is its core competitiveness?

According to some industry views, compared with the first engineering application of independent CBTC technology by other domestic manufacturers, Traffic Control Technology is ahead for at least five years; In terms of R & D investment, the R & D expenditure reached 113 million yuan in 2019 with an increase of 46.12% over the same period last year.

The financial report shows that nearly 95% of the revenue of Traffic Control Technology comes from the signal system contracting business; At the same time, the winning projects in the past two years have grown rapidly, and the business scale has continued to expand; In the main line of national public bidding from 2016 to 2018, the bid winning rates of Traffic Control Technology are 5.9%, 24.1% and 30.8%, respectively, which ranks first in 2018 and 2019 in a row.

Gao Chunhai said frankly to China Business News, "as long as what is related to the 'two rails' are my users. Without the needs of users, I will absolutely not do it."

In 2019, the revenue of Traffic Control Technology was 1.652 billion yuan with an increase of 42.09% over the same period last year, and the net profit belonging to the owner of the parent company was 127 million yuan with an increase of 91.72% over the same period last year.

The record form of investor relations activities released on May 7, 2020 shows that Traffic Control Technology had orders on hand of about 5.7 billion yuan, and sporadic sales and maintenance services of about 280 million yuan by the end of 2019. In the sustainable development, Traffic Control Technology has its own "three-step" plan to balance the huge R & D investment and the huge cash flow demand.

However, the risks in the traffic control technology prospectus suggest that the company may face the risk of increased competition in the market. If the company fails to maintain a leading position on the market, it will have a certain adverse impact on the business development and efficiency of the company.

Public data show that there are 12 general contractors of urban rail transit signal system in China, wherein in addition to Traffic Control Technology, 6 domestic companies have realized the engineering application of independent CBTC technology, and 3 companies have realized the engineering application of I-CBTC technology by the end of 2018.

So, what is the "helmsman" Gao Chunhai's "three-step" plan? How will he increase the market conversion rate and market share? At the same time, how to balance the huge R & D investment and cash flow demand? What is its commercial chessboard?

By the end of 2019, Traffic Control Technology has undertaken signal system projects of nearly 1930 km in 26 cities, including Beijing, Chengdu, Shenzhen, Chongqing, Ningbo, Hangzhou, Hefei and so on, of which a total of 20 lines have been opened and the total length of the line is about 772km.

From 2016 to 2019, according to the number of lines, the market share of traffic control technology was 5.88%, 24.13%, 30.77% and 25.00%, respectively.

In the view of industry veterans, including Li Jia, who has studied the rail transit field for more than 10 years, interconnection and fully automatic operation system are considered to be the future trend of the rail transit field. I-CBTC and FAO have become the mainstream development trend and main technical route in the field of urban rail transit signal system.

Li Jia pointed out to China Business News that rail transit is not only a category of new infrastructure, but also an investment project. "Regardless of construction of the urban economic circle or the later transformation of urban rail transit, the platform companies with product-oriented and strong R & D capabilities are new opportunities for structural changes in the later stage of capital construction, and the thinking of investment should change from looking at increments to looking at stocks."

So, how will persons of Traffic Control Technology "in charge" and senior industry researchers view the future development of traffic control technology? What is the future development trend in the field of urban rail transit signal system? How to seize the investment opportunities in the future?

In this episode, China Business News walks into Traffic Control Technology as one of Science and Technology Innovation Board's first batch of listed company, and talks with Gao Chunhai, Chairman and General Manager of Traffic Control Technology. Li Jia, Deputy General Manager, Manufacturing Team Leader and Chief researcher of Hua Chuang Securities Industry Finance Department. The talk aims to focus on technical background supporting the 91.72% year-on-year increase in net profit belonging to the parent company, understand the current situation and market space of the subdivision track of China's urban rail transit signal system, and explore the development breakthroughs and investment opportunities in the field of traffic control technology and urban rail signal system.

How to invest in the gem and make knowledgeable people talk about the industry. China Finance News has launched a series of topics on "Knowing the Bank and stepping into Science and Technology Innovation Board", and has walked into enterprises from Science and Technology Innovation Board on the spot to talk to the leaders of enterprises, have exclusive interviews with investment banking elites and senior investors, and explore the new momentum of economic development.