CRSC Value and Return Enhancement Action Plan (2024)
In order to actively implement the investor-oriented philosophy, in response to the call of the
SSE’s Science and Technology Innovation Board, China Railway Signal & Communication
Corporation Limited (hereinafter referred to as “the Company” or “CRSC”) develops this plan
from operations management, corporate governance, disclosure of information, and investor
returns in the light of the stage of development of the enterprise, the characteristics of the
industry, and investors’ demands. This plan aims to improve the quality of listed companies
held by the central enterprises, and seeks to create more value for investors and strengthen
investor returns.
The Company’s Leading Group for Quality and Efficiency Improvement will actively organize
the implementation of this plan at all levels throughout the group of CRSC, and promote it in
concert with the implementation of the Company’s 14th Five-Year Plan for Development, the
efforts to expedite the construction of a world-class enterprise, and the improvement of the
quality of listed companies.
CRSC’s main measures to “improve quality and efficiency and increase returns” are as
follows:
I. CRSC will Deeply Explore the Main Industry to Cultivate Advantages, and Put Forth Effort
to Enhance Its Ability to Create Enterprise Value.
Focusing on the main responsibilities and main business, we will develop the real economy,
and constantly consolidate the foundation of development, so as to have more prominent
main business and more obvious competitive strengths. We will adhere to the orientation of
serving the national strategy, promote the high-end, intelligent and green transformation of
rail transportation, give full play to the advantages of the “three-in-one” services in the full
industry chains, and maintain the leading position in the industry around the globe. In 2024,
we will strive to achieve a steady improvement in economic efficiency, return on net assets,
overall labour productivity, and operating cash ratio.
be expanded. We will strengthen the market development efforts and resource investment,
conduct in-depth research and analysis, and make plans for market operation in advance. As
projected, the Company’s market size of high-speed railway weak electricity system
integration in 2024 will not be smaller than that in 2023, and the peak bidding period will be
concentrated in the second quarter and the fourth quarter. The company will make every
effort to ensure that stable market share at a high level. In the field of urban transit control
system, it is expected that in 2024, there will be more than 20 new/extended lines of
approximately 800 kilometers for signaling system bidding. The Company will actively strive
to stabilize the contract undertaking scale. We will strengthen high-end and differentiated
competitive strengths in rail transportation, actively develop “system, product, construction
+ operation and maintenance” mode. In the meantime, relying on joint ventures and
cooperation and other means, we will seize the large regional markets, establish the
first-mover advantage of high-speed rail overhaul and transformation market, seize the
incremental opportunity of urban express rail, and expand the new construction and renewal
of general railway and the market share of the newly-built subway, explore the opportunity
of contracting the “Four Electric Systems” business of the newly-built high-speed railway,
promote the operation and maintenance business to form scale, and strive for the steady
growth of the business scale.
receivable, and to enhance the quality of operating efficiency. We will strengthen the rigid
constraints of the budget, strictly control the expenses, increase the efforts to reduce costs
and save expenses in the whole industry chain and value chain, expedite the progress in the
construction of the information system that integrates industry and finance, and solidly
promote the control of all-factor costs. We will continuously promote differentiated and
penetrating control work, fully consider customer credit, solvency and risk factors, and
establish a negative list for project contracting, so as to control risks from the source. We will
continue to carry out the special management of accounts receivable, strengthen the
process monitoring and early warning, and actively pursue recoveries in conjunction with
project cleanup. Also we will improve the level of information management and control.
With financial sharing as an opportunity, we will advance the integration of business and
finance and continue to promote the digitization of business front end, and realize the
automated capital income and expenditure planning and real-time early warning of overdue
receivables. The target of accounts receivable backlog control will be incorporated into the
contractualised assessment of the management and the assessment of the head of the
enterprise, and a special incentive policy for accounts receivable clearance will be
formulated. Efforts will be made to keep the return on net assets of each secondary
enterprise above the comparable level in the same industry in the market, and to further
improve the return on net assets of the Company.
speed up the efforts to build the treasury system, strengthen the lean management of funds,
scientifically develop fund budgets, rationally arrange fund positions, promote the
convergence of fund budgets and business plans, give full play to the advantages of
centralized funds, and continuously improve the effectiveness of fund utilization. Combined
with the special cleanup of bank accounts, we will increase efforts to clean up inefficient and
ineffective bank accounts, improve the promotion of direct linkage between banks and
enterprises, and continue to enhance the concentration of funds. We will reasonably allocate
budget resources. Specifically, in the allocation of funds and other financial resources, we
will focus on key projects, control resources allocated for conventional business, attach
importance to efficiency, and focus on the main responsibilities of the main business. For
strategic emerging business, we will increase the allocation of financial resources, promote
the development of the industry by investment, mergers and acquisitions, industrial funds
and other means, and enhance the efficiency of resource allocation.
II. CRSC will Play the Role as an Innovative Subject and Promote Self-reliance and Strength
in Technology at a High Level
We will fully grasp the new situation and new requirements of deepening reform, strengthen
the Company’s principal status in technological innovation, and play the leading role to serve
the overall situation of national technological innovation. We will speed up efforts to
aggregate innovative elements, promote the transformation of original achievements, strive
to optimize the innovation ecosystem, and firmly grasp the major key core technologies in
our own hands. In 2024, CRSC will continue to increase its investment in R&D. The intensity
of R&D investment is expected to reach 5% and above, and by the end of 2024, CRSC is
expected to have at least 5,000 authorized patents, of which at least 3,000 ones are
invention patents.
innovation, we have gathered forces to carry out original and leading technological research,
and have made every effort to complete a number of national major research tasks and key
R&D projects. CRSC serves the development trend of rail transportation with its own
innovative technology, and plans to carry out no less than 800 R&D projects in 2024. For
example, to meet the needs of the future collaborative development of urban
agglomerations, the Company has independently developed the collaborative transportation
and service system of regional rail transportation. This system can be used to build the
strongest “smart brain” of the regional rail transportation, which displays real-time
projection of passenger flow, train flow and facilities and equipment situation, provides
cooperative preparation and dynamic adjustment of the transportation plan of the whole
network, and strengthens the comprehensive guarantee and linkage response and disposal,
so as to realize the new change of regional rail transit and promote the high-quality
development of urban agglomerations. In order to support the need to “foster several
modern metropolitan areas with a high degree of urban integration”, the Company has
carried out the integrated research of multi-mode control systems in accordance with the
needs of urban (suburban) railroads in different regions, and has completed the
development of compatible on-board equipment, and the field tests for 3-minute automatic
turnback and 20-second automatic manipulative side change functions of the CTCS2+ATO
system in urban railways. For the control system for high-speed railway train with a speed
above 400 km, the Company develops system solutions and key technical equipment for two
application scenarios of new high speed railway for trains with speed above 400 km/hour
and speed upgrading of existing lines, so as to enrich and expand China’s basic theories of
high-speed railway train control technology and engineering practical experience. In order to
meet the growing demand for capacity of heavy railway in China, the Company
independently develops the integrated dispatching and command management system for
railway freight transport and independently develops the self-grouping high-density
automatic operation control system of heavy freight trains based on China’s high-speed
railway control and self-driving technology, which enhances the transportation efficiency,
taps the potential of driving, improves the operation quality of freight trains, reduces the
labor intensity of drivers and the energy consumption of transportation, and significantly
improves the comprehensive efficiency of freight railway transportation.
curator of original technology for rail transportation safety control system to support the
accelerated development of national rail transportation safety control technology. We also
will strengthen the functional positioning of the technological innovation platform, better
serve the core business and strategic objectives of enterprises, and add one new national
enterprise technology center in 2024.
Steady efforts will be made to increase investment in technology and innovation. More R&D
funds will be input for original leading technology research, with R&D-based core
sub-enterprises investing no less than 10% in basic, forward-looking, original and leading
research.
sustainable development with high-performance results will be promoted. We will work with
users to carry out diversified technological innovation cooperation, so as to promote the
industrialization and transformation of technological achievements, and support the
accelerated development of new quality forces. According to the on-site tests conducted by
Shenhua Group, the heavy-duty group operation control system meets the main technical
indexes of group control; and intelligent yard system completes the commercial application
at Mohan Station. For Train Autonomous Control System (TACS), the 30-train high-speed
train test for Shanghai Line 3 & 4 will be completed; for C2+ATO system, the passenger trial
operation of Shanghai Urban Railway Airport Line will be competed; for Railway Intelligent
Integrated Operation and Maintenance System, the application demonstration of Wuhan
Railway Bureau will be competed; for Fully Automatic Operation (FAO) train control system
for urban railways with the function of flexible grouping, Beijing Subway Line 12 will be
opened.
international technological innovation exchanges, and deeply participate in the activities of
international organizations with respect to rail transportation control and the formulation of
standards. We will continuously optimize the management system for R&D projects, and give
full play to the leading role of experts and talent in innovation. Meanwhile, we will optimize
the incentive mechanism, continue to strengthen the income distribution incentives after the
transformation of results, select the relevant pilot enterprises and pilot results to carry out
research on the application of “results of the transformation of excess profit dividends”,
“patent operation and transformation” and other incubation and transformation modes. We
will further authorize and decentralize the total wage bill of employees in enterprises in
“scientific and technological system reform” and “double-hundred action”, further increase
support for strategic emerging industries and future industrial layout, explore and improve
the differentiated wage adjustment mechanism, explore more diversified medium- and
long-term incentives, and realize optimized combination of a variety of short-, medium- and
long-term incentives. Further efforts will be made to deeply implement the incentive
mechanisms such as the “technology reward”, “horse racing” and “completely rationed
research funds”.
III. CRSC will Promote Value Realisation and Enhance Investors’ Sense of Gain.
We establish scientific market values, and strive to enhance the performance of the capital
market to create a new situation of value realisation. Special actions will be carried out to
improve the quality of listed companies, with a focus on shortcomings and weaknesses
affecting high-quality development. We will apply categorized measures, make precise
efforts, strengthen the quality internally and shape the image externally, striving to be an
exemplary example of outstanding main business, excellent and strong development, perfect
governance and honest operation in the capital market.
The Company is committed to actively providing stable returns for its shareholders. As
considered and approved at the 20th meeting of the 4th Board of Directors of the Company,
it was proposed to distribute a cash dividend of RMB1.70 (inclusive of tax) for every ten
shares to all shareholders for the year 2023, based on the total share capital registered as at
the date of registration of shareholdings for the implementation of the equity distribution.
As of 31 December 2023, the total share capital of the Company was 10,589,819,000 shares,
on which basis the total proposed cash dividend would amount to RMB1,800 million
(inclusive of tax), accounting for 51.77% of the Company’s net profit attributable to
shareholders of the listed company for the year 2023.
increase their holdings. In January 2024, the Company’s controlling shareholder, China
Railway Signal & Communication Co., Ltd. (hereinafter referred to as “CRSC Group”),
increased its shareholding of 3,659,000 A shares of the Company through the trading system
of the Shanghai Stock Exchange by centralized bidding with its equity fund of approximately
RMB15.68 million. After the increase, CRSC Group’s shares account for approximately 0.03%
of the total number of issued shares of the Company. The Company will actively follow and
push CRSC Group to continue to implement the plan to increase its shareholding.
The Party Committee and the Board of Directors of the Company actively pay attention to
the market situation and promote the implementation of measures such as extending the
lock-up period of the controlling shareholder, increasing the shareholdings of the controlling
shareholder and repurchasing in a timely manner, in the light of the performance of the
capital market, so as to boost the market confidence, guide the value of listed companies to
return to the intrinsic value in a reasonable manner, and facilitate the benign development
of enterprises.
IV. CRSC will Value the Demands of Shareholders and Strengthen Communication with
Investors.
We will adhere to the concept that communication creates value, actively communicate with
investors and listen to their voices. We will attach importance to market feedback,
reasonable guide expectations, convey the Company’s value, increase the recognition of all
parties, so that investors can get closer to us, be able to understand, see clearly and have
confidence.
briefings in 2024, widely inviting investors, especially small and medium-sized investors,
industry analysts, media, among others. The chairman, president, and independent directors
will attend the annual result briefing. The result briefings will be held flexibly in online and
offline forms. Digital technology will be fully utilized to help us actively communicate and
interact with investors through live streaming, video meeting, telephone meeting and other
forms, so as to protect the legitimate rights and interests of various investors.
or offline investor exchanges through the “SSE Roadshow Center” platform and making
appointments for online and on-site meetings. Investors can make an appointment by calling
or emailing to the Company at ir@crsc.cn.
participated in the SSE’s “Visit Listed Companies” series activities in April and December, and
in 2024, the Company will continue to invite investors to pay a visit to CRSC to learn more
about the Company’s development planning, business operations, technology products,
corporate culture and other aspects.
maintain investor relations, understand investors’ demands, report investors’ opinions and
suggestions to the management and relevant business lines in a timely manner, study and
develop relevant measures, and actively respond to them through information disclosure
and other compliant means.
V. CRSC will Improve Corporate Governance and Effectively Enhance Its Effectiveness.
We will continuously promote in-depth the unification of strengthening the Party’s
leadership and improving corporate governance, and further improve the corporate
governance mechanism with statutory authority and responsibility, transparency of authority
and responsibility, coordinated operation, and effective checks and balances.
for independent directors in its Articles of Association and requires that independent
directors shall account for not less than one-third of members of the Board of Directors, and
that there shall be at least three independent directors. The independent directors should
conscientiously perform their duties, express their opinions in a fair and objective manner,
offer advice and suggestions for the development of the Company and safeguard the overall
interests of the Company, focusing on matters closely related to the interests of small and
medium-sized shareholders, such as the Company’s connected transactions, external
guarantees, use of raised funds, M&A and restructuring, major investment and financing
activities, remuneration of senior management and profit distribution. The Report on the
Duty Performance of Independent Directors will be published at the same time with the
annual report to fully disclose the annual performance of independent directors. In
accordance with the requirements of the Measures for the Administration of Independent
Directors of Listed Companies, Guidelines on the Articles of Association of Listed Companies
and other laws and regulations, we amended the Articles of Association, with the
requirements of A+H listing on two exchanges taken into account.
will strengthen the construction of the “1+5+1” platform, namely “the Board of Directors+
specialized committees and specialized meeting of independent directors” platform. The
Company’s Board of Directors has experienced members in complementary specialties and a
diversified structure. The five special committees conduct in-depth and detailed prior
research on matters in their respective fields, to assist the Board of Directors in improving
the efficiency of its decision-making and the quality of its operations. A mechanism for the
special meeting of independent directors will be established, the duties of the Audit and Risk
Management Committee, the Remuneration and Evaluation Committee, and the Nomination
Committee will be further adjusted, and efforts will be made to promote the coordinated
operation of the Board of Directors, the special committees, and the special meeting of
independent directors in their respective roles. Furthermore, we will continue to improve
the mechanism for the management to exercise authority and perform their duties, so as to
enhance operational vitality and improve management efficiency.
multi-channel regular communication mechanism will be established for external directors to
open the Company’s OA to view the Company’s documents and notices, and to understand
the Company’s daily operation. The production and operation information will be notified to
external directors on a monthly basis, and the communication meeting with external
directors will be held every quarter. We will actively invite external directors to participate in
the annual work conference and other important global meetings, and carefully plan and
organize the research. In 2024, we plan to carry out collective research on external directors
for more than three times, and individual research on them for several times, to realise the
“full coverage” of research on external directors in each business segment and important
sub-companies, and to provide convenience for external directors to grasp the enterprise
developments in depth.
We will strive to maker key core technology breakthroughs around the key industrial chain of
the manufacturing industry, accelerate the R&D and promotion of application of
cutting-edge technologies, such as new energy, artificial intelligence, green and low-carbon,
and actively carry out scientific research projects on green environmental protection
technologies, and popularize the use of new materials, new technologies and new processes.
We will continuously promote energy-saving and carbon-reducing technologies for the main
rail transportation industry, and adopt energy-saving ATO software upgrades for train
operation devices in projects under construction to realize high-quality automatic driving, so
as to save operating costs and reduce energy consumption. We will also regularly disclose
ESG reports. Greater efforts will be invested to improve the Company’s ESG professional
governance capacity, risk management capacity, and to strengthen the research and
application of new green energy-saving technologies and materials. We will establish and
continuously improve the Company’s environmental protection system, strengthen the
management organization of important environmental factors, reduce and eliminate
environmental incidents. All of our subsidiaries have passed ISO14001 Environmental
Management System Certification, with certification rate reaching 100%. In 2024, through
promoting photovoltaic projects, optimising product structure, energy-saving renovation,
and building an energy online monitoring platform to reduce major power consumption, we
expect to achieve a further reduction in the comprehensive energy consumption of
RMB10,000 output value, and continue to reduce the greenhouse gas emissions of
RMB10,000 output value (income) compared with that of 2023 (0.0183 tons).
compliance concept of “compliance starts from the senior management, all employees take
the initiative to ensure compliance, and compliance creates value”. We are endeavoring to
build a value system in which the senior management members lead compliance and all
employees practice compliance, and we continuously strengthen the “five-in-one”
coordinated operation of law, compliance, risk, internal control, and policy management to
provide solid legal protection for the Company’s reform and development. The Chief
Compliance Officer is deeply involved in the review and approval of major contracts and
important decisions, and takes the lead in organizing the development of the compliance
management system and the evaluation of the effectiveness of the compliance system.
Through enterprise self-evaluation and on-site evaluation and inspection, problems and
deficiencies in compliance work are identified, and the effectiveness of the operation of the
compliance management system is continuously enhanced through immediate and
continuous rectification. In 2024, the compliance self-assessment of all subsidiaries will be
completed.
VI. CRSC will Strengthen the Responsibility of “Key and Few Persons”.
We will communicate closely with the “key and few persons” such as the actual controller,
controlling shareholder, shareholders holding shares of 5% or more, directors, supervisors
and senior management members of the Company to track the fulfillment of commitments
of the relevant parties, and to continuously strengthen the sense of responsibility and
contract fulfillment of the relevant parties.
Directors, supervisors and senior management members of the Company will be organized
to actively participate in the training related to the governance of listed companies, laws and
regulations for not less than 15 hours per person, and to actively participate in the meetings
and seminars of regulatory authorities, so as to strengthen mastery of the “key and few
persons” on the relevant laws, regulations and professional knowledge of the capital market,
and to continuously enhance their self-discipline and promote the high-quality development
of the listed companies.
The Company will continue to evaluate the specific initiatives of the action plan "improve
quality and efficiency and increase returns" and fulfill its information disclosure obligations in
a timely manner. The Company's plans, work programs and related forecasts contained in
this report are forward-looking statements that are not fait accompli and do not constitute
commitments by the Company to investors, and investors are advised to be aware of the
related risks.
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