中国中车(601766):CRRC ACTION PLAN FOR “ENHANCING QUALITY, INCREASING EFFICIENCY AND EMPHASIZING RETURNS”
ACTIONPLANFOR “ENHANCINGQUALITY,INCREASINGEFFICIENCY ANDEMPHASIZINGRETURNS” CRRC Corporation Limited (hereinafter referred to as “CRRC” or the “Company”)has actively responded to the Shanghai Stock Exchange’s initiative on the “EnhancingQuality, Increasing Efficiency and Emphasizing Returns” campaign among Shanghai-listed companies byformulating Action Plan for “Enhancing Quality, IncreasingEfficiencyandEmphasizingReturns”(hereafterreferredtoasthe“ActionPlan”),soasto earnestly fulfil its responsibilities of “Improving the Quality of the Company whileEnhancing the Returns and the Sense of Gain for the Investors”. The details are asfollows: I. CREATINGANINDUSTRIALPATTERNOF“TWOTRACKSANDTWO CLUSTERS”TOENHANCETHEOPERATIONALQUALITY Since its establishment, CRRC has focused on its principal responsibilities andmajor businesses, strengthened strategic leadership, deeply grasped opportunities,and actively responded to challenges. It has developed into the world’s leading,diverse rolling stock supplier with advanced technology, and received greatattention from leaders oftheParty andthestate. Theseries ofrolling stockequipment represented by Chinese standard high-speed MUs of “China Fuxing”EMUsbecamethe“goldencard”ofChina’shigh-endequipmentgoingglobal.TheCompanystrivedtocreateanindustrialpatternof“TwoTracksandTwoClusters”for the rail transit equipment business and clean energy equipment business.This will establish a system of graded layout, positive interaction, and clusterdevelopment, expediting theenhancement ofsystem solution capabilities andsolidifyingtheindustrialfoundationforhigh-qualitydevelopment.(1) Mapping out strategies, optimising layouts, strengthening theconstructionofnewbusinessmodels,andbroadeningpathwaysforhigh-qualitydevelopment Accelerating theupgrading oftherailtransitindustry. TheCompany closelyfollowsthedirectionofrailwaymarketreforminthecountry,withthegoalsof achievement of speed, heavy load, and digital intelligence, to establishanequipment system that meets the development needs ofthe modernrailway logistics system. We develop multi-mode, cost-effective solutionsfor medium-to-low-capacity urban transportation systems and promote theconstruction of a family-based vehicle platform. We accelerate the launchof “integration of vehicles and the electromechanical system on the ground”and full life cycle service plan based on the digital, intelligent and greenelectromechanical system, in order to enhance our capabilities in providingurbantransportationsystemsolutions. Intensifying the improvement of quality for strategic and emergingindustries. The Company strengthens the top-level design of its new energyindustrylayout,whiledeepeningitsfocusonkeyareas,andcoordinatingtheimplementation of industrial baselayout plans. We intensify the research onthetechnologiesandequipmentrequiredfornewpowersystemsanddevelopthe system solutions of “power sources, networks, load and storage.” Also,we continuously strengthen our simulation and testing capabilities, in orderto support the continuous improvement of product performance and qualityinstrategicemergingindustries. Expediting the cultivation of future industries. The Company fully leveragesCRRC’s extensive application scenarios to develop system solutionsforthehigh-endequipment manufacturing industry, integrating “intelligentequipment+intelligentfactories +intelligentservices,”thereby fosteringthedevelopment of a digital and intelligent industry that integrates automatedoperation, lean management,green production, andintelligenttechnology.(2) Exploring new markets, expanding incremented volume, strengtheninganddevelopingnewmodels,aswellaslayingasolidfoundationforhigh-qualitydevelopment Precisely focusing on the market of rail transit equipment. The Companystrengthens communication and coordination with key customers, andproactively promotes the implementation of order procurement. Also, wefocus on the trends of digitalization, intelligence, and green development,and the Company will expedite the establishment of amodern logisticsequipment system for railways. Besides, wecontinue toleverage ouradvantages in the regional markets of urban rail transit, consistently expand“Product+” and “System+” businesses, and speed upthe research andformulation of value creation model samples, in order to strive to developdemonstrativeandleadingprojects. Thoroughlyfocusingonthemarketofcleanenergyequipment.TheCompanyoptimises its strategic cooperation governance mechanism, and promotes itsstrategic market development and the implementation of key cooperationprojects. We seize opportunities in clean energy development, acceleratethe construction of market advantages in wind, solar, hydrogen and storage,enhance our industry presence, and strengthen our industry status. Also, westrengthen our capabilities in improving system solutions, while proactivelyexploring and promoting the integration oftransportation andenergy,inordertoexertcertaindemonstrativeeffects. Deeply focusing onthemarket ofinternational business. TheCompanyconsolidates and expands its market in those countries along the Belt andRoad Initiative, provides its services and supports, and follows uptheimplementation of various overseas projects. We steer the implementationand particular monitoring of DLS projects to ensure their smooth progressandeffective market expansion, strengthen ourmanagement capabilitiesand supply chain system construction for DLS projects, build up a value-oriented, digital, and green DLS 2.0 model and continue to strengthen theestablishment of ateam with talents specialized in comprehensive DLSbusinesses. Leveraging the layout in our advantageous regions, we promotethesynergistic development ofour“two-track”strategy forusto“goingglobal”. Focusing on nurturing the market of digital and intelligent industry. TheCompany promotes the business model featuring “Product +” and “System+” supported by industrial digitalisation and intelligentisation. We establishan organization and coordination mechanism for the digital and intelligentindustry, accelerate the professional integration ofinternal digital andintelligent industry resources, and build up a synergistic market expansionsystemforthedigitalandintelligentindustry. II. ENHANCING TECHNOLOGICAL INNOVATION AND ACCELERATING THEDEVELOPMENTOFNEWQUALITYPRODUCTIVEFORCES The Company has insisted on self-reliance in science and technology, vigorouslyimplemented the innovation-driven development strategy, deepened the reformof the science and innovation system, accelerated the construction of sources oforiginal technologies, continued to advance proprietary innovation capabilities toachieveamajorleapfromfallingbehindandcatchinguptotakingthelead.TheCompany will continue toprioritize technological innovation among allthe other tasks, adhered to the innovation-driven development strategy, focusedondeveloping new quality productive forces, and empowered high-qualitydevelopment through high-level technological self-reliance and self-strengthening.Focusing on the development of new quality productive forces, the Companywill reinforce the deep integration of technological innovation and industrialinnovation tobuild new industries, new business forms, and new models,expandingnewspacefordevelopmentandcultivatingnewdriversforgrowth.TheCompanywillfocusonimprovingtheinnovationsystem,maintainingahighlevelof technological investment, coordinating innovation resources, and concentratingefforts ontechnical research and project breakthroughs. The Company willoptimize the ecosystem for technological innovation, adhere to market orientation,leverage “thirst-quenching” policies, and continuously improve the efficiency oftechnologicaloutputs.Wewillstrivetoenhanceourinnovativecapacity,focusonthe construction of source of original technologies, and increase the investmentin original technology and research on the disruptive, frontier, common and basictechnologies. TheCompany will strengthen collaboration with upstream anddownstreamoftheindustrial chain,enhancethecoordinationofscientificresearchprojects, and deepen the modern industrial chain synergy actions for CRRC’srail transit equipment and clean energy equipment. We will focus on translatinginnovation results intopractice, accelerating theapplication oftechnologicalinnovation achievements, as well as grasping the trend of digitalization, greendevelopment, intelligence, modularization and platformization, and acceleratingwillbuildahigh-qualityteamoftalents,whileadheringtoacombinationoftalentintroduction and independent training, and continuously optimising all aspects oftalent selection, cultivation, management, deployment and training, in order tocultivate sufficient talented personnel with a reasonable structure and excellentqualities. We will strengthen the construction of teams of talents specialized inclean energy equipment, strategic emerging industries and international businesstobettersupportourcorporatedevelopment. III. STRENGTHENINGINVESTORCOMMUNICATION TOENHANCE MARKETRECOGNITION The Company strictly adheres tothe principles of“Truthfulness, Accuracy,Completeness,TimelinessandFairness”in thedisclosureofinformationtoensurethatallshareholdershavefairandequalaccesstoinformationandtosafeguardtheinterests of all shareholders, in particular the interests of small and medium-sizedshareholders. The Company sticks to proactive investor relations management andactively manages multi-dimensional interactions with investors, analysts, media,regulatory authorities and the public. With innovative models, the Companyhas diversified the promotion channels and deepened the roadshows and reverseroadshowstoenhancemutualunderstandingandtrust,andconveytheCompany’svalue.TheCompany’sinformationdisclosureandinvestorrelationsmanagementhavebeenwidely recognized by the capital market, regulatory authorities and professionalorganizations. The Company will continue to proactively strengthen multi-dimensional,multilevel and multi-form investor communication and value management toenablethecapitalmarkettofullyrecognizetheCompany’sintrinsicvalue.First,theCompanywillstrengthenthevaluepromotiontocontinuouslyenhancerecognitioninthecapitalmarket.TheCompanywillholdregularperformancebriefings,activelyorganizeexclusivepresentationsforinvestorsandanalystsontheannualresults,holdregularinvestorteleconferencesbyarrangingfortheparticipation in person ofthe Company’s directors and senior management so astotrulyandaccuratelyinterprettheCompany’soperatingresults,sharebusinessachievementsandoverallstrategy, exchange keyinformation ondevelopment opportunities and businessplanning, and respond truthfully to investors’ questions and concerns. TheCompany will conduct high-quality performance roadshows,visitdomesticandinternationalinvestmentinstitutions,andengageinone-on-onecommunication withkeyinvestors.TheCompanywillorganizereverseroadshowsinaninnovativewaytofurtherconveytheCompany’svalueandstrengthenrecognitioninthecapitalmarket. Second, the Company will refine daily management to solidify theweekly capital market reports andpublic relations event analyses toprovidetimely and accurate information support to our directors and senior management.TheCompany will continue toupdate investor profiles, establish thecapitalmarket analyst database, and convey the Company’s operation and managementphilosophy and strategic plans through visiting long-term shareholders andparticipatinginbrokers’strategyconferences,soastoenhanceinvestors’trustandunderstanding on the Company. TheCompany will prioritizedaily communicationwith investors, arrange for dedicated personnel responsible for answeringinvestors’ phone calls, receiving investors’ e-mails, paying attention to investors’questions on the E-interaction platform, and responding patiently to questionsraised byinvestors. The Company will participate ininvestment educationactivitiestoremindinvestorstomakerationalinvestments. IV. EMPHASIZINGINVESTORRETURNSANDSHARINGOPERATIONAL ACHIEVEMENTS Since its establishment, CRRC has implemented annual cash dividends,distributing acumulative total ofoverRMB50billion (taxinclusive) incashdividends to date. The average annual cash dividend distribution ratio exceeded40%, higher than the average level of the A-share capital market. The Companyhas increased the cash dividend to all shareholders per 10 shares from RMB1.5(tax inclusive) to RMB2.1 (tax inclusive), with the annual total cash dividendamount rising from RMB4.093 billion (tax inclusive) to RMB6.027 billion (taxinclusive), the proportion ofwhich tothe net profit attributable toordinaryshareholders ofthe listed company inthe consolidated financial statementsincreasedto49%. The Company will adhere to the Articles of Association and relevant provisionsofthe “CRRC Corporation Limited Medium andLong-Term Shareholders’ReturnPlan”, emphasizing investor returns, conducting timely research on measures suchas the promotion of interim dividends to enhance the stability and sustainabilityofdividend distributions, aswell assharing operational achievements withshareholders. The Company will continuously uphold the philosophy of betterprotecting shareholder rights andcreating greater valueforshareholders. TheCompany will scientifically manage its market capitalisation, improve itsmarket capitalisation management system and mechanisms, enhance the qualityofinformation disclosure, actively strengthen investor relations, andstabiliseinvestors’expectation on returns. It will earnestly fulfil its primary responsibilityformarketcapitalisationmanagementandmaintainmarketstability.V. OPTIMIZINGCORPORATEGOVERNANCEANDADHERINGTO STANDARDIZEDOPERATIONS Focusing onthe development ofamodern enterprise system with Chinesecharacteristics, theCompany hasimproved itscorporate governance system,forming abasic system that includes the Articles ofAssociation, Rules ofProcedure for Board of Directors, Information Disclosure Management Measures,and Investor Relations Management Measures, supplemented byspecializedsystems such astheTerms of Reference ofSpecial Committees of theBoardof Directors, Information Disclosure Implementation Rules, and MarketCapitalization Management Measures, thereby establishing a corporate governancemechanism that islegally defined, transparent, coordinated, and effectivelybalanced. The Company precisely manages theregulated operations, refinesthe governance bodies’ authority and responsibility, details the list of authorityand responsibility, promotes the reciprocity of authority and responsibility, andensures effective performance ofduties;theCompany accurately controls thequality ofboard proposals, establishes aproposal quality control procedure,and for important proposals, the Company establishes a joint mechanism withrelevant departments at headquarters to intervene in advance and provide adviceand recommendations on decision-making procedures and information disclosurecompliance. TheCompanywillcontinuetoadheretoitscompliance-orientedandefficientandstandardized operations, and will continue to improve its corporate governancestandards and effectively protect the interests of investors. The Company willfirmly refrain fromtouching theregulatory red lineand comply with the relevantrequirementsoftheCentralCommitteeoftheCommunistPartyofChina,theStateCouncil, the State-owned Assets Supervision and Administration Commission oftheStateCouncil(hereinafterreferredtoasthe“SASAC”)andtherulesgoverningthe listing of stocks in the listing places, focusing on matters such as relatedparty transactions, major investment and financing projects, external guaranteesand other matters. The Company will strictly adhere tothe bottom line ofcompliance, follow rules and exercise the functions and roles of each governancebody, especially the board of directors, in accordance with the rules, powers andresponsibilities. The Company will further improve its mechanism and system,continuously refine its corporate governance system, especially in aspects such asboard building, information disclosure and market capitalization management, andstrengthen the institutional support to ensure that compliance is integrated intothe process and mechanism, and that the system is adequately safeguarded andfunctioning. The Company will continue to optimize the relationship among thegovernance bodies, and persistently improve the corporate governance mechanismthat is legally defined, transparent, coordinated, and effectively balanced. TheCompany will comprehensively refine the management of the meeting process,focusing onthe communication with external directors, and optimizing theefficiencyoftheoperationoftheboardofdirectors. VI. STRENGTHENINGTHERESPONSIBILITYOFTHE“KEYMINORITIES” TheCompany maintains close communication with its actual controller, thecontrolling shareholder, shareholders holding more than 5%,directors andsenior management oftheCompany andothers inorderto convey regulatoryrequirements in a timely manner. The Company organizes the participation of itsdirectors and senior management in trainings hosted by the SASAC, securitiesregulatory authorities, and listed company associations to study and understandimportant policy documents andmeeting spirits oftheCentral Committee ofthe Communist Party ofChina and the State Council, grasp new regulatoryrequirements and corporate governance demands, and continuously improve policycomprehension, strategic insight, risk identification, and scientific decision-makingabilities. The Company will continue to enhance the sense of the responsibilityamong the“Key Minorities” and work together to promote their diligence. The Companywillorganizeitsdirectorsandseniormanagementtoparticipateinworkmeetings,training courses, andother activities organized byregulatory authorities andprofessional associations in strict accordance with regulatory requirements andactualneeds,enhancingthe“KeyMinorities”understandingofcapitalmarketlawsand regulations and professional business knowledge, and continuously improvingself-discipline awareness topromote high-quality development ofthe listedcompany. The Company will continue to evaluate the specific measures of the Action Planandfulfil itsinformation disclosure obligations inatimely manner.Investorsshould be aware that the forward-looking statements included in the Action Planinrelation tofuture plans anddevelopment strategies, among others, donotconstituteanysubstantivecommitmenttoinvestorsbytheCompany,andinvestorsshallpayattentiontotheinvestmentrisks. 中财网
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