Qianfang Technology's 2018 Semi-annual Board of Directors Operation Review

Qianfang Technology (002373)'s 2018 semi-annual board of directors business review content is as follows:

I. Overview

2018 is an important year for the company's development and the first year of implementing the development strategy of "one body with two wings". During the reporting period, the company completed the merger and acquisition of Uniview Technology, a leading company in smart security. The company has accumulated advantages in big data, products, solutions and industry knowledge in the industry of smart transportation and smart security for more than ten years, as well as the all-round collaboration between Qianfang Technology and Uniview Technology, and comprehensively expands the core of smart transportation and smart security. An innovative smart city business composed of

In the first half of 2018, under the pressure of complex domestic and foreign environments, as well as the intensified competition in the industry and the increasing investment in market channels and research and development, the company still maintained a good development in the smart transportation and smart security markets through its own operating efforts The business performance continued to grow steadily. During the reporting period, the company realized a total operating income of 2,874,810,602.30 yuan, an increase of 49.94% over the same period of the previous year; realized a net profit attributable to shareholders of listed companies of 286,911,175.74 yuan, an increase of 53.02% over the same period of the previous year.

1. The smart transportation business grew steadily, and some sub-sectors continued to maintain strong competitive advantages

In the first half of 2018, the company's smart transportation business achieved revenue of 1,498,439,700 yuan, a year-on-year increase of 36.48%.

From the perspective of segmented fields, the company continues to maintain a leading position in the fields of smart expressways and transportation informatization, and maintains a leading position in the industry in terms of rail transit PIS, and maintains a leading position in the analysis and application of big data in transportation and civil aviation. Among them, in terms of urban smart traffic management business, through internal integration and the introduction of talents, an independent urban traffic segment has been established, and the comprehensive urban traffic management business with traffic congestion as the main breakthrough point has been comprehensively developed, and phased breakthroughs and market influence have been achieved. .

In the field of smart expressways, the company is a leading supplier of smart expressway solutions in China. Its business covers the integration of traditional expressway mechanical and electrical systems (monitoring system, toll system, communication system, tunnel system), as well as smart highway products and smart road network solutions. solutions and other services, focusing on building road network operation monitoring and emergency command system, intelligent traffic comprehensive management and control platform, highway traffic volume investigation system, etc. Early warning of abnormal conditions, road network operation management, road transportation management, scientific road network planning, collaborative operation management, emergency response and travel information services provide key technical means and complete data support. Has completed more than 800 highway mechanical and electrical construction projects in 31 provinces (municipalities directly under the central government) in China, with a cumulative mileage of more than 30,000 kilometers and a project excellent rate of 100%. Award", "National Quality Engineering Award" and many other honors, it is a leading enterprise in the field of intelligent transportation construction of expressways in China.

In the first half of 2018, the company's winning bid amount reached the best level in history, including not only the new construction, reconstruction and expansion of road smart transportation projects in the east, but also the new construction, reconstruction and upgrading projects in the central and western regions. The single winning bid amount of the project has also greatly increased. Qingdao Expressway Reconstruction and Expansion Project Mechanical and Electrical Engineering Construction JQJDSG-1 Bid Section "229 million yuan", "Guangzhou-Fozhou-Zhaoqing Expressway Guangzhou Shijing to Zhaoqing Dawang Section Project Foshan Section S7 Mechanical and Electrical Engineering Project" 130 million yuan, "Guangdong Long Sichuan-Huaiji Highway (Lianping-Yingde Section) Electromechanical Engineering Construction JD6 Bid Section” 104 million yuan, Xiamen-Chengdu Expressway Zhangzhou Tianbao-Longyan Jiaoyang Reconstruction and Expansion Project 97.41 million yuan, Sichuan Wenchuan-Maerkang Expressway Project Mechanical and Electrical Engineering Construction JD11 bidding section 87.2 million yuan, Beijing-Tibet Expressway reconstruction and expansion project Wangyuan-Hongsibao section mechanical and electrical engineering 64.07 million yuan, etc., the winning bids are industry-leading.

At present, my country's economy, science and technology are constantly improving, and the traffic volume in major cities has increased sharply, which has also brought great pressure to expressways. In addition to building new expressways, rebuilding and expanding expressways is conducive to promoting my country's economic development. During the "13th Five-Year Plan" period, it is a critical period for expressways to be accelerated into a network. Preliminary statistics show that during the "13th Five-Year Plan" period, the mileage of expressways that need to be expanded and reconstructed nationwide is about 6,400 kilometers. At the same time, in February 2018, the "Notice of the General Office of the Ministry of Transport on Accelerating the Pilot Project of a New Generation of National Traffic Control Network and Smart Highway" proposed that in 9 provinces and cities, infrastructure digitalization, road transportation integration, vehicle-road coordination, Beidou high-speed Comprehensive application of precision positioning, comprehensive management of road network based on big data, comprehensive service of "Internet" road network, new generation of national traffic control network, etc., promote the pilot project of smart highway, and open up more room for development of the company's smart high-speed business.

In the field of urban smart transportation, the company is in a leading position in traffic informationization and management systems, industry data centers and command centers. The field has a large market share, and the key products and solutions provided have been successfully applied in many provinces, municipalities and autonomous regions across the country, as well as in major national events such as the Beijing Olympic Games, the 60th anniversary celebration of the National Day, the Shanghai World Expo, and the Shenzhen Universiade. It has a good demonstration effect. During the reporting period, the company won the bid for the Huizhou City (TOCC) project of 99 million yuan, which is also the largest TOCC bidding project this year, reflecting the company's leading position in the TOCC field.

On the basis of information business, the company further extends the industrial chain to the operation link, and focuses on the operation fields of parking, traffic media and traffic data. The company has carried out the development and deployment of smart parking related products and systems. The company has established a joint venture with Beijing Jingmei Group Co., Ltd. to focus on the investment, construction and operation of Beijing smart parking lots. At the same time, through the implementation of projects such as the overall leasing of the parking lot of the Beijing headquarters base, the company has further increased the investment in the parking operation link, laying the foundation for the development of intelligent transportation services integrating travel and parking. In terms of transportation media operations, the company mainly obtains media resources through the layout of taxi inside and outside advertisements and urban bus electronic stop signs, and develops interactive streaming media advertising business for the traveling crowd. The right to operate taxi LED media advertisements in the city and a number of urban bus electronic stop sign resources.

The company focuses on research and development in emerging fields such as automotive electronic identification, focusing on the research and development of software and hardware products related to electronic license plates, as well as the development of related operation management systems and data applications, providing traffic big data services related to car-related business for multiple industries and industry solutions to meet the management needs of relevant departments including public security, traffic management, safety supervision, municipal administration, environmental protection, public transportation and parking management, and on this basis provide a variety of social service applications for enterprises and the public. In August 2017, the consortium in which the company's Beijing Beida Qianfang Technology Co., Ltd. participated won the bid for the Beijing Municipal Transportation Commission's "Application Research Project of Automotive Electronic Signs in Operational Vehicle Management" and participated in the "Motor Vehicle Electronic Signs Read-Write Equipment Installation" The formulation of national standards for electronic license plates such as "Specifications" has a benchmarking effect in leading the application of RFID technology in the management of commercial vehicles, and is of great significance in promoting the application of automotive electronic identification technology in multiple fields and the development of related industries.

As traffic congestion has become a difficult and painful point in urban traffic management, the demand for systematic urban traffic solutions is urgent, and the need for refined management has emerged. Therefore, the company has established an independent urban smart traffic segment through internal integration and introduction of talents, and has fully entered urban traffic The comprehensive management business starts from congestion relief and is supported by the city (traffic) brain to provide systematic solutions. The solution relies on the technology accumulation of Qianfang Technology in vertical fields such as urban big data resources, smart transportation and smart security, and the technical support of Uniview Technology in the fields of video security and computer vision artificial intelligence, and is based on a multi-source heterogeneous architecture system , emphasizing the sharing and synergy of data and business of various departments, and intends to improve the overall operation and management efficiency of the city. The company has successfully implemented the traffic congestion improvement project in Qingshan District, Baotou.

In the field of rail transit, for the public, the rail transit passenger information service system (PIS) provided by the company has been applied in more than 100 subway lines in 20 cities including Beijing, Shanghai, Guangzhou, Shenzhen, Nanjing, etc., and the core system accounts for about 60% of the country. market share. The high-definition display passenger information system that the company took the lead in building has accumulatively covered more than 70 subway lines in 32 cities across the country, and continues to lead the development of the industry. Secondly, the company participated in and completed the construction, operation and maintenance and technical services of the first and second phases of the Beijing Rail Transit Network Command Center, the first rail transit network command center/information center in my country, which significantly improved the management level and operation of rail transit. efficiency and serviceability.

In the field of smart airports and civil aviation, it is a leading supplier of aviation information solutions and products in the country. It mainly provides smart operation and smart management services for airlines and institutions, including information collection and management systems, information network security, and customer relations. system, operation resource management product system, etc. In the first half of the year, it won the bid for the capital airport inspection system project, achieved a major breakthrough in the field of airport risk control, and won the bid for the WIFI renovation project of the capital airport.

In the field of traffic big data, the company has carried out commercial real-time traffic data information services for nearly ten years. It has a number of patented technologies in the collection, processing and release of traffic information, and has established a complete operation service guarantee system. It collects 8 billion GPS points of various vehicle terminals every day, and has commercially released real-time traffic information services for more than 200 major cities and intercity expressways in China. and other fields have been widely used.

In the field of Internet of Vehicles, it has reached cooperation with many domestic and foreign mainstream manufacturers such as Mazda, Nissan Motor, SAIC Motor, BYD (002594), Dongfeng Yulon, and has cooperated with many TSPs, navigation software vendors, and electronic map vendors in the industry. Cooperative products will be launched in succession in the future. In the field of Internet and mobile Internet, it has reached cooperation with Baidu, Tencent, Sogou and other major location-based service (LBS) Internet service providers, and is providing traffic and travel information services for over 100 million users. Under the trend of rapid development of the mobile Internet, the scale of Internet location-based service applications has grown exponentially.

2. The smart security business is growing rapidly, and artificial intelligence leads the company's technology upgrade

During the reporting period, Uniview Technology successfully entered the capital market, laying a solid capital foundation for its rapid development in the future. In the first half of the year, the company achieved smart security revenue of 1,376,370,900 yuan, a year-on-year increase of 67.97. In the first half of 2018, the company continued to increase investment, and the number of employees of Uniview Technology increased from 2,300 to more than 3,100 during the reorganization. In terms of research and development, the accumulation of network, security, optics, machinery, and electronics has been continuously transformed into products and solutions, and the cases of artificial intelligence and Internet of Things have been continuously obtained. Patents, especially invention patent applications, are industry-leading; in terms of market channel construction, the company The channel continues to sink, and the dealer team has further developed and expanded; in overseas markets, the company has also successively established subsidiaries in Hong Kong, South Korea, and Russia; in order to meet the company's increasing production demand, the annual output value of the intelligent manufacturing base project built by the company in Tongxiang is 70 100 million yuan, showing first-class precision design and production capabilities to global customers, promoting Chinese brands to continue to move forward on the global list, and boosting the continuous expansion of Uniview's scale. The company's global ranking continues to improve, reaching the sixth place in the world in 2017.

With the continuous advancement of the construction of safe cities and smart cities, there are more and more monitoring points, from thousands of roads at the beginning to tens of thousands of roads, and even hundreds of thousands of roads now, video and checkpoints have emerged Huge amount of data. In the face of massive video data, users can no longer simply use crowd tactics to search and analyze. At this time, artificial intelligence technology is particularly important, and it has gradually become the "big trend" of the security industry.

In this context, the company's subsidiary Uniview Technology has evolved the three elements of traditional AI into the six elements of 3 2 1: algorithms, computing power, data, products, engineering, and solutions, and based on front-end and back-end intelligence, storage intelligence, central intelligence, Cloud intelligence and other technical applications have launched the "Uniview Fully Integrated Intelligent Solution", which has achieved comprehensive practical implementation at the level of industry solutions. In October 2017, Uniview Technology released an overall AI solution covering the front and rear ends. Six series of products were unveiled, all of which were named after Chinese mountains and passes, including the second-generation view data center all-in-one machine "Kunlun" and a new generation of hyper-converged view cloud storage. "Qinling", video security intelligent access equipment "Yanshan", smart traffic capture unit "Tianmu", deepin smart camera "Hangu" and face recognition speed gate "Tongguan". The application of the company's artificial intelligence products has also continued to improve, leading the company's technology upgrades and business development. In 2018, as the only representative of a security company, he appeared in the CCTV documentary "Great Weapons" with face recognition and smart city brain. In June 2018, the 18th meeting of the Council of Heads of Member States of the Shanghai Cooperation Organization was held in Qingdao, Shandong. The public security big data platform, Kunlun's AI application has also added a bright color to the actual combat of artificial intelligence, covering the entire Qingdao on duty.

From April to June 2018, Uniview Technology officially released the company's independent intellectual property rights IP multimedia operating system (IPMultimediaOperationSystem) IMOS7.0 in more than 70 cities across the country. As a large-scale security operating system, it solves multimedia services, especially video surveillance services. Regarding the efficiency and reliability of equipment resource management scheduling and services in the system, the system supports open AI interfaces, uses AI and big data processing technologies to serve smart security and smart traffic scenarios, and shares the advantages of artificial intelligence and big data processing with partners. IMOS7.0 version integrates big data and artificial intelligence, and is the core of Uniview Technology's "Four Mountains and Two Passes" series of AI solution products. It has accumulated more than 10 million lines of code, more than 800 authorized patents, and can process trillions in seconds. Multi-dimensional big data, supporting Internet of Things technology.

In the Internet age, while big data brings great convenience, it also creates hidden dangers of personal privacy leakage. In May 2018, Uniview Technology obtained the industry's first certification based on the General Data Protection Regulation (hereinafter referred to as "GDPR") issued by TUV Rheinland (hereinafter referred to as "TUV Rheinland"), marking the Uniview is world-leading in user privacy protection capabilities and has set an industry security benchmark. For users, Uniview products are reliable and reliable, and they can use them with peace of mind.

3. The strategic synergistic effect is gradually highlighted. After the acquisition of Uniview Technology, the company's overall business scale has increased significantly. In 2017, the aggregate revenue scale has exceeded 5.5 billion yuan. The market and social influence continue to increase, and the industry's leading position is highlighted. The smart transportation and smart security sectors will strengthen collaboration, especially in market and business development, complement each other's advantages, and use Qianfang's advantages in the smart transportation industry to further strengthen the application of video surveillance products in the smart transportation industry. The sales revenue of video surveillance products in the smart transportation industry reached 262.2862 million yuan in 2018, an increase of 71.17% compared with the same period in 2017 on a consolidated basis.

At the same time, taking advantage of Uniview Technology's industry advantages in video surveillance, as well as Qianfang Technology's original overall solution capabilities and engineering implementation capabilities, it further expands the application of smart transportation in video surveillance and expands the business coverage of smart transportation. , the company is fully expanding the smart city business with smart transportation and smart security as the core, and the synergy effect is gradually emerging. Among them, the smart application engineering project in the public area of the Beijing sub-center administrative office area won the bid with an amount of 28.21 million yuan, the Hubei Tianhe smart airport project was 13.5 million yuan, and the Taipusi Banner smart transportation project was 16.64 million yuan.

In the next step, the company will further integrate sector resources, further leverage the company's overall advantages, and promote the company's smart transportation and smart security businesses to fully coordinate.

4. Keep up with the development of new technologies and industries such as artificial intelligence, and lay out the smart Internet of Things and intelligent networked automobile industry

In July 2017, the State Council issued the "Notice on the Development Plan of a New Generation of Artificial Intelligence", which clearly stated that the rapid development of artificial intelligence will profoundly change human social life and change the world. The state will vigorously promote the development of my country's artificial intelligence industry. By 2020, it will cultivate a number of leading artificial intelligence backbone enterprises in the world. The scale of the core artificial intelligence industry will exceed 150 billion yuan, and the scale of related industries will exceed 1 trillion yuan. Smart security and smart transportation are important areas for the implementation of artificial intelligence.

The company keeps up with the development of artificial intelligence technology, continuously invests in AI security and machine vision, and has launched a full range of front-end and platform products and solutions; in terms of AI transportation, the company keeps up with the development trend of intelligent networked vehicles (autonomous driving) , has launched a series of V2X products, covering multi-field applications such as networked road network facilities and vehicle terminals, intelligent traffic management and driving services, and can provide safe, efficient, and environmentally friendly all-round solutions for vehicle-road collaboration and intelligent networked automobile industries Series of products and service support.

At the same time, the company's V2X series products have been put into application in the "National Smart Vehicle and Smart Transportation (Beijing-Hebei) Demonstration Zone Haidian Base" and "National Smart Vehicle and Smart Transportation (Beijing-Hebei) Demonstration Zone Yizhuang Base". The demonstration area is equipped with the company's V2X networked communication equipment and systems, and is constructed according to the T1-T5 level test requirements to support the R&D and testing of networked driving.

The company is a member of the China Cellular Vehicles (C-V2X) working group, the chairman unit of the Zhongguancun Intelligent Transportation Alliance, a member of the 5GAA Alliance, and the leading unit of the Beijing Intelligent Vehicles Industry Innovation Center. In 2018, it was jointly recognized as a national enterprise technology center by the National Development and Reform Commission and other ministries and commissions.

In the next step, the company will further increase investment in technology research and development including artificial intelligence, big data and cloud computing, and combine industry advantages to accelerate the implementation of the artificial intelligence industry, laying a solid foundation for the industry of intelligent network and intelligent network vehicles (Internet of Vehicles). well laid out.

2. Risks faced by the company and countermeasures

1. The risk of industry fluctuations

In recent years, my country's GDP has maintained a steady growth, the sustained and stable growth of the macro economy, the rapid advancement of urbanization, and the accelerated layout of infrastructure have provided a favorable environment for the development of the industry. The promulgation of relevant policies, support and guide the rapid development of the industry. However, if there is a major change in the country's macroeconomic situation and changes in the industrial policy orientation of downstream industries, resulting in a slowdown in the development of downstream industries, it may have an adverse impact on the company's development environment and market demand.

In response to the above risks, the company will strengthen the research on my country's smart transportation and smart security guidance policies, development directions and industrial development laws, strengthen industry R&D and innovation, use Internet thinking to improve its own construction and operation ideas and business models, and accelerate the sorting out of various resources and integration, through the establishment of partnerships to build an industrial ecosystem, jointly promote the research and development of common key technologies in the industry and the innovation and upgrading of business models, and jointly promote the construction of ecosystems, joint marketing and expansion of the market.

2. The risk of intensified competition in the intelligent transportation industry

At present, the concentration of my country's intelligent transportation industry is low, and the financial strength and scale of enterprises in the same industry are generally small. Market competition is also mainly concentrated in a certain area, and there are relatively strong enterprises in various regions. After years of development, the company has possessed certain competitive strength, vigorously expanded the national market, and actively promoted the extended development of the market and business. If the company fails to seize market opportunities, vigorously develop emerging business areas, seize market space, actively carry out technological and product innovation, cultivate and develop emerging businesses in this field, and maintain rapid growth, it will face the risk of increasingly fierce competition within the industry.

In response to the above-mentioned risks, the company will increase efforts in technology research and development, promote product innovation and upgrades, maintain the technological leadership of information products, continue to improve product quality and service levels, improve the construction of a nationwide service network, and shape the brand advantages of Qianfang; Diversified market strategy, relying on the existing market resource advantages, vigorously expand emerging businesses in this field, and cultivate new profit growth points for enterprise development; continuously improve efficiency, reduce costs through refined management, and strengthen profit-oriented performance appraisal, Effectively enhance the profitability of enterprises.

3. Risks of smart security overseas business

The overseas business of smart security has developed rapidly. However, there are differences and changes in political systems, economic environments, industry policies, religious beliefs, and cultural customs among countries. If there are changes in the industrial policies, import and export policies, economic situation, etc. of these countries, it may have an adverse impact on the operating performance of Uniview Technology. At the same time, Uniview Technology's overseas business has covered more than 100 countries and regions, and its business scale has continued to expand. If the management team fails to strengthen management in a timely manner and formulate effective business control measures, it may have an impact on the healthy development of Uniview Technology. Secondly, due to the different regions of overseas customers, the economic environment, policy environment and operating conditions are different, there is a risk that accounts receivable cannot be recovered. In addition, with the continuous advancement of the market-oriented reform of the RMB exchange rate in recent years, exchange rate fluctuations have become more and more obvious, and foreign exchange receipts and payments will generate large exchange gains and losses, which in turn will affect the operating performance of Uniview Technology.

In order to deal with the risks of overseas business operations, the company has formulated the following series of countermeasures:

(1) Strengthen team building in the process of actively developing overseas business, conduct full research and demonstration on the local political and economic environment of the country, and reduce legal risks, political risks, management and operation risks that overseas business may bring to the company;

(2) Strengthen the management of overseas distributors, standardize the selection process and standards of distributors, and ensure service capabilities;

(3) Guarantee the timely collection of receivables through advance receipts and purchase of export credit insurance to reduce the risk of losses due to bad debts;

(4) With the increase of overseas business scale, in order to cope with the risk of exchange rate fluctuations, the company can reduce the risks caused by exchange rate fluctuations through forward foreign exchange transactions, early or delayed foreign exchange settlement, and hedging with derivative financial instruments.

4. Risks of new business development

In recent years, the company has actively developed new business layouts, seeking integration and innovation between the traditional transportation industry, mobile Internet, big data, and intelligent connected vehicles in terms of business model and industry depth. Expand the scope of business through both connotation and extension, increase investment, improve the ability from software customization, R&D to hardware production, sales to system integration, and integration, and create a smart transportation industry chain covering from products to services to solutions. . However, driven by new technologies such as mobile Internet, cloud computing, big data, and the Internet of Things, information technology is developing rapidly, and business models are constantly being introduced. There are still uncertainties in seizing market resources and establishing a dominant position in a relatively short period of time, thus forming a new profit growth point for the company.

In response to the above risks, the company will improve the predictability of new business development by tracking the development trend of the new business market, regularly conducting new business discussions, and prudently studying and judging new business investment. By establishing an internal project evaluation mechanism similar to venture capital and strengthening the risk control of early projects, the resulting business risks are reduced.

At the same time, actively explore the industrial investment and development model of sharing risks and benefits with external strategic partners or investment institutions.

5. The risk of bidding for traditional business projects At present, there are dozens of integrators involved in expressway intelligent transportation system business in China, among which there are about ten integrators who are more influential or in the first echelon.

There are no companies with an absolute advantage in the industry. The company is one of the earliest enterprises in China that entered the intelligent transportation system, and its business has covered more than 30 provinces, autonomous regions and municipalities directly under the central government, and it maintains a leading position in the industry as a whole. The intelligent transportation system integration business is generally determined through bidding. Usually, there are about ten companies participating in the bidding for a project, and sometimes non-market factors have a greater impact on the bidding results. If the company fails to further increase market development efforts, enhance the company's brand, technology and financial strength, and optimize service quality, it will affect the company's chances of winning bids in intelligent transportation system integration and lose market share.

In response to the above risks, the company will continue to enhance its core competitiveness, increase market development efforts, improve the construction of a nationwide service network, improve the company's integrity system, and reduce bidding risks by improving its core technology level, brand quality, and service level.

6. Operational compliance risk

The company's business is mainly managed by the holding subsidiary, and the company is mainly responsible for the control and management of the holding subsidiary. However, as the number of subsidiaries invested and established by the company gradually increased, the scale of operation became larger and the organizational structure became more complex. Due to differences in corporate culture, business models, and personnel management, the company faced a new form of management and control. If the company’s management level If it cannot be improved accordingly, it may face business compliance risks caused by corresponding operational management and poor internal control.

In response to the above-mentioned risks, the company has established a relatively complete internal management and control system, and formulated several management systems in organizational management, administrative management, financial and accounting management, etc., to manage the business, personnel, and financial aspects of the holding subsidiaries; Internal control and operation supervision of subsidiaries, strengthen enterprise management and risk control training, and improve the management concept and management level of management teams at all levels.

3. Core Competitiveness Analysis

1. The layout of the industrial chain is complete, and the competitive advantages of market segments are significant

Based on the development strategy of "one body with two wings", the company is committed to becoming a leading enterprise in China's smart transportation and smart security industries. At present, it has formed a complete product and technology structure and a reasonable division of labor and cooperation. The layout of the industrial chain is complete and the synergy advantages are obvious. Each segment has a high competitive advantage.

Among them, in terms of intelligent transportation, the company's business covers urban transportation, highway transportation, rail, civil aviation, parking and traffic big data operations, forming a complete intelligent transportation industry chain in the field of intelligent transportation. Among them, the company is in the domestic leading position in subdivided fields such as traffic flow collection and service system, data center, ETC, traffic emergency command system, TOCC, rail passenger information service system (PIS), expressway electromechanical engineering, and traffic information system , and occupy a high market share.

In terms of smart security, Uniview Technology, a subsidiary of the company, is a global security technology and product solution provider. It is an industry leader with visual, smart, and IoT product technologies as its core. It has a large number of high-end user groups across the country, including government Units, public transport departments, public institutions and large enterprises. According to relevant data, the market share of Uniview Technology's video surveillance business ranks third in China's video surveillance equipment market. Its share in the global market is also expanding day by day. In 2017, it entered the top 6 in the global market (IHS data), and Chinese brands continue to move forward on the global list.

2. Forward-looking strategic layout to seize the commanding heights of the future industry

Under the development strategy of "one body with two wings", relying on its strong scientific research strength and more than ten years of industry data and knowledge accumulation, the company embarks on the business development layout of the next generation of smart transportation and smart security. During the reporting period, on the basis of the steady development of urban transportation, highway transportation, rail transportation and civil aviation business, relying on the innovative support of artificial intelligence and other forward-looking technologies, major breakthroughs were made in smart transportation, smart security industry and Internet of Vehicles forward-looking technologies, and launched The company's V2X products and demonstration roads, as well as a full range of security front-end and front-end products and solutions supported by artificial intelligence, have enhanced the company's competitiveness and sustainable development capabilities, and seized emerging businesses such as future machine vision, Internet of Vehicles, and intelligent networked vehicles. The commanding heights of the field.

3. Continuously invest in a high proportion of research and development, obtain leading technological advantages, and form a virtuous circle of "leading technology-industry application-technical upgrading"

The company attaches great importance to the construction of technical systems and the improvement of R&D capabilities, and invests about 10% of operating income in R&D every year to provide strong support for sustainable development. While ensuring the stable development of the R&D team, it guides the continuous improvement of innovation capabilities. It has R&D institutions in Beijing, Hangzhou, Shenzhen, Xi'an, and Jinan, focusing on the core R&D organizations of technologies and products in various business fields. The research direction covers data mining, Computer vision, deep learning algorithms, distributed computing, opto-mechanical, image processing, cloud storage and other dimensions provide technical driving force for future business development, and actively cooperate with various research institutions and colleges to conduct industry development trend research, Common key technical issues and new technology, new product application demonstration research, undertake government special projects year after year. Recently, it appeared on CCTV as an example of the application of artificial intelligence in urban governance in the popular documentary "Great Power".

The company has won the second prize of the National Technology Invention Award twice, and was jointly recognized as the National Enterprise Technology Center by the National Development and Reform Commission and other ministries and commissions in 2018. As of June 30, 2018, the company has won 34 national and provincial awards, undertaken 50 national, provincial and ministerial major projects, and applied for 1,747 patents, including 1,391 invention patents and 775 software copyrights. Lead or participate in the formulation of 1 international standard, 6 national standards, and 10 industry standards; have computer information system integration first-level qualification, CMMI fifth-level certification, classified information system integration first-level qualification, Internet map service surveying and mapping Class A and other industry qualifications. Signed strategic cooperation agreements with many well-known domestic and foreign companies such as IBM, Intel, NVIDIA, Movidius, Huawei, Inspur, China Communications, China TravelSky, China Construction, CCB, MCC, Beijing Coal, Capital Development, etc., to jointly promote common key points in the industry The research and development of technology and the innovation and upgrading of business models have created a good foundation for the research and development of new technologies and new products and market promotion, forming a virtuous circle of research and development, application, industrialization and further upgrading.

4. Massive traffic data accumulation, big data mining and strong operational strength

As an independent innovative enterprise that has worked in the field of smart transportation and smart security for more than ten years, Qianfang Technology has accumulated a large amount of traffic data through project collection and data exchange, and collects 8 billion GPS points of various vehicle terminals every day. At the same time, the extension has obtained a large amount of road monitoring video data. It has been commercialized to carry out real-time traffic information services, and the scope of release covers more than 200 major cities and intercity expressways in China. Products and services are widely used in vehicle navigation, Internet and mobile Internet, telecom value-added, consumer electronics and other fields. In the future, the company will work together with colleagues in the industry to maximize the use of road traffic capacity through the research of big data, artificial intelligence, distributed computing and other theories and methods, explore and practice cutting-edge applications such as "urban traffic brain", and deeply explore traffic The new kinetic energy of industry development has boosted the leapfrog development of my country's intelligent transportation system.

5. Good customer relationship and brand advantage

As an enterprise that entered the field of intelligent transportation earlier in China, after years of accumulation, the company's business covers more than 30 provinces, autonomous regions and municipalities directly under the central government. A total of more than 500 projects have been undertaken to serve the government and industry managers. The company has maintained a good customer relationship and excellent product reputation. Through the cooperation with competent authorities at all levels in the intelligent transportation and intelligent security business in the past 10 years, the company has won a good reputation and trust for many years of high-quality projects, and has accumulated excellent brand awareness, company recognition and reputation.

Honorary awards won by the company: Yiou Top 30 Security AI Innovation Enterprises in 2018, Top Ten Outstanding Enterprises in China's Traffic Video Surveillance Industry in 2017 by Saiwen Transportation Network, Top 30 Enterprises in China's Intelligent Transportation in 2017, National Intellectual Property Demonstration Enterprises, China Top 100 Enterprises with Comprehensive Competitiveness in Software and Information Services, Top 100 Enterprises with Comprehensive Strength in Beijing Software and Information Services Industry, Achievement Award for Top 100 High-Growth Enterprises in Zhongguancun, Annual Leading Enterprise in Intelligent Transportation, Internet of Things Enterprise with Most Growth Potential, New Technology and New Product Achievements Silver Award, Core Enterprise of China's Smart City Ecosystem, Top 10 Outstanding Enterprises in Smart Parking, Top 50 Public Transport Announcements in China, Golden Park Award, Typical Application Award of China's Smart City, etc. The company's qualifications and awards fully reflect the company's excellent comprehensive strength in technology, products, quality control, market accumulation, marketing network, etc., and have established a high brand awareness.

6. The team is stable and experienced

The average industry experience of the company's founders and senior management team is about 16 years. The main senior managers graduated from Peking University and Tsinghua University and other institutions of higher learning, and obtained doctoral and master's degrees in related majors, focusing on China's smart transportation and smart security industry-related technologies R&D and business development have a deep understanding of China's smart transportation industry and smart security industry; in addition, the company's business management team is stable, laying a good foundation for long-term development and providing a strong development backing for the company's sustainable and healthy development.