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1. What are the major businesses of the Group?

2. What are the products of the Group?

3. What are the major clients of the Group?

4. What is the Group's market share in the industry? What is the future growth?

5. What is the Group's equity interest in Beijing Jiaoda Microunion? (BJM)

6. Why did the Group acquire BJM?

7. What is the Group's principle for acquisition?

8. What is the room for growth of the Group in the market?

9. What is the entire market expansion plan of the Group?

10. What is the effect of the global economic slowdown on the Group's business?

 

1. What are the major businesses of the Group?

  • China Automation Group specializes in providing safety and critical control systems, control valves, signaling systems, and traction systems and related products for the petrochemical, railway and other industries and railway signaling industries, along with related maintenance and engineering services.

2. What are the products of the Group?

  • Its major products in petrochemical industry include Emergency Shutdown Devices ("ESD"), Fire and Gas Systems ("FGS"), Integrated Turbine and Compressor Controls ("ITCC"), as well as automatic control valves, while products in railway industry include Railway Interlocking System ("RIS"), Centralized Traffic Control System ("CTC"), Train Control Center System (“TCC”) and Automatic Train Supervision System(“ATS”). The Group also provides traction systems and power supply & converting- related equipments in railway industry.

3. What are the major clients of the Group?

  • The Group possesses a strong and renowned clientele which included PetroChina, CNOOC, Sinopec and Sinopec Engineering Inc. in the petrochemical industry. In terms of the railway industry, the Group's clients included China Railway Corporation, Ma'anshan Iron and MTR and China South Locomotive.

4.What is the Group's market share in the industry? What is the future growth?

  • According to the market report issued by a renowned industry research group Frost & Sullivan 2007, the Group secured a market share of 72% in the petrochemical industry in the first half of 2008, and a 30% of market share in the railway industry in China. The Group will strive to acquire a greater market share in future.

5. What is the Group's equity interest in Beijing Jiaoda Microunion? (BJM)

  • Since 14 August 2008, the Group is the controlling shareholder of BJM and holds 76.70% of its equity interest

6. Why did the Group acquire BJM?

  • BJM is one of the only four certified suppliers of RIS and a qualified Centralized Traffic Control ("CTC") product supplier, providing railway-station interlocking software and system integration.
  • With its controlling stake in BJM, the Group secured a leading position in the railway related signaling systems.
  • The Group also overcomes the high entry barriers for providing RIS for the national and local railways

7. What is the Group's principle for acquisition?

  • The overriding principle is that the acquired company is capable of inducing synergies with the two major business segments – petrochemical and railway industry – of the group, such as those corporations in the upstream and downstream of the petrochemical and railway signaling industry
  • The ultimate goal of acquisition is to strive for the best interest of shareholders. The Group will cautiously assess the profit and risk of such and strictly adhere to the listing rules and regulations in Hong Kong

8. What is the room for growth of the Group in the market?

  • As the Chinese economy began to flourish, the sense of safety has been continuously raised and the market demand for the safety control market has been increasing continuously. According to the revenue statistics of Frost & Sullivan, the Compound Annual Growth Rate (CAGR) of the safety and critical market in China is 24.4% as at 2014, showing the market will grow spontaneously

9. What is the entire market expansion plan of the Group?

  • The Group's market expansion plan is to set a foothold on the fact of China's rapid growth and specializes in petrochemical and railway markets. Through organic growth and strategic acquisition, as well as a moderate extent of internationalization, the Group strives to maintain its sustainable growth in the upstream and downstream of its major business.

10. What is the effect of the global economic slowdown on the Group's business?

  • The effect exerted on the Group is rather limited as the projects the Group engages in are mainly large scale integrated projects with a long production period, which are less vulnerable to changing circumstances. Thus, short-term external factors can hardly change the entire development trend.
  • With the increasing awareness of safety in the petrochemical and railway industries, the demand for both system development and upgrade are also increasing, which brings a promising future to the industry.

 

 

 
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