On October 25, China Railway Signal & Communication Corporation, a provider of railroad traffic control systems, saw a decrease in revenue and net profit in the first three quarters due to reduced business income from urban rail and engineering projects.

On the evening of October 25, China Railway Signal & Communication Corporation released the third quarterly report for 2024, showing that the company achieved revenue of 20.814 billion yuan, a year-on-year decrease of 15.48%; and achieved a net profit of 2.359 billion yuan, a year-on-year decrease of 8.09%.

In the third quarter, the company achieved operating income of 6.564 billion yuan, a year-on-year decrease of 17.89%; and a net profit of 0.759 billion yuan attributable to shareholders of the listed company, a year-on-year increase of 2.33%.

Specifically looking at revenue from end markets, in the first three quarters of this year, the company achieved revenue of 12.029 billion yuan in the railroad market, which is its main source of operating income, with an increase of 2.19% compared to the same period last year; revenue from urban rail transit business was 5.051 billion yuan, a decrease of 12.28%; revenue from overseas business was 1.77 billion yuan, an increase of 65.90%; revenue from general contracting of engineering projects was 1.917 billion yuan, a decrease of 67.76%; and revenue from other businesses was 47.6371 million yuan, a decrease of 43.17% year-on-year.

China Railway Signal & Communication Corporation (CRSC) belongs to the industry of manufacturing railway transportation equipment, with main business segments including rail transit control system design integration, equipment manufacturing, and system delivery, providing full industry chain services for rail transit control systems.

From January to September 2024, the total value of new external contracts signed amounted to 29.128 billion yuan, a decrease of 42.76% compared to the same period last year. Specifically, in the railway sector, the new contract value was 14.627 billion yuan, an increase of 1.09% year-on-year; in the urban rail transit sector, the new contract value was 4.871 billion yuan, a decrease of 48.68%; in the overseas business sector, the new contract value was 3.911 billion yuan, an increase of 95.39%; and in the general contracting and other sectors, the new contract value was 5.718 billion yuan, a decrease of 77.05% year-on-year.

In the view of practitioners, the competition of China Railway Signal & Communication Corporation in the rail transit market has increased, the bidding rules for railway project construction have changed, the number of general contracting models for urban rail projects has increased, and the traditional business space of the company is being squeezed. With the intensification of competition in the rail transit market, China Railway Signal & Communication Corporation faces greater pressure in signing new contracts.

"Domestically, urban rail transit construction will still maintain a relatively strong momentum." Regarding the recent changes in the company's urban rail orders, Yao Guiqing, an independent non-executive director of China Railway Signal & Communication Corporation, told the Star Daily reporter at the 2024 semi-annual performance briefing held on October 14.

"In terms of new projects, although national policies are tightening, some regions are experiencing a slowdown in urban rail construction in the short term due to factors such as local government debt risks. However, the number of existing projects under construction and planning nationwide is relatively sufficient, still capable of supporting industry development. At the same time, the proportion of new urban rapid rail is increasing year by year, becoming a new growth point for construction." Yao Guiqing further stated.

The Star Daily reporter noticed that, while China Railway Signal & Communication Corporation is advancing its traditional business development, it has recently accelerated its layout in the low-altitude economic sector.

On October 24th this year, China Railway Signal & Communication Corporation's urban rail company signed a strategic cooperation agreement on the low-altitude economy with the Beijing Urban Sub-center Management Committee and Tongzhou District Government.

According to the agreement, China Railway Signal & Communication Corporation will work with the Urban Sub-center to focus on building 38 low-altitude application scenarios in areas such as cultural tourism and urban management. These efforts will be supported by the Intelligent Space Control System ID-Space for low-altitude airspace, constructing infrastructure such as the digital low-altitude flight control platform to boost the development of the low-altitude economy.

Earlier, in terms of low-altitude economic layout, the company had already signed strategic cooperation agreements with cities like Nanjing, Suzhou, Hefei, Guangzhou, and Chengdu.

Regarding the industrialization of the low-altitude economy, Yao Guiqing stated that several subsidiary companies have obtained the Civil Unmanned Aerial Vehicle Operation Certificate, and it is expected that low-altitude economic related businesses will have a positive impact on the company's performance.

As of the first three quarters of 2024, the national social security fund's 110 Portfolio has become one of the top ten shareholders of China Railway Signal & Communication Corporation, holding 33.1432 million shares, with a current stake of 0.31%.