1. Company profile: the company is a software and hardware product mainly engaged in designing, implementing and maintaining multi-functional application solutions and selling application solutions for subway information systems in China and Hong Kong. The major shareholder is Beijing Infrastructure Investment Corporation (Beijing Investment), which is wholly owned by Beijing SASAC and is the owner of all subway line assets in Beijing. The company's business section includes 1) subway information system business; 2) subway civil communication business; 3) subway operation business.

2. 15-year performance: the management expects that the performance in the past 15 years is not satisfactory, mainly because the business performance of the subway information system, the main source of revenue of the company, is poor, and the Beijing Municipal Development and Reform Commission has slowed down the progress of tendering and bidding. It is expected that the progress of tendering and bidding will return to the normal speed this year. In addition, the company announced in February 2014 that the fiscal year balance sheet date was changed from June 30 to December 31, so 18 months of revenue in 14 years were classified as annual results.

3. Equipment procurement: the software part of the subway information system equipment is independently developed by the company, while the hardware part will be purchased according to the customer's designated needs and on the premise of receiving the payment, and the company will make some price difference.

4. Civil communications business: on September 29, 2014 and June 29, 2015, the Group successively acquired civil communications assets of 134 stations on 11 lines of Beijing Metro owned by major shareholder JIC. At the same time, JIC promised to resell to the Group the fixed assets and income rights involved in other Beijing Metro civil communication transmission systems that have not yet been completed and settled at an appropriate time and at a reasonable price. Therefore, with the completion of the settlement of subway lines, this business is expected to continue to get the injection of more civil communications assets and become a new driving force for the company's growth. It is expected that a total of 37 stations on four subway lines will be settled and injected into listed companies this year.

5. Revenue from civil communications business: the business customers are the three major domestic telecom operators: China Mobile Limited, China Unicom and China Telecom Corporation. Beijing Investment Corporation has signed a series of agreements and charging standards for the use of civil communication systems in Beijing subway stations. At present, the 2G business income is 400,000 yuan / station / year for the three operators, the 3G business income is 60,000 yuan / station / year for the three operators, and the 4G business income is 77000 yuan / station / year for each operator. In addition, as of the end of 14th, Beijing Metro has a total of 318 stations, which is expected to reach about 450 stations by 2020. As the only operator of civil communications business, the company will continue to receive the injection of relevant assets to add impetus to the growth of this part of the business.

6. consideration and amortization of civil communications business: the purchase consideration on September 29, 2014 is 96 million yuan, and the purchase consideration on June 29, 2015 is 76.5 million yuan, totaling 170 million yuan, with a useful life of 13 years and an annual amortization of more than 13 million yuan.

7. Subway operation business: the Group signed a joint venture agreement with the operating company on November 5, 2015, and the two sides jointly set up a joint venture company called Beijing Capital Metro Co., Ltd., in which the group and the operating company own 49% and 51% of the shares respectively. The joint venture company is mainly engaged in subway line investment, construction, operation, management, value-added services and property development.

8. Subway operating business income: the joint venture company will first purchase the operating income rights of Beijing Metro Airport Line from Beijing Investment Corporation, including ticket revenue, advertising revenue and rental income. According to a rough calculation, the ticket price of the Beijing Metro Airport Line is 25 yuan per ticket, with an average passenger flow of 35000 yuan per day in 15 years. According to this calculation, the ticket alone will contribute more than 300 million yuan to the income of the joint venture company in one year. As the company acquires only operating income rights, the depreciation and maintenance costs of the airport subway line do not need to be borne by the company, which will significantly improve the company's profitability. In addition, the acquisition period is 30 years, if the ticket increase, vehicle encryption, or passenger flow growth, the joint venture revenue will be increased accordingly.

9. Future growth: as of 2015, the length of Beijing's subway is 554 kilometers. According to the plan, the mileage of Beijing subway will reach 998 kilometers by 2020, whether it is the subway information system needed for the new line to be put into production, or after the final accounts are gradually completed, the continuous injection of subway civil communications assets, or the considerable revenue and strong profitability generated by subway operations can ensure the sustainable and rapid development of the company in the future.

10. Beijing-Tianjin-Hebei Intercity Railway: Beijing Investment Corporation, Tianjin Railway Construction Investment Holdings Co., Ltd., Hebei Construction Investment Co., Ltd., Hebei Construction Investment Co., Ltd., and Beijing Railway Administration established Beijing-Tianjin-Hebei Intercity Railway Investment Co., Ltd., of which Beijing Investment serves as the chairman and Mr. Hao Weiya, a non-executive director of China Urban Rail, serves as the chairman of the company. Beijing-Tianjin-Hebei plans to build 23 new inter-city railways in the future, with a total size of 3400 kilometers. The company is expected to expand its business market and follow the joint venture out of Beijing, and there will be more room for development.

11. Summary and suggestions: the company relies on the strong capital strength of the major shareholder Beijing Investment, and its business scope has expanded from the original subway information system to the areas of subway civil communications and subway operation. Beijing Investment is also expected to continue to inject high-quality assets into listed companies in the form of light assets to ensure the sustainable and rapid growth of the company's future revenue. In addition, affected by the slowdown in the bidding progress of the Beijing Municipal Development and Reform Commission, although the company's performance in 2015 was poor, the difficult period has passed, and the existing business is expected to return to the rapid growth path this year. We are optimistic about the development of the company's existing business and new business, and suggest that we actively pay attention to it.