ANNUAL Sustainable Development REPORT 2020 Corporate Information 2 Company Overview 3 Financial Highlights 6 Chairman’s Statement 7 Management Discussion and Analysis 11 Risk Factor Analysis 22 Investor Relations 24 Biographical Details of Directors and 26 CONTENTS Senior Management Directors’ Report 32 Corporate Governance Report 47 Definitions 62 Independent Auditor’s Report 65 Consolidated Statement of Profit or Loss 75 Consolidated Statement of Profit or Loss and 76 Other Comprehensive Income Consolidated Statement of Financial Position 77 Consolidated Statement of Changes in Equity 79 Consolidated Cash Flow Statement 81 Notes to the Consolidated Financial Statements 83 CORPORATE INFORMATION BOARD OF DIRECTORS PRINCIPAL BANKER Executive Directors The Hongkong and Shanghai Banking Corporation Mr. Cao Wei (Vice Chairman) Limited Ms. Xuan Jing (Chief Executive Officer) REGISTERED OFFICE Non-Executive Directors Cricket Square Mr. Zhang Yanyou (Chairman) Hutchins Drive Mr. Guan Jifa P.O. Box 2681 Mr. Zheng Yi Grand Cayman, KY1-1111 Mr. Ren Yuhang Cayman Islands Independent Non-Executive Directors HEAD OFFICE AND PRINCIPAL PLACE OF Mr. Bai Jinrong BUSINESS IN THE PRC Mr. Luo Zhenbang (CPA) Jingtou Plaza, No.6 Xiaoying North Road Mr. Huang Lixin Chaoyang District, Beijing, China AUTHORISED REPRESENTATIVES PRINCIPAL PLACE OF BUSINESS PURSUANT TO RULE 3.05 OF THE IN HONG KONG LISTING RULES Unit 4407, 44/F, COSCO Tower Ms. Xuan Jing 183 Queen’s Road Central Ms. Cheung Yuet Fan Sheung Wan, Hong Kong COMPANY SECRETARY PRINCIPAL SHARE REGISTRAR AND Ms. Cheung Yuet Fan TRANSFER OFFICE IN CAYMAN ISLANDS Suntera (Cayman) Limited (Note) AUDIT COMMITTEE Suite 3204, Unit 2A, Block 3, Mr. Luo Zhenbang (CPA) (Chairman) Building D, P.O. Box 1586, Mr. Bai Jinrong Gardenia Court, Camana Bay, Mr. Huang Lixin Grand Cayman, KY1-1100, Cayman Islands REMUNERATION COMMITTEE Mr. Bai Jinrong (Chairman) Note: Formerly known as SMP Partners (Cayman) Limited with the effective date of change of name from 4 September Mr. Guan Jifa (appointed on 30 March 2020) 2020 Mr. Huang Lixin Mr. Cao Wei (resigned on 30 March 2020) BRANCH SHARE REGISTRAR AND TRANSFER OFFICE IN HONG KONG NOMINATION COMMITTEE Tricor Investor Services Limited Mr. Zhang Yanyou (Chairman) Level 54, Hopewell Centre Mr. Bai Jinrong 183 Queen’s Road East Mr. Huang Lixin Wanchai, Hong Kong AUDITORS WEBSITE KPMG www.biitt.cn Public Interest Entity Auditor registered in accordance with the Financial Reporting Council Ordinance STOCK CODE 1522 LEGAL ADVISERS TO THE COMPANY Chiu & Partners 2 BII Railway Transportation Technology Holdings Company Limited Annual Report 2020 COMPANY OVERVIEW COMPANY INTRODUCTION The Group is a high-tech enterprise specialising in the field of railway transportation, integrating investment and financing, technology R&D, and intelligent railway transportation construction, operation and maintenance. The Company was listed on the Growth Enterprise Market (GEM) of the Stock Exchange on 16 May 2012 and transferred to Main Board of the Stock Exchange on 6 December 2013, with the stock code of 1522. The Group, which concentrates on railway transportation industry for more than a decade, focuses on two core businesses, namely: Its intelligent railway transportation business provides hardware and software intelligent railway products and services to clients in high-speed rail, intercity, urban and transportation suburban railway, subway and other fields in both domestic and overseas markets. It is an industry leader in China in terms of PIS and AFC businesses. As for its infrastructure information business mainly based in Beijing, the infrastructure Group is a leading provider of civil communications transmission systems for information subways and integrated utility tunnel informatisation systems. Strategic Objectives Position: Mission: become a leading energise the railway intelligent system transportation by service provider of intelligent technology railway transportation in China Strategic Themes One Platform: One Body: One Centre: a strategic investment and the core of its principal a big data centre equipped control platform to foster business based on the with core technological industry upgrade and railway transportation competitiveness market value appreciation intelligent system BII Railway Transportation Technology Holdings Company Limited Annual Report 2020 3 Company Overview (continued) MARKET STRATEGY The Group adheres to its market strategy of “relying on Beijing and Hong Kong, radiating across the country, and making presence in international markets”, has been making remarkable results in market expansion. As of 31 December 2020, the Group’s businesses covered 47 cities in 26 provinces, municipalities, autonomous regions and special administrative regions in China, where it provided products and services, including intelligent railway transportation and infrastructure information. As for overseas market, it has expanded into 9 cities overseas in 15 countries and regions, where it provided intelligent railway transportation-related (PIS) products and services. Areas covered by the our businesses in China Beijing Areas covered by our businesses overseas Note: The Group has expanded its footprint to India, Sri Lanka, Indonesia, Costa Rica, the USA, Mexico, Brazil, Bulgaria, Romania etc. 4 BII Railway Transportation Technology Holdings Company Limited Annual Report 2020 Company Overview (continued) SUMMARY WITH FIGURES The Group concentrates on Its businesses cover railway transportation for 16YEARS. 47CITIES 15CITIES in China and overseas in nine countries and regions. It owns and obtains As at the end of 2020, the orders on hand of the Group was approximately 85 344 HK$ BILLION. PATENTS SOFTWARE COPYRIGHTS. 2.06 Technology company Cloud-based ACC system High-tech enterprise capable that has achieved MLC ANCC system designed based on of providing products and standardisation. combining ACC and the micro-service technologies, system integration, MLC systems. architecture. operation services and technical consultation for high-speed rail, normal-speed railway, urban railway transportation, intercity railway, and urban railway. Revenue was approximately Profit attributable to equity shareholders in 2020 amounted to approximately MILLION HK$1,550.0 MILLION in 2020, representing an increase of approximately HK$168.4 representing an increase of approximately 29.8% as compared to 2019. 73.8% as compared to 2019. BII Railway Transportation Technology Holdings Company Limited Annual Report 2020 5 FINANCIAL HIGHLIGHTS For the year ended 31 December 2020 2019 2018 2017 2016 Key profit items (HK$ Thousand) Revenue 1,549,976 1,193,937 453,204 564,587 479,309 Gross profit 615,259 424,779 108,815 113,286 103,985 Earnings before interest, taxes, depreciation and amortization 297,813 209,019 105,303 93,839 66,020 Profit attributable to equity shareholders of the Company 168,407 96,870 47,398 38,554 25,728 As at 31 December 2020 2019 2018 2017 2016 Key statement of financial position items (HK$ Thousand) Non-current assets 1,468,125 1,528,471 703,412 731,123 654,271 Current assets 2,828,905 2,505,375 2,340,020 1,981,904 1,840,626 Total assets 4,297,030 4,033,846 3,043,432 2,713,027 2,494,897 Total liabilities 1,744,026 1,761,306 845,780 498,918 378,370 Equity attributable to equity shareholders of the Company 2,452,617 2,189,216 2,168,810 2,194,076 2,104,699 Financial year 2020 2019 2018 2017 2016 Return to shareholders Earnings per share – Basic (HK$ cent) 8.0 4.6 2.3 1.8 1.7 – Diluted (HK$ cent) 8.0 4.6 2.3 1.8 1.7 Dividend per share (HK$ cent) 2.5 2.0 1.0 1.0 – Net assets per share (HK$) 1.2 1.0 1.0 1.0 1.0 Revenue Gross profit Profit attributable Basic earnings per share (HK$ Thousand) (HK$ Thousand) to equity shareholders (HK$ cent) of the Company (HK$ Thousand) 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 6 BII Railway Transportation Technology Holdings Company Limited Annual Report 2020 CHAIRMAN’S STATEMENT Strategic upgrading Leading by intelligentisation Sustainable growth Mr. Zhang Yanyou Chairman Dear valued shareholders and friends, insisted on its strategies and fought against the pandemic intelligently to resume work and production. The top On behalf of the Board of the Company, I am pleased to priority was still given to our primary businesses in 2020, present the annual results of the Group for FY 2020. with remarkable results made in market expansion. In 2020, we strengthened collaborative innovation and During the unprecedented year of 2020, faced with achieved win-win results through the development COVID-19, we rose to the challenge to fight against of our investment control platform. We updated our the pandemic bravely and developed at a steady pace. intelligentisation-led approach and the product system Meanwhile, 2020 is also a crucial year for the Group to was becoming mature in 2020. We focused on risk implement its development strategy of “New Journey prevention and control, achieving significant results and Remodelling 2021”. It is the last year of the 13th in cutting cost and increasing efficiency in 2020. We Five-Year Plan (FYP) period and a year to formulate the strengthened the foundation and laid a solid foundation proposals for formulating the 14th FYP. In 2020, we for steady development in 2020. BII Railway Transportation Technology Holdings Company Limited Annual Report 2020 7 Chairman’s Statement (continued) RESULTS The Group achieved remarkable results in business The Group recorded revenue of approximately HK$1,550.0 expansion in 2020. Its business in Beijing saw solid million in FY 2020, an increase of approximately development as it participated in the construction of HK$356.1 million or 29.8% from FY 2019. Profit subway, suburban railway and other projects in the attributable to equity shareholders in FY 2020 amounted capital. The Group offered all-round services for the to approximately HK$168.4 million, a year-on-year rise construction of intelligent subway in Beijing, facilitated of approximately HK$71.5 million or 73.8%, marking a the development of railway transportation and made growth for the fifth consecutive year.