() The business review of the Board of Directors in the first half of 2023 is as follows:
I. Main businesses of the Company during the reporting period
(a) the company’s main business and products The company is the leading supplier of intelligent transportation platform solutions for expressways, trunk roads and urban transportation in China. The company’s main business includes three aspects: first, the smart traffic electronic toll collection business based on ETC, including ETC issuance and sales, electronic toll collection service business, etc., focusing on expanding the construction and operation of expressway and urban traffic toll collection and management systems; Secondly, the business of intelligent transportation operation management system based on cloud technology mainly includes system software development, comprehensive solutions and system technical services of intelligent transportation operation management; Third, the derivative business of smart transportation is mainly to build ecological scenes with "ETC+" as the core, integrate the life of vehicles such as refueling, road economy and car maintenance, and develop the ETC ecosystem business. During the reporting period, there were no major changes in the company’s main business. 1. Intelligent transportation electronic toll collection service The company’s smart traffic electronic toll collection business is mainly based on ETC, including ETC distribution and sales, electronic toll collection services, etc., focusing on the construction and operation of expressway and urban traffic toll collection and management systems. ETC distribution business: The company increased the promotion of ETC distribution in offline outlets and cooperation channels, that is, online platforms, optimized the ETC product system, and greatly increased the circulation. During the reporting period, the company newly developed 908,000 ETC users, an increase of 88.77% over the same period of last year. By the end of June 2023, the number of ETC users of the company had reached 23.058 million, covering 30 provinces and cities across the country. The company has accelerated its business layout, and has established business cooperation relations with 14 OEMs including Changan Automobile, Geely Automobile, Tesla, Weilai, Kia of yueda and Jaguar Land Rover. During the reporting period, the company added SMART elf car and Lotus car front-loading projects, which have been successfully launched. In addition, the company and () innovatively researched and developed ETC smart automobile glass, and realized ETC front-loading in the field of automobile production supply chain, laying a good foundation for the sustainable growth of ETC distribution in the future. At present, Changan Automobile Auchan and Fujian Benz brands have been realized. Users can be locked in advance through the ETC pre-installation mode, which will further enhance the national market share of ETC users. Electronic toll service: With the popularization of ETC, the further improvement of payment rate and the development of new car pre-installation mode, ETC payment has gradually penetrated from expressway to car-related scenes such as parking, refueling and ferry ETC. At present, the ferry ETC payment business has reached cooperation intentions with 22 auto ferry operation platforms in Anhui, Zhejiang, Sichuan, Guangdong and other provinces. As a pilot unit of digital RMB for enterprises in Jiangsu province, the company took the lead in realizing the application of digital RMB payment in the province’s expressways and user travel services, and has now realized the digital RMB payment function of ETC service outlets, Tongbao APP and MTC lanes of some toll stations in the province. During the reporting period, the recovery of expressway toll flow increased significantly, which led to the rapid growth of the company’s electronic toll settlement amount, reaching 23.6 billion yuan in the first half of 2023, an increase of 32.02% over the same period of last year. 2. Smart traffic operation management system business The company’s intelligent transportation operation management system business relies on cloud computing, big data, artificial intelligence, Internet of Things and other technologies to develop and maintain intelligent transportation systems, effectively supporting comprehensive transportation operation decision management and services, and focusing on three major business scenarios of intelligent transportation command and dispatch, operational services and integrated management. It has formed three major service themes of "smooth travel, high quality and smart speed" and six product systems of "dispatching, charging, maintenance, service, integrated management and digital intelligence", which have the leading level in China. Its main customers are government agencies related to transportation management, road and bridge enterprises and institutions, traffic police and other law enforcement units. At present, the company has accelerated the digital transformation of intelligent transportation and deepened the integrated technology path of "cloud-network-edge-end", and has formed a number of intelligent transportation application products and comprehensive solutions with high technical content, strong profitability, scale and sustainability. In February, 2023, the company’s independent innovative products "AI video analysis cloud control platform", "ETC electronic fence", "cloud charging-robot" and "tunnel digital twin technology" appeared at the "Digital Traffic Control" innovative product launch conference in 2023. At present, the company’s scientific and technological products mainly include: dispatching cloud and other series of cloud control platform products, state-owned cloud, SD-WAN intelligent networking technical services, high-speed brain, AI video analysis cloud control platform, free cloud charging solution, charging robot, tunnel digital twin technology and cloud+high-speed intelligent service platform, etc. The relevant products are as follows: (1) Scheduling Cloud "Dispatching Cloud" is a real-time interactive cloud service platform based on the concept of "internet plus Traffic", with travelers as the center, relying on rich advanced technologies and services on the cloud, and built around the emergency handling of expressways, with full coverage of processes, all-round management and full participation of the society. At present, it has achieved large-scale commercial operation, and has been used in expressways and some trunk highways in Jiangsu Province, and extended to Guizhou, Henan, Hebei, Guangxi, Hunan and other provinces. In the first half of 2023, the project newly expanded some high-speed management units outside the province, as well as some industry customers such as traffic emergency management units in prefecture-level cities and county-level cities in the province. In the first half of the year, the business achieved an operating income of 36,948,800 yuan, an increase of 47.57% over the same period of last year. (2) Toll Cloud The "toll cloud" is an independent innovation technology such as license plate "cloud recognition", () processing and fault-tolerant path restoration, which intelligently analyzes multi-dimensional captured data, identifies, locates, tracks and warns "specific vehicles", and builds a toll auxiliary system with accurate accounting, online billing and real-time escape, providing strong support for toll inspection. (3) State-owned assets cloud The "state-owned assets cloud" platform promotes the deep integration of informatization and state-owned assets supervision business around the "three majors and one big" decision-making, property right registration and transformation, foreign investment, financing guarantee and performance evaluation, and realizes the digital transformation of state-owned assets supervision business from decentralization to centralization, supervision information from isolation to sharing, management quality and efficiency from plane to three-dimensional, and supervision process from afterwards to real-time. During the reporting period, the project won the bid for the "Digital State-owned Assets" supervision platform project of Yancheng State-owned Assets Supervision and Administration Commission, achieving a breakthrough in state-owned assets projects at the prefecture level. Up to now, the platform has been applied in Jiangsu State-owned Assets Supervision and Administration Commission, Yancheng State-owned Assets Supervision and Administration Commission, China Communications Construction Co., Ltd. and other provincial state-owned enterprises such as (), Eastern Airport and Suliang Group. (4) Internal control cloud "Internal Control Cloud" is a reusable and customizable full-process digital management software service product for customers. This product uses the concept of flattening and great collaboration to finely manage and control the internal office processes in real time, and changes manual supervision into process supervision and data supervision. Through this product, the processes of information disclosure, document handover, supervision, procurement, salary, contract, meeting, payment, business trip, car use and duty are visualized and managed in a streamlined way, thus realizing the digitalization of organizational structure and process coordination, and greatly improving the office efficiency and management benefits of customers. At present, it has been widely used in expressway operation and management units such as Jiangsu and Shanxi. (5) Conservation of clouds "Maintenance Cloud" takes routine road inspection and maintenance as its core function, and realizes closed-loop road maintenance business management integrating maintenance plan, task assignment, inspection, disease reporting, construction measurement, assessment and statistical analysis, which promotes the transformation of experience management into a programmed and standardized management mode and further improves the efficiency and quality of maintenance management. This product has been applied in Guizhou Expressway and Xuzhou national and provincial trunk highways. Relying on the maintenance cloud, the reporting efficiency of expressway diseases under the jurisdiction of Guizhou Expressway Group increased by 3 times, the inspection efficiency increased by 4 times, and the accuracy of disease identification reached over 92%. In the first half of the year, the business achieved an operating income of 5,004,000 yuan, an increase of 65.61% over the same period of last year. (6)SD-WAN intelligent networking technical services "SD-WAN Intelligent Networking Technology Service" adopts two-way Internet broadband access, and undertakes the functions of safe and stable data transmission of various services from local to cloud. It solves the problems of long construction period, high cost, insufficient network accessibility and difficult data aggregation of traditional networks, greatly reduces the management difficulty, improves the network quality, ensures the stable bearing of expressway toll collection, communication and other services, and realizes cost reduction and efficiency increase. "SD-WAN networking technology" has achieved full coverage of 46 road sections, 95 pairs of service areas, 430 toll stations and 3,500 lanes in Jiangsu road network, supporting data transmission of more than 30 digital services. (7) high-speed brain Through the deep integration and exploration of blockchain technology and transportation industry, "High-speed Brain" has established an autonomous and controllable digital infrastructure, expanded and built a credible data space and value network oriented to the transportation industry ecology, realized the collection, gathering and sharing of multi-factor scenes, full business processes and pan-high-speed ecology, solved the problems of incomplete data gathering, unreliable sharing and transmission, difficult support for business collaboration and difficult establishment of digital ecology, and made overall consideration of the road smooth work by digital means to effectively realize high-speed. In the first half of the year, the above projects have not yet generated income, and it is expected that business income will be generated in the second half of the year. (8)AI video analysis cloud control platform "AI video analysis cloud control platform" is based on multi-source heterogeneous data fusion processing, AI video image algorithm evaluation and analysis, rule engine machine governance, business adaptability deep learning optimization and other technical links, and applies the self-developed "AI square" to construct the event monitoring early warning data that forms automation, visualization and fits the traffic application scene after intelligent identification, data fusion, algorithm analysis, multiple governance and training and learning. The platform can detect traffic accidents, abnormal parking, foreign body scattering, vehicle congestion, vehicle retrograde and other abnormal conditions in real time, and give an alarm prompt in real time. After application, it can greatly improve the highway traffic capacity and the ability to deal with accidents and incidents quickly. The test results show that compared with the traditional event discovery method, the intelligent early warning can be carried out 20 minutes in advance on average through the cloud control platform. The cloud control platform has been applied in East Expressway, Suhuaiyan Expressway and Nanjing-Hangzhou Expressway, and it is expected to be put into use in the second half of the year and generate business income. (9) Free Cloud Charging Solution The construction of "Free Cloud Charging Solution" focuses on "charging robot" and provides an overall solution for highway "free cloud charging", which improves the overall adaptability of toll station functions and reduces the construction cost, and realizes the full decoupling, data integration and online business of the charging system, and realizes the functions of accurate online charging, intelligent real-time audit, synchronous settlement verification and efficient special handling based on cloud big data. At present, a comprehensive charging system software with functions of charging, check-in and auditing has been formed, as well as family hardware products that are highly adapted to it, such as charging robot, digital economy big screen, fog lamp integrated equipment, grating vehicle type recognition integrated machine, integrated intelligent hurdle machine, ETC antenna and controller and license plate recognition camera. At present, the solution has been applied in 14 toll stations, such as (), Ningjingyan Expressway, Yanjiang Expressway, Suhuaiyan Expressway, Lianxu Expressway, Nanjing-Hangzhou Expressway and East Expressway, and 50 toll robots and 344 other family-owned equipment in toll lanes have been deployed. The production environment test shows that the solution can greatly improve the efficiency of expressway toll collection. It is estimated that each toll lane can save 2-3 toll collectors and greatly reduce the cost of expressway operation and management. It is expected that the free cloud charging solution will be widely applied in Jiangsu road network in the second half of the year. (10) Tunnel digital twin technology Based on the two management objectives of "safety" and "smoothness" of tunnels, "tunnel digital twin technology" sets up a "virtual and real bridge" for the integrated operation and management of roads and tunnels, and creates a "Jiangsu model" for the intelligent management of tunnels. This technology can not only realize the real-time presentation of all dynamic and static elements, but also directly operate the feedback on the twin page, which makes the tunnel management more intelligent, effectively solves the operational problems of the largest underwater tunnel in China, such as high requirements for real-time online operation monitoring, difficult emergency rescue, difficult equipment management and control, high requirements for preventive and active management and control, and greatly improves the tunnel operation efficiency. This technology has been demonstrated in Taihu Tunnel, the longest underwater tunnel in China, and has been applied in Yangzhou City Tunnel Group and Tongzi Tunnel in Guizhou. (11) Cloud+high-speed intelligent service platform "Cloud+high-speed intelligent service platform" is a digital high-speed traffic police business cloud platform built around the service management and law enforcement of high-speed traffic police under the trend of "one network for all roads", adhering to the concept of "multi-party joint management, resource joint use and service joint work". The platform can realize the sharing of bad weather data, from passive disposal afterwards to active prevention in advance and active response in the event, which can effectively promote the high-quality development of Jiangsu high-speed traffic safety management and travel service guarantee. The platform has been applied in Jiangsu Provincial Traffic Police Corps. 3. Smart Transportation Derivative Business The derivative business of smart transportation is mainly the ETC ecosystem business related to car life. Relying on the advantages of the number of ETC users and the volume of data, we will build ecological scenes with "ETC+" as the core, integrate user services such as high-speed traffic, parking, refueling, road economy and car maintenance, innovate business models, create derivative services of ETC ecosystem, and provide customers with integrated car life services. During the reporting period, the company actively promoted the construction of ETC ecosystem and innovated the business model of smart transportation derivative business. Adhering to ETC’s strategy of "getting off the road and entering the city", ETC’s smart parking business pioneered the overall solution of "electronic fence" technology in China, effectively solving the problem of "leakage" in traditional parking mode, which has been built and operated in more than 20 cities and counties such as Suqian City, Wuxi City, Taizhou City, Nanjing Gaochun City and Suzhou Taicang City. In the first half of the year, 863 new parking lots were signed up and 767 were put into operation. By June 2023, ETC’s smart parking business had been put into operation. Carry out actions to improve the efficiency of ETC polymerization refueling process and optimize the refueling experience of refueling workers and customers. During the reporting period, the transaction volume of polymerization payment refueling was 787 million yuan, an increase of 41% compared with the second half of 2022; Focusing on the consumer demand of car-related consumer products and car owners’ daily necessities, the company built a "1+1 +2" business service matrix of "Tongbaoxiaodian+TongbaoTik Tok Live+2 Mobile Consumer Terminals" to build an exclusive business service platform for ETC users and provide personalized and customized consumer services; Providing supply chain collaborative services such as customer acquisition channels, product operation strategy optimization and risk management measures for banks, factoring companies, truck transportation platforms and other cooperative institutions, the business has grown rapidly. In the first half of the year, the derivative business of smart transportation achieved an operating income of 13,055,800 yuan, a year-on-year increase of 138.01%. (II) The industry in which the company is located during the reporting period. 1, the company’s industry The company’s main business belongs to the field of intelligent transportation business. It mainly provides software development, overall solutions and technical services by analyzing the information system requirements and system design of customers’ business needs, and develops intelligent transportation electronic toll collection business, intelligent transportation operation management system business and intelligent transportation derivative business. 2, the industry development and development trend Intelligent transportation is an important area of new infrastructure. In recent years, the state has successively issued a large number of policies and measures to support the development of intelligent transportation, and the intelligent transportation industry is in a period of rapid development. The national transportation power strategy, the new infrastructure policy and the Tenth Five-Year Plan have continuously promoted the digital transformation of the transportation industry. From top-level design to supporting implementation, the policy dividend of the smart transportation industry has been continuously released, and the two-wheel drive of policy demand has boosted the smart transportation industry to usher in a sustained and prosperous development, accompanied by deep excavation of data capabilities, which has driven the industry’s efficiency to continue to improve. The recent core policies of the smart transportation industry include the digital economy policy, the new infrastructure policy, the traffic power policy at the national level, and the relevant policies of the Ministry of Transport, the Ministry of Public Security, the Ministry of Industry and Information Technology and other relevant ministries and commissions in transportation planning, traffic safety and order management, and intelligent network connection. The intelligent transportation industry has been growing for a long time. Due to the unbalanced level of economic development and technological development in different regions of China, the investment and construction of intelligent transportation management system in China are uneven in various regions, and the intelligent transportation business also presents certain regional characteristics. According to the forecast of Yiou think tank, the smart transportation market in China will reach 10.6 trillion yuan by 2030, with a broad growth space. It is expected that the technologies related to intelligent transportation will continue to mature in the future, and the intelligent layout of vehicles, roads and clouds will continue to improve, and the market will show a steady growth trend. Policy promotion, customer demand and technological progress have accelerated the transformation of the transportation industry from informationization to digitalization, and data has gradually become one of the core production factors. The characteristics of interconnection and data element empowerment have prompted the intelligent transportation industry to move towards "cloud-network-edge-end" integrated technology integration and life-cycle value operation. The market share of Smart Exchange began to concentrate on the head enterprises with data and algorithm capabilities and in-depth understanding of the industry. In the field of electronic toll collection for smart transportation, electronic toll collection for expressways in China started relatively late, and began to be implemented on a pilot basis in 2005. In recent years, the General Office of the State Council, the National Development and Reform Commission and the Ministry of Transport have successively issued policies to encourage and support the development and application of ETC, and the industry has achieved rapid development. At present, ETC is the most important toll collection method for toll roads in China. With the continuous improvement of the national network toll collection mechanism, the continuous expansion of application scenarios and the continuous improvement of technical level, the application of ETC is moving towards the 2.0 stage. According to the statistics of the Ministry of Public Security, by the end of June 2023, there were 328 million cars in China and 16.2 million new energy vehicles. In the first half of 2023, there were 16.88 million newly registered motor vehicles nationwide, a year-on-year increase of 1.9%; According to the relevant data released by china automobile dealers association, in the first half of 2023, the national second-hand car transaction volume was 8.77 million. Overall, there is still much room for development in this subdivision. 3, the company’s industry status After years of development, the company has actively expanded the national market by virtue of its industry-leading technical advantages, product advantages and operational advantages, and has now become a leading supplier of intelligent transportation platform solutions for expressways, trunk roads and urban transportation. (1) The first listed company in the industry and the national benchmark for the reform of state-owned enterprises. In September, 2022, the company was successfully listed on Shenzhen Stock Exchange, becoming the first listed company in the ETC distribution service industry in China, laying a solid foundation for making better use of the capital market to promote the high-quality development of enterprises. The company is a national "science and technology reform demonstration enterprise", Jiangsu "small double hundred" comprehensive reform enterprise and Jiangsu mixed ownership reform enterprise, making full use of the reform policy and capital market advantages, and has established a sound corporate governance structure and market-oriented operation mechanism. After being evaluated as "excellent" enterprises by the State Council State-owned Enterprise Reform Office for two consecutive years in 2020 and 2021, the achievements of reform practice were evaluated as "benchmark" enterprises (20/159) in 2022, which became a model for the reform of state-owned enterprises. (2) The total number of 2)ETC issuing users ranks among the top three in China. The company is the only ETC distribution service organization in Jiangsu Province, taking the lead in realizing Internet distribution in the industry and realizing the nationwide distribution of distribution business. By the end of June 2023, the company had developed about 23.058 million ETC users nationwide, ranking the top three in the country in terms of total users. The company now has a strong level of software technology, and has established a relatively perfect user service system and channel operation system. (3) The scale of "ETC+" businesses such as parking lots has grown rapidly. As the only main implementation unit of the provincial demonstration area of ETC smart parking in China, the company is based in Jiangsu and has a nationwide layout, deepening the integration and development of high-speed dynamic smart transportation and urban static smart transportation, adhering to the ETC strategy of "going down to the city", and initiating the overall solution of "electronic fence" technology for ETC smart parking business in China, and promoting the application of ETC charging system in large transportation hubs, as well as smart parking lots in different scenes such as hospitals, universities, commercial complexes, tourist attractions and residential properties. In the field of smart transportation derivative business, the company has built a comprehensive ecosystem of smart transportation and continuously innovated its business model, which has great potential for future development. (4) The business of intelligent transportation operation management system is in the leading position in the industry. In the field of intelligent transportation operation and management, the company is in a leading position in the industry, closely following the management and service requirements of the transportation industry, and has successively developed a series of cloud control products, taking the lead in realizing the "cloud" of business in the industry, promoting the national leading level of Jiangsu’s high-speed intelligence, and has been applied in highway networks in 20 provinces across the country such as Guizhou, Hebei and Henan, realizing the national market layout of business. The cloud series products developed by the company based on the cloud network convergence architecture have realized the convergence and sharing of data resources and effective collaboration of business applications, enhanced the emergency command and decision-making ability of traffic operation management, improved the efficiency and safety level of road network operation management, and provided all-round and accompanying information services for the public, constantly promoting the intelligent and digital transformation of expressway industry. Second, the core competitiveness analysis (A) technical advantages 1. Establish a "self-centered, self-controllable, open, integrated, flexible and efficient" R&D system to create the source of key core technologies. The company is committed to the innovation and development in the field of digital transportation, constantly improving its scientific research capabilities, establishing a scientific research and development system that is "self-centered, self-controllable, open, integrated, flexible and efficient", focusing on three business scenarios of intelligent transportation command and dispatch, operation service and comprehensive management, and has successively launched a number of scientific and technological innovations that "lead the direction of the industry, promote transportation reform and subvert the traditional model". Many scientific and technological innovations are at an advanced level in the industry and have formed a "smooth line" By June 2023, the company had acquired 291 intellectual property rights, including 23 invention patents, 73 utility model and appearance patents and 195 software copyrights. During the reporting period, the company obtained the "AAA Credit Enterprise" certification, completed the ISO27001 information security management system certification, and passed the ISO9001 quality management system, ISO20000 information technology service management system and CMMI five-level software capability maturity management system certification. The company led the preparation of the group standard "Jiangsu ETC Smart Parking Construction Specification", which has passed the outline review of Jiangsu Comprehensive Transportation Society; Leading the preparation of the local standard "ETC Smart Cloud Parking Management Construction Specification", which has passed the pre-examination of Jiangsu Provincial Department of Transportation. 2. Build a "1+1+1+N" intelligent ecological alliance and build an ecological system of digital transportation scientific research cooperation. The company has built a "1+1+1+N" intelligent transportation ecological alliance and continuously expanded the "circle of friends" for scientific research cooperation. Strengthen exchanges and cooperation with authoritative scientific research institutions, solve all kinds of "stuck neck" technical problems, and achieve important scientific research and technology research. Strengthen cooperation with well-known colleges and universities, and carry out academic, theoretical and practical multi-dimensional systematic research on key projects. Sign a talent training plan with the software laboratory of Nanjing University, carry out talent introduction and training, and build a software testing and data application laboratory; Cooperate with Nanjing University of Posts and Telecommunications to carry out research on traffic knowledge maps and other fields. Strengthen cooperation with well-known industrial Internet enterprises, realize cross-industry, cross-field and inter-departmental collaborative development mechanism, and jointly build an ecosystem of digital transportation scientific research cooperation. Cooperate with (), Huawei, Tencent Cloud, Shangtang Technology, Qingyun Technology and China Communications Hyde to set up six laboratories, namely, toll station digital twin joint laboratory, 5G edge equipment joint laboratory, industry application center joint laboratory, high-definition video cloud application joint laboratory, smart view joint laboratory and road and meteorological digital early warning joint laboratory. The company has become a strategic partner with () and ZTE to promote the innovative development of the transportation industry in terms of new technologies, new models and new applications. 3, build new infrastructure, rich achievements in scientific and technological innovation. In line with the strategic deployment of the national "new infrastructure" and the requirements of the times, we will further improve the new digital transportation infrastructure technology architecture based on "cloud control", "smart network" as the transmission mode, "smart edge" as the calculation carrier, "smart end" as the IOT unit, and "cloud-network-edge-end" as a whole, so as to promote the digital transformation and intelligent upgrade of expressway network, and promote the automatic driving. The company is recognized as a national high-tech enterprise, a top 10 digital transportation enterprise in Jiangsu Province, a key software enterprise encouraged by the state, a leading enterprise in the high-quality development of modern service industry in Jiangsu Province, an engineering technology research center in Jiangsu Province, an engineering technology research center for smart high-speed travel service and operation in Jiangsu Province, an engineering technology research center for smart transportation cloud services in Jiangsu Province, and a Samsung Shangyun enterprise in Jiangsu Province. The core technology product "Dispatching Cloud" was selected as "Excellent Case of Digital Transformation of State-owned Enterprises in China"; "Digital Innovative Application of Highway Collaborative Command and Dispatching Cloud Service Platform" was selected as a typical case of digital transformation of listed companies in China; "SD-WAN Full Coverage Networking" was selected as an excellent case of "Cloud Computing Standards and Open Source Promotion Conference" and included in "Top Ten Symbolic Projects of Smart Jiangsu"; "Cloud-network-edge-end" digital new infrastructure project and "ETC ecological operation platform" project won the second prize of China traffic investment and financing innovation; "Jiangsu High-speed Brain" was selected as a pilot demonstration project for the development of big data industry in Jiangsu Province; "Jiangsu Expressway’s Integrated Digital Governance and Intelligent Decision-making Platform for Building, Managing and Supporting Services" is included."Smart Jiangsu Key Project" and "Top Ten Symbolic Projects of Smart Jiangsu", and won the "2023 China Expressway Informatization Annual Selection-Best Product" award from China Highway Society; "Eye on the Road-Video AI Intelligent Platform" was selected as an innovative product of artificial intelligence integration in Jiangsu Province in 2022; The project "Research and Demonstration on Key Technologies of Expressway Cloud Audit Management" was selected as the second prize of Science and Technology Award of Jiangsu Comprehensive Transportation Society. (B) Market application advantages In the field of intelligent transportation segmentation, the company has always been deeply involved in the Jiangsu market, and actively expanded the national market by virtue of industry-leading technological advantages, product advantages and operational advantages. By the end of June 2023, the company had developed about 23.058 million ETC users nationwide, covering 30 provinces and cities across the country, with the total number of users ranking among the top in the country. With "ETC+" as the core, a comprehensive intelligent transportation ecosystem in vertical areas such as ETC+ highway, parking, refueling, supply chain service and road economy has been built. In the business field of intelligent transportation operation management system, based on the advantages of independent technology, after years of operation, the company has rich experience in project implementation and achieved a lot of excellent project results. The company actively implements the development strategy of digital economy, develops and promotes digital technology products, and has formed mature business models and products, which have been extended to 20 provinces across the country, providing intelligent solutions for the "new infrastructure" of national transportation. Rich product market application experience provides a strong competitive advantage for the company to expand its business and further develop in the future. (C) Strategic synergy advantages The company makes full use of the advantages of resources, scenes and business in Jiangsu Road Network to create a "test field" and "incubation area" for innovation and creation, promote the incubation and transformation of scientific and technological innovation achievements in the internal market, form mature experiences and models, export them to the national market, and create a smooth internal and external dual-cycle industrial development system; Establish capital and business cooperation relations with China UnionPay, (), Nantong Transportation Group and Tencent, and exert strategic synergy with the advantages of resources, technology and scenarios of each shareholder; Establish good and close cooperative relations with more than ten financial institutions such as Industrial and Commercial Bank of China, Bank of China and China Construction Bank, further promote the integrated development of consumption scenarios and financial services, and enhance the depth and breadth of the company’s services in the field of "transportation+"; Vigorously carry out scientific and technological innovation exchanges and strategic cooperation, and establish strategic partnerships with well-known enterprises such as China Telecom, Huawei, Hikvision, ZTE, Tencent Cloud, Shangtang Technology, Qingyun Technology and China Communications Hyde to promote the innovative development of the transportation industry in new technologies, new models and new applications; Strengthen cooperation with well-known universities such as Nanjing University, Southeast University and Nanjing University of Posts and Telecommunications, and jointly set up a "think tank brain" with scientists, industry experts and college professors to carry out academic, theoretical and practical multi-dimensional systematic research on key projects and form a reproducible, producible and exportable guiding scientific research plan. (D) Management advantages Through years of reform and development, the company has established a complete and effective management system and mechanism, the governance structure is more perfect, the decision-making mechanism is more efficient, the market-oriented selection and employment mechanism is more flexible, the market-oriented incentive and restraint mechanism is more perfect, and the kinetic energy of scientific and technological innovation is effectively stimulated. At present, the company has a professional, mature and stable core team with rich industry experience, technical experience and management experience, which can seamlessly connect the whole process of customer demand, product design, R&D and maintenance services, and has excellent business execution and product realization capabilities. The company’s R&D team has always followed the forefront of industry and technology development, followed the direction of industry development, and constantly learned from industry development, integrating advanced product development and design ideas into the company’s products, providing solid support for the company’s development. In the reform of state-owned enterprises, the company has become a benchmark for the reform of state-owned enterprises, and the reform practice of "Demonstration Action of Scientific Reform" has been selected as an excellent case of the State Council SASAC; The three-year action case of state-owned enterprise reform was selected as a typical case of Jiangsu SASAC. The company was once again selected as one of the national "scientific reform enterprises" and launched a new round of scientific reform action (2022-2025), which will make full use of the new round of reform policies and opportunities, continue to deepen the reform of the system and mechanism, further stimulate the vitality of enterprise development and promote the high-quality development of enterprises. Iii. Risks faced by the Company and Countermeasures 1. Risk of policy change With the sustained and rapid development of China’s economy, the demand for residents’ life and travel is increasing day by day, and the smart transportation industry has developed rapidly. Since the State Council’s "Government Work Report" in 2019 proposed that the provincial toll stations of national expressways should be basically abolished within two years to realize fast toll collection without stopping, the State Council, the National Development and Reform Commission and the Ministry of Transport have successively issued a series of policies to encourage the related construction of non-stop toll collection, creating a good environment for the rapid and healthy development of enterprises in the industry. Although the medium-and long-term planning of the country has clearly focused on the development of the intelligent transportation industry, and the supporting policy of the country for non-stop charging has a strong practical basis and social needs for a long time, if the government’s supporting policies for intelligent transportation related fields, especially ETC technical routes, are adjusted or the pace of implementation is uncertain in the future, the company’s operating performance will be affected to some extent. In view of the above risks, the company will pay close attention to policy changes, strengthen strategic layout, optimize business structure, increase R&D investment and scientific and technological innovation, actively expand new commercial application fields and business models, enhance the company’s anti-risk ability and sustainable development ability, and maintain its leading position in the industry. 2. Industry competition intensifies risks. As one of the important fields of intelligent transportation, ETC industry is becoming more and more market-oriented, and the market competition pattern is in a stage of rapid change. At present, the company is the only authorized ETC issuer in Jiangsu Province. Although it has established a perfect online distribution channel and can realize nationwide ETC issuance, it has not yet established an offline ETC issuance service network outside Jiangsu Province. Due to factors such as local car owners’ habit of choosing to handle ETC business in their permanent residence, there is still great competitive pressure for the company to handle ETC issuance business outside Jiangsu Province. If there are major changes in the future industry policies, industry norms and market competition pattern, the company’s ETC issuance and sales market share is at risk of being seized by competitors. In the field of intelligent transportation business, although the company took the lead in developing a series of products such as cloud control platforms in the industry, which have the first-Mover advantages in products and services and have a high market share, on the one hand, there are companies engaged in similar businesses in all provinces, which have certain market resources and regional service advantages in the local area. In the future, with the improvement of technology and service capabilities of such companies, the company will face greater market competition when further exploring the national business market; On the other hand, the relatively high profit margin of the smart transportation industry also attracts other enterprises to enter the industry through infiltration, merger and reorganization, industrial transformation, etc., and there is a risk of intensified competition in the industry in the future. In view of the above risks, the company will seize the strategic opportunity of digital economy countries, strengthen industry research and market insight, use the deep understanding of smart transportation industry and business, improve the accuracy of understanding user needs and the foresight of market trends, give play to the advantages of technological innovation, enrich product development matrix, and provide customers with all-round solutions; Improve the marketing promotion system, vigorously expand the national product market, expand brand influence, consolidate and increase market share, and enhance market comprehensive competitiveness; Strengthen industry exchanges and technical cooperation, actively build a diversified ecosystem of partners, and build a "moat" with continuous R&D and innovation capabilities. 3, technology update risk The development of intelligent transportation industry needs to effectively integrate advanced information technology, data communication and transmission technology, electronic sensing technology, electronic control technology and computer processing technology on the basis of perfect infrastructure, so as to establish a real-time, accurate and efficient intelligent transportation operation and management system that plays a role in a wide range and in all directions. This industry has the characteristics of fast technology update. If the company can’t accurately grasp the technology development trend of the industry and follow up the direction of technology research and development in the future, or the speed of product research and development can’t match the demand of the industry and competent departments for technology update, the company’s market competitiveness and sustainable development will be adversely affected. In view of the above risks, the company will pay close attention to the dynamic development of technologies in emerging fields, dynamically optimize and adjust the technology planning and research and development direction of new technologies according to the changes in market demand and technology development, strictly manage the research and development and application process, and strengthen the collaborative development workflow of technologies and products; At the same time, the company will continue to increase investment in R&D, strengthen the construction of technical personnel, introduce outstanding technical personnel and integrate internal R&D forces, improve the incentive mechanism for R&D personnel, actively promote the transformation of technological R&D achievements, maintain the overall leading edge of technical teams, and consolidate the leading position in the industry in major business-related technologies.
