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TransInfo Technology 千方科技 (SZSE: 002373), China’s #1 Intelligent Traffic System (ITS) Innovator Powered by Big Data & Artificial Intelligence – H.E.R.O. Innovators Insights from Chairman Xia Shudong 夏曙东 | H.E.R.O. HeartWare | 18 March

What is the value of an artificial intelligence (AI) in providing intelligent and accurate guiding of traffic flow to solve the high-value problem of persistent and growing traffic congestion and in fighting crime and terrorist activities to keep our city safe? At a more personal level, what is the value of this AI in helping one to recover a lost elderly mother with dementia from among the sea of over 100,000 people?

This week, we highlight the under-the-radar listed Asian exponential innovator TransInfo Technology 千方科技 (SHSE: 002373), who is China’s #1 intelligent traffic system (ITS) innovator serving the urban transport, road traffic, rail transportation and civil aviation industries and China’s #3 (world’s #6) intelligent video surveillance company. TransInfo’s “Smart Security” business Univision 宇视科技 was highlighted in the second season of ‘Great Powers’《大国重器Ⅱ》TV show for its “Smart City Brain + Facial Recognition” machine vision artificial intelligence technology which was applied to help an anxious daughter calling the police to recover her lost elderly mother from among the sea of over 100,000 people in only 25 minutes (or just 5 minutes to identify the person and location when the police officer made the decision to turn on the facial recognition system). [Watch YouTube video from 31:00 to 37:00: https://www.youtube.com/watch?v=enOHxoyhN6s]

TransInfo’s “City Traffic Brain” developed in 2017 for its Smart Transportation 2.0 business to provide systematic solutions to ease urban traffic congestion has been deployed successfully in cities such as Beijing Zhongguancun West District and Inner Mongolia’s Baotou City Qingshan District with remarkable results, and the big data & AI “City Traffic Brain” solution transformed a mature ITS market into a multi-year large-scale investment upgrade to the next-generation intelligent inter-connected AI+ transport network that is still at the early-stage of its growth lifecycle. Traffic congestion is estimated to cost around 2% of China’s GDP or one trillion yuan and average traffic volume has grown 9.37% yoy. On 1 Feb 2019, TransInfo won the RMB 83.8m bid to build the “City Traffic Brain” for Beijing CBD Northwest Traffic. The CBD area includes main roads such as East Chang’an Street, East Third Ring Road, Chaoyang North Road and Tonghui North Road. The ground and underground traffic are complicated and more than 680,000 people work in the CBD area every day, which leads to serious traffic congestion and traffic disorder during the morning and evening peak periods. On 12 March 2019, TransInfo won the RMB 139.3m bid to implement its “Smart Security Brain” for the 2019 World Horticultural Expo held in Beijing on April 29 with at least 16 million visitors. TransInfo’s “Smart Security Brain” will comprehensively change the passive situation of current security and prevention work and realize the leap from “passive prevention” to “active prevention and control”, the leap from “video surveillance + GIS map” to “big data + artificial intelligence decision”.

“Haidian District’s ‘City Traffic Brain’ has been used as a demonstration project for all 16 districts in the Beijing city. Haidian’s Zhongguancun West District is a very important demonstration point. In the future, we will promote it to the whole city. The model of Zhongguancun West District has a strong replication effect in the city. There are such needs in the entire 16 districts of Beijing. For example, the 2019 World Horticultural Expo and the 2022 Winter Olympics will definitely put a lot of pressure on its traffic. This problem exists in all districts and counties. The Smart Traffic 2.0 service in fundamentally solving the problem of urban traffic congestion is in the early stage of the breakout, and the prospect is huge,” comments Chairman Xia Shudong 夏曙东 who founded TransInfo in 2000 and controls 38.23% of the shares.

The twin power of Smart Transport and Smart Security has propelled the growth of TransInfo whose share price has nearly doubled to a market value of US$3.75bn as compared to a ~30% rise for the Shenzhen Composite Index since 3 March 2014, the official approval date by the China Securities Regulatory Commission for its relisting and restructuring plan on the Shenzhen Stock Exchange. On 28 Feb 2019, TransInfo announced its preliminary estimated FY2018 results in which sales increased 35.22% yoy to RMB7.245bn and net profit rose 64.74% yoy to RMB 767m, with OP margin of 13.3%, ROE (=EBIT/ Equity) of ~11.5-11.8% and ROA of 7.2-7.6%. The Smart Transport business contributes 52.1% of 1H FY2018 sales with GP margin of 28.7% and sales growth of 36.48% yoy; the Smart Security business accounts for 47.9% of sales with GP margin of 36.1% and sales growth of 68% yoy. Balance sheet is relatively healthy with net cash of RMB 1.289bn (US$192m) (RMB 1.866bn gross cash, RMB 577m gross debt which include RMB 100m corporate bonds issued to qualified investors in Dec 2017) which is around 4.4% of market cap.

The secret foundation to the effectiveness of its “City Traffic Brain” lies in its powerful big data platform. TransInfo has a number of patented technologies in the collection, processing and release of traffic information, and has established a big data system platform that collects more than 10 billion GPS positioning data and average road mileage data exceeding 4.5 million kilometers every day on freight, logistics vehicles, taxis, private cars, as well as traffic data on 5.7 million heavy-duty trucks with a capacity of more than 12 tonnes nationwide (out of a total of 6 million with operating licenses) and the dynamic traffic information service generated based on these data processing covers more than 200 cities across the country and more than 90% of national and provincial roads, including helping to assist the relevant departments to ensure orderly traffic and security during important conferences such as APEC Summit, 2017 BRICS Summit, the National Congress Summit, Hangzhou G20 Summit, etc, providing strong support for provincial-level road management during busy traffic conditions on holiday seasons, and collaborating with Baidu, Tencent and Sogou in providing traffic/travel location-based information services for over 100 million end users.

“During the 2018 National Day holiday, the sudden blizzard in the Ganzi area of Sichuan Province led to the closure of the G318 Kangding Duoshan section, which stranded a large number of passing vehicles. TransInfo’s Smart Road Network Monitoring Platform timely monitored the congested sections and traffic flow, and activated the subsequent emergency response. It plays a key role in the analysis of the impact of surrounding road networks, the deduction of congestion and evacuation trends, and the formulation of vehicle bypass routes,” adds Chairman Xia.

TransInfo differentiates from the conventional project-based systems integrator business model by commanding focused market leadership in mission-critical transport information systems that not only require project upgrades every few years but importantly are increasingly transforming into substantially bigger ticket-sized, higher value-added projects demanding big data insights delivered through the cloud platform to provide intelligent and accurate guiding of traffic flow and improve public safety. These mission-critical information systems include:
(1) Rail transport with a 60% market share in Rail Transit PIS (Passenger Information System);
(2) Expressway transport with a 40% market share in highway electromechanical construction projects and a 10% share in ETC products (electronic toll collection);
(3) Urban transport with a 60% market share in TOCC (traffic coordination and emergency command center) and 50% share in road monitoring system;
(4) Civil aviation with a market share of more than 80% in aviation information solutions with its proprietary flight data decoding platform technology which is the only one with independent IP rights in China, serving 30+ airlines such as Air China, Shandong Airlines, Hainan Airlines, Shenzhen Airlines, Xiamen Airlines, Sichuan Airlines, Kunming Airlines, Chengdu Airlines, Jixiang Airlines, Hong Kong Airlines, and 20+ airports, covering an aircraft fleet size of 2,000+ and serving 40,000+ civil aviation practitioners. TransInfo also led the Beijing Capital Airport Inspection System Project, a major breakthrough in the airport security risk monitoring control system business based on big data analysis.

TransInfo’s Uniview has been the guardian to protect more than 680 Safe City projects, more than 160 “Bright Projects”, more than 625 Safe Universities, more than 40 airports, more than 120 subway lines in 35 cities, more than 50 airports, more than 350 intelligent transportation projects, more than 260 highways, more than 240 landmark commercial buildings, more than 400 large enterprises, more than 200 top three hospitals, more than 400 kindergartens in 11 districts in Beijing, and almost all major summits in China. In order to meet the growing needs of urban public security management and public security, China has launched the “Science and Technology Strengthening Police Construction Project” 科技强警建设工程 and “3111 Project” nationwide since 2003, followed by “Safe City” 平安城市 and “Bright Project” 雪亮工程. In Jan 2018, the “Bright Project” was first written into the Central Committee’s Document No. 1 on the Implementation of the Rural Revitalization Strategy, accelerating the construction of the Safe City/Village. In 2016, the National Development and Reform Commission approved 48 cities for the construction of public security video surveillance; in 2017, 52 new “Bright Projects” were added to support cities. According to the “13th Five-Year Plan”, by 2020, China will realize the construction of public safety video surveillance nationwide, networked by global coverage, network-wide sharing, real-time availability, and full control. Therefore, 2018-2020 will be the key period for the Bright Project from pilot phase to comprehensive deployment.

TransInfo’s Uniview is also the guardian protecting Canada DHL transhipment hub in Ontario and Alberta with anti-minus-55°C extreme cold weather-resistant and ultra-low illumination capabilities; Australia’s Gold Coast; IKEA Kuwait, Carrefour Dubai, the Sports Arena in Lazio Italy, Hilton Hotels UAE; East Africa Monnet Railway, which is the first railway built in the past 100 years and equipped with high protection level IPC, surge protection, explosion-proof and other functions, fully adapt to the harsh power supply environment in Africa; Korea Kagawa University Affiliated Hospital, one of the most well-known medical institutions in Korea, equipped with EMC Class B ultra low radiation, medical grade electromagnetic protection grade, etc.

While TransInfo’s Uniview is #3 in China compared with state-backed leaders Hikvision and Dahua, it is #1 in its patents portfolio and its OS system [IP Multimedia Operation System (IMOS7.0)] has accumulated more than 10 million lines of code with more than 800 patents and used in more than 70 cities to solve the problem of the effectiveness and reliability of equipment resource management, scheduling and service in the video surveillance service system. The OS supports open AI interface and uses AI and big data processing technology to serve smart security and smart traffic scenarios. Big data brings great convenience, but also creates the hidden dangers of personal privacy leakage. In May 2018, Uniview won the first General Data Protection Regulation (GDPR) certificate in the industry issued by Germany’s accreditation giant TÜV. TransInfo’s Uniview also has the best working capital management in the industry ahead of Hikvision and Dahua through its secondary channel distribution model with high-quality partners to deliver customized solutions for end customers and achieve faster receivables repayment to improve cashflow generation. Specifically, Uniview first sells solutions directly to first-level partners who are leading companies with a broad national sales network and good financial status, and first-level partners sells to second-level partners who customized the solution to the end user. Uniview requires the first-tier partners to either prepay or settle in cash for most of the purchase price, reducing receivables risk. Before the acquisition of Univision, TransInfo’s top five customers contribute 16.15% of sales and top five suppliers account for 7.66% of COGS (of which related party suppliers is 2.84%). The estimated FY2018 overall accounts receivables period is around 140-151 days and total receivables period is around 150-163 days. Inventory period is around 100-115 days. TransInfo’s operating cashflow is generally negative in the first half of the financial year before turning more positive towards the second half.

TransInfo is also the industry standard leader leading China’s V2X, the next generation of road-vehicle system. V2X (vehicle-to-vehicle or vehicle-to-infrastructure) is a form of technology that allows vehicles to communicate with moving parts of the traffic system around them, covering various fields such as networked road network facilities and vehicle terminals, intelligent traffic management and driving services. V2X system has a longer detection range, and is completely immune to complex weather and obstacles such as heavy rain and haze, and can make up for the shortcomings of LiDAR laser sensors. The V2X series have been put into use in the “National Intelligent Vehicles and Smart Transportation Demonstration Zone” 国家智能汽车与智慧交通(京冀)示范区 of Haidian Base and Yizhuang Base in Beijing, the first national R&D test and capability assessment for autonomous vehicles. The demonstration area is equipped with TransInfo’s LTE-V2X network communication & vehicle terminal equipment and system, combining intelligent sensing, big data and artificial intelligence technology, which is built according to the T1-T5 level test requirements. In Oct 2018, TransInfo’s V2X solution passed the world’s first V2X “three-span” test (cross-communication module/chip, cross-terminal providers and cross-vehicle manufacturers. In Sept 2018, TransInfo and Baidu Apollo signed a strategic cooperation agreement to jointly develop V2X vehicle-road coordination equipment for autonomous driving which was subsequently successfully deployed in the northern section of Yanchong Expressway. In Nov 2018, at the world’s first V2X interconnection exhibition, automobile manufacturers such as Great Wall, Beiqi Foton, Zhongxing (ZX), adopted the LTE-V2X vehicle terminal and successfully demonstrated seven typical V2X smart traffic scenarios such as speed guidance, vehicle lane change/blind zone detection, emergency brake warning, forward collision warning, special vehicle warning, intersection collision warning, road slippage warning etc.

“The entire road information system has changed a lot. The previous roads did not have the ability to collect information. More collection were for management, not for service. If the roads in the future need to provide services to the car and provide coordinated control, then it must deploy more sensors to provide the perception of the entire road, and then pass this information to the center or to the vehicle to realize real-time vehicle collaboration. The communication network will develop toward high bandwidth, low power consumption, large capacity, and low latency. The transportation system will be connected to the network and there is the need to develop intelligent, real-time system. During the driving process, vehicles equipped with thousands of V2X devices can predict the traffic lights and the countdown of lights in advance through V2X. Even in moving vehicles in visual blind spots, the system can judge and issue early warning prompts. When encountering road conditions such as emergency cornering and wet road surface, the cockpit can receive timely information and display the real-time location. The synergy between vehicles and roads brought by V2X will result in a new market in the re-construction and transformation of the original traffic information infrastructure. Of course, this construction change is a long-term process. The industrialization of V2X should be in the first half of 2019 to 2020. Datang, Huawei, and ZTE have already made LTE-based chip modules. In 2019, high-end automakers will take the lead in installing related equipment. The Ministry of Communications has seven demonstration projects in nine provinces to build seven application systems and a set of support platforms, which are now being implemented. Our V2X equipment and control machines will be widely used, and the next generation of intelligent traffic brain will be built to realize the integration of multi-dimensional traffic data,” comments Chairman Xia.

TransInfo also provides smart travel solutions such as dynamic real-time traffic data in car navigation. In the Mazda project, information services such as real-time road conditions, traffic events, and road conditions provided by TransInfo are all used in the new models that have been mass-produced since July 2016. Through this service, car owners can enjoy timely and accurate information services such as avoiding congested road sections and on-road traffic reports, and can view surrounding road conditions, key regional road conditions, and city road conditions through simple and intuitive road conditions, so as to make an accurate and efficient driving route judgment. TransInfo is also the largest taxi information service operator in China. Through the city taxi information service management platform, the taxi information management level is improved in  the network reservation car travel information service, the network car supervision platform, media management and integrated travel service. This model has been successfully implemented in more than 10 cities in Chongqing, Qinhuangdao, Urumqi, Hohhot, Zhengzhou, Luoyang and Siping.

TransInfo also has some hidden quality investment assets in its balance sheet. In Sept 2015, TransInfo acquired 17.02% of the national passenger transport ticketing system mobile app 12308 for RMB 27m, which is the leading O2O platform in China accounting for 50% of the market share of China’s highway passenger travel market in both transaction volume and coverage. The 12308 platform business covers 26 provinces, more than 3,000 cities, nearly 7,000 bus passenger stations, and the operating ticketing scale reached 3 million tickets per day with a transaction amount of RMB300m. Through 12308, TransInfo cooperates with local bus operators to increase the inter-city traffic data collection portal, enrich the road traffic data layer, and conform to the government’s increasing support for the integrated passenger information integrated service platform. In Sept 2015, TransInfo’s parent invested in the Series A financing of Tingjiantan 停简单 (http://www.tingjiandan.com), now a unicorn in valuation which operates more than 5,000 high-value parking lots such as Joy City, Jinyu Dacheng, Beihang, Shijitan Hospital and Shangri-La in the first and second-tier cities in 15 regions across the country with more than 2 million parking spaces and a parking service platform with more than 50 million service vehicles. Tingjiantan’s core technology also includes a smart license plate recognition billing system which takes only two to three seconds to complete complex billing and payment and eliminates payment disputes.

When investing in Asian companies, it is essential to know what are the other private businesses that the founder/parent group own that are outside of the listed vehicle. One risk is that we are uncertain about TransInfo’s new business in its 29% stake in Qianfang Microfinance, which is the first online microloan company in China in the logistics finance field. It leverages upon TransInfo’s internet-of-vehicle dynamic traffic big data to build a third-party platform to serve truck drivers, individual truck owners and logistics SMEs by providing scenario-based consumer finance and micro-credit loan products with an amount of RMB 3,300-9,900 which can be used for regular payment purposes such as fuel oil card recharge, purchases in shopping mall, or micro withdrawals. So “hardworking” truck drivers (e.g. more truck mileage) are less risky. Qianfang Microfinance has issued to date a total of RMB 410m of loans. Two businesses remain at parent Qianfang Group and outside of the listed TransInfo Tech: (1) Qianfang Finance, which is the majority owner of Qianfang Microfinance and also has factoring and leasing businesses and the Yunwei Credit Information Services which has established a database of 77.79 million corporate legal entities with comprehensive diverse information (industrial/commercial, judicial, banking transactions, identity, education, patents, recruitment, and public opinion) to serve microloans companies, mutual funds institutions, accounting firms, investment companies and other institutions in Chongqing, Shenzhen, Anhui, Guangxi, Xinjiang and other places. Yunwei and Chongqing Hanjiang District Government has also collaborated to construct the credit network demonstration zone in Chongqing Hanjiang District; and (2) Zhongjiao Xinglu Tech (http://www.sinoiov.com) which completed a RMB 700m Series A financing round with Alibaba’s Ant Financial in Dec 2018.

Chairman Xia is more of the Rupert Murdoch-John Malone-Barry Diller type of capital allocator who puts together various assets to bring about the synergy effects, as opposed to the Larry Page-Sergey Brin type of build-from-scratch entrepreneurs. Founded in 2000 by Chairman Xia, TransInfo has a scarred past: It was initially listed on NASDAQ on 31 July 2008, announced privatization plans in Feb 2012, delisted in Oct 2012, and relisted through a A-share backdoor listing on Shenzhen Stock Exchange officially on 3 March 2014 after the restructuring plan was approved by the China Securities Regulatory Commission. The delisting from NASDAQ was partly due to China’s restrictions on foreign investment in Internet services, taxi media advertising and security surveillance/monitoring etc, businesses which TransInfo was evolving and expanding into. The complex restructuring process was also to reduce the conflict of interest in various competing businesses outside of the listed entity controlled privately by Chairman Sun which were subsequently injected back to be integrated and consolidated into the listed company. To finance the 100% acquisition of Univision ta RMB4.546bn (US$677m) which was completed in March 2018, TransInfo issued 363.24m new shares at RMB11.94 per share to related party entities controlled by Chairman Xia. Since the relisting, TransInfo has cleaned up the governance risks and ownership structure risks with the exit of the venture capital/ private equity funds who financed the deal, as well as made several major acquisitions such as Hangzhou Hongquan Digital in March 2015, Yuanhangtong in August 2015, Beijing Palmway Tech in 2016, Univision in March 2018 etc, to complete its transformation into a comprehensive ITS group.

Thus far, of the 65 entrepreneurs and CEOs whom we had highlighted in our weekly research brief HeartWare, around one-third are in our focused portfolio of 40 HERO Innovators, while the rest are in our broader watchlist of 200+ stocks.

We are thankful as always to be invited by John Mihaljevic, Chairman of MOI Manual of Ideas Global, to speak at the upcoming Asian Investing Summit 2019 to take place live online on April 10-11. We look forward to sharing with the MOI community of investors about the distinctive value opportunity in a selected group of under-the-radar Asian SMID-cap exponential innovators who generate high profitability and positive free cashflow in solving high-value problems for their customers and society with a higher sense of purpose, as well as the learning insights from our investment mistakes as the world shifts structurally from Value 2.0 (the world where Charlie Munger nudged Warren Buffett from the Ben Graham-style of statistically cheap net-net asset plays in Value 1.0 towards Value 2.0 in qualitative investing in outstanding companies at reasonable prices) to Value 3.0 where disruptive innovation forces sweeping across industries create ever more “value trap” losers and a selected under-the-radar group of winners with exponential edge.

Our emotional labor of love over the past months in sharing openly our research ideas (to battle-test our ideas by critiques and avoid blindspots in investing) and setting up the proper regulated and transparent UCITS fund structure to protect investors’ interests has deepened our conviction for the positive change that we will make together with H.E.R.O. – and we are now in the final stage of giving birth at end March/April 2019 to H.E.R.O., the only Asia SMID-cap tech-focused fund in the industry and guarding investors’ interests in the regulated UCITS fund structure with daily NAV & daily liquidity and no exit fees.

To our interested clients who have been asking, we sincerely apologize for the prolonged labor in the birth of HERO over the past months as we have been preparing for a coordinated delivery of our whole family of Swiss fund series at end March and HERO will also be invigorated with the healthy seed from farsighted committed long-term institutional clients to journey far to compound value for investors. Do watch out in the coming weeks for our press release on the birth and launch of H.E.R.O.

If you are not moving forward in this exponential world, you are going backwards. If you want to join us at the leading edge of opportunity, if you identify yourself in the values and bigger sense of purpose in H.E.R.O., or you wish to tell from your heart to your most important person, son, daughter, wife, husband, or best friend that you are a farsighted and thoughtful explorer in the H.E.R.O.’s Journey participating in the long-term exponential growth of a selected group of outstanding entrepreneurs, standing up for the embracement of the human spirit, please contact us via email or WhatsApp at +65 9695 1860. Thank you very much for your patience and support and we look forward to growing exponentially with you as we explore the H.E.R.O.’s Journey together.


“One trend everyone now ignores in the field of ‘smart transportation’ is the future development of the industry. The emergence of big data analysis, artificial intelligence and cloud computing has brought about a comprehensive change in the entire transportation system to solve this traffic problem. The future transportation will be the integration and improvement of the entire transportation system from planning and management to intelligentization of participants. It is not just the concept of cars and roads, but a system of ‘people, cars, roads and clouds’. It is the use of big data, artificial intelligence, cloud computing and other technologies to achieve the interconnection of system data, so that data helps cities to think and make decisions, avoid the impact of unexpected events on traffic, and build a traffic environment that is self-regulating and interacting positively with humans,” comments Xia Shudong 夏曙东, founder and Chairman of TransInfo Technology 千方科技 (SHSE: 002373).

TransInfo is China’s #1 intelligent traffic system (ITS) innovator powered by big data analysis and artificial intelligence (AI), serving the urban transport, road traffic, rail transportation and civil aviation industries. TransInfo differentiates from the conventional project-based systems integrator business model by commanding focused market leadership in mission-critical transport information systems that not only require project upgrades every few years but importantly are increasingly transforming into substantially bigger ticket-sized, higher value-added projects demanding big data insights delivered through the cloud platform to provide intelligent and accurate guiding of traffic flow and improve public safety to solve the high-value problem of persistent and growing traffic congestion which is estimated to cost around 2% of GDP or one trillion yuan and average traffic volume has grown 9.37% yoy. These mission-critical information systems include:
(1) Rail transport with a 60% market share in Rail Transit PIS (Passenger Information System);
(2) Expressway transport with a 40% market share in highway electromechanical construction projects and a 10% share in ETC products (electronic toll collection);
(3) Urban transport with a 60% market share in TOCC (traffic coordination and emergency command center) and 50% share in road monitoring system;
(4) Civil aviation with a market share of more than 80% in aviation information solutions with its proprietary flight data decoding platform technology which is the only one with independent IP rights in China, serving Air China, Shandong Airlines, Hainan Airlines, Shenzhen Airlines, Xiamen Airlines, Sichuan Airlines, Kunming Airlines, Chengdu Airlines, Jixiang Airlines, Hong Kong Airlines etc. TransInfo also led the Beijing Capital Airport Inspection System Project, a major breakthrough in the airport security risk monitoring control system business based on big data analysis.

TransInfo has a number of patented technologies in the collection, processing and release of traffic information, and has established a big data system platform that collects more than 10 billion GPS positioning data and average road mileage data exceeding 4.5 million kilometers every day on freight, logistics vehicles, taxis, private cars, as well as traffic data on 5.7 million heavy-duty trucks with a capacity of more than 12 tonnes nationwide (out of a total of 6 million with operating licenses) operating  and the dynamic traffic information service generated based on these data processing covers more than 200 cities across the country and more than 90% of national and provincial roads, including helping to assist the relevant departments to ensure orderly traffic and security during important conferences such as APEC Summit, 2017 BRICS Summit, the National Congress Summit, Hangzhou G20 Summit, etc, providing strong support for provincial-level road management during busy traffic conditions on holiday seasons, and collaborating with Baidu, Tencent and Sogou in providing traffic/travel location-based information services for over 100 million end users.

TransInfo’s “City Traffic Brain” developed in 2017 for its Smart Transportation 2.0 business to provide systematic solutions to ease urban traffic congestion has been deployed successfully in cities such as Beijing CBD Northwest Traffic, Beijing Zhongguancun West District, Inner Mongolia Baotou Qingshan District etc, and the big data & AI “City Traffic Brain” solution transformed a mature ITS market into a multi-year large-scale investment upgrade to the next-generation intelligent inter-connected AI+ transport network that is still at the early-stage of its growth lifecycle.

In March 2018, TransInfo completed the 100% acquisition of Uniview 宇视科技 who is China’s #3 (world’s #6) intelligent video surveillance company to further enhance its core competitiveness. TransInfo financed the RMB4.546bn (US$677m) Uniview acquisition by issuing 363.24m new shares at RMB11.94 per share to related party entities controlled by Chairman Xia. TransInfo synergized Uniview’s machine vision artificial intelligence technology and video security technology with its accumulation of know-how in ITS and urban big data traffic to further enhance its core competitiveness in “Smart Traffic + Smart Security”, adds a new dimension to its “City Traffic Brain” AI solution, and opens up new potential into new categories of growth.

TransInfo operates two business segments: (A) ITS and (B) Intelligent Security:
(A) ITS (52.1% of 1H FY2018 sales, GP margin 28.7%, sales growth 36.48% yoy)
(1) Rail train transport: TransInfo’s Rail Transit PIS (Passenger Information System) has been applied in more than 100 subway lines in 20 cities including Beijing, Shanghai, Guangzhou, Shenzhen and Nanjing. The core system accounts for 60% market share in China. TransInfo’s high-definition display PIS has accumulated more than 70 subway lines in 32 cities across the country. The urban rail transit intelligent system includes six subsystems: integrated monitoring system, PIS, integrated security system, communication system, automatic ticket checking system and signal system.
TransInfo also participated in and completed the construction, operation and maintenance and technical services of Beijing Rail Transit Network Command & Information Services Center, which is China’s first rail transit network command center, which significantly improved the rail transit management level and operational efficiency. TransInfo is also the first enterprise to provide rail transit asset information management solution to realize the account of the rail transit assets to be in line with the asset life cycle management; the construction of the country’s first high-definition passenger information system; and the construction of the first high-definition subway video surveillance line (Wuhan Metro).

(2) Expressway road traffic: Traffic volume of major cities has increased sharply, which has brought great pressure and traffic congestion to the expressway and road network. During the “13th Five-Year Plan” period, there is a need to accelerate the integration of the intelligent road transportation network with the Beidou Navigation Satellite System’s high-precision integrated application, big data road network integrated management, Internet+ road network integrated services, and a new generation of national traffic control network. The mileage of highways that need to be digitized, expanded and rebuilt in the country was about 6,400 kilometers. TransInfo’s highway electromechanical systems, which include monitoring systems, electronic road pricing/ electronic toll collection systems (ERP/ETC), communication systems, tunnel systems, have been implemented in more than 800 highway electromechanical construction projects in 31 provinces (municipalities directly under the central government), with a cumulative mileage of more than 30,000 kilometers. TransInfo claims a more than 10% market share in ETC products and a 40% share in highway electromechanical construction projects. The expressway undergoes a major overhaul every 30 years, and the lifespan of highway mechanical and electrical equipment is around five years. TransInfo’s self-developed traffic volume intelligent analysis equipment, axle load dynamic weighing system, secondary data center system, equipment management platform and other leading technologies provide traffic flow survey data for national and provincial trunk lines, highways, and urban roads.

(3) Urban transport: Urban intelligent traffic information management business integrates and manages large volume of diverse data to implement road network operation management and monitoring with its data centers; comprehensive traffic coordination and emergency command center (TOCC); intelligent traffic integrated management and control platform; road network traffic flow detection platform; road network abnormal situation warning; road network scientific planning, coordinated operation management and emergency linkage processing and travel information services etc. TransInfo’s urban TOCC solution has been successfully applied in many national provinces, municipalities, autonomous regions, and major national events such as the Beijing Olympic Games, the 60th anniversary of the National Day, the Shanghai World Expo etc. TransInfo claims a 60% market share in TOCC and a 50% share in road monitoring system.
In the transportation media operations, TransInfo has exclusive taxi LED media advertising management rights and several city bus electronic stop sign media ad resources in Urumqi (Xinjiang), Hohhot (Inner Mongolia), Qinhuangdao (Hebei), Zhengzhou (Hebei), Luoyang (Henan), etc. TransInfo is also the largest taxi information service operator in China. Through the city taxi information service management platform, the taxi information management level is improved in  the network reservation car travel information service, the network car supervision platform, media management and integrated travel service. This model has been successfully implemented in more than 10 cities in Chongqing, Qinhuangdao, Urumqi, Hohhot, Zhengzhou, Luoyang and Siping.

TransInfo also provides smart travel solutions such as dynamic real-time traffic data in car navigation. In the Mazda project, information services such as real-time road conditions, traffic events, and road conditions provided by TransInfo are all used in the new models that have been mass-produced since July 2016. Through this service, car owners can enjoy timely and accurate information services such as avoiding congested road sections and on-road traffic reports, and can view surrounding road conditions, key regional road conditions, and city road conditions through simple and intuitive road conditions, so as to make an accurate and efficient driving route judgment.

TransInfo has expanded into smart parking, including establishing a joint venture with Beijing Jingmei Group 京煤集团 to focus on the investment, construction and operation of Beijing smart parking lot, and a 12-year operational right of the parking lot located in Beijing’s Fengtai District headquarters base (nearly 9,000 parking spaces) was acquired. TransInfo also established a joint venture with Shoukai Group 首开集团 to actively expand the smart parking business, and successfully launched the first-ever Wisdom Community Platform 首开千方智慧社区平台, as well as undertook two projects: system management of landside transportation 陆侧交通系统化管理 in Shanghai Hongqiao International Airport and research and demonstration of key technologies in smart parking based on cloud platform for Shanghai Science and Technology Commission. In August 2017, TransInfo participated in the installation of RFID-based vehicle electronic license plate identification and management applications in the Beijing-Tianjin-Hebei pilot project, leading the development of national standards for electronic license plates and the application of automotive electronic identification technology in various fields and related industries.

TransInfo has also collaborated with car makers such as Mazda, Nissan, Shanghai Auto, BYD, Dongfeng Yulong, and TSPs (transit signal priority), navigation software vendors and electronic map dealers to launch a V2X product series in the field of car navigation and networking. V2X (vehicle-to-vehicle or vehicle-to-infrastructure) is a form of technology that allows vehicles to communicate with moving parts of the traffic system around them, covering various fields such as networked road network facilities and vehicle terminals, intelligent traffic management and driving services. V2X system has a longer detection range, and is completely immune to complex weather and obstacles such as heavy rain and haze, and can make up for the shortcomings of LiDAR laser sensors. The V2X series have been put into use in the “National Intelligent Vehicles and Smart Transportation Demonstration Zone” 国家智能汽车与智慧交通(京冀)示范区 of Haidian Base and Yizhuang Base in Beijing, the first national R&D test and capability assessment for autonomous vehicles. The demonstration area is equipped with TransInfo’s LTE-V2X network communication & vehicle terminal equipment and system, combining intelligent sensing, big data and artificial intelligence technology, which is built according to the T1-T5 level test requirements.

In Oct 2018, TransInfo’s V2X solution passed the V2X “three-span” test (cross-communication module/chip, cross-terminal providers and cross-vehicle manufacturers. In Sept 2018, TransInfo and Baidu Apollo signed a strategic cooperation agreement to jointly develop V2X vehicle-road coordination equipment for autonomous driving which was subsequently successfully deployed in the northern section of Yanchong Expressway. In Nov 2018, at the world’s first V2X interconnection exhibition, automobile manufacturers such as Great Wall, Beiqi Foton, Zhongxing (ZX), adopted the LTE-V2X vehicle terminal and successfully demonstrated seven typical V2X smart traffic scenarios such as speed guidance, vehicle lane change/blind zone detection, emergency brake warning, forward collision warning, special vehicle warning, intersection collision warning, road slippage warning etc.

(4) Civil aviation & intelligent airport: TransInfo is China’s leading provider of aviation information solutions and products, providing intelligent operation and intelligent management services for airlines and institutions, including information collection and management systems, information network security, customer relationships system, operational resource management system etc. TransInfo has the most extensive commercial aviation customer group, with a market share of more than 80%. TransInfo uses its proprietary flight data decoding platform technology and big data processing technology to mine and analyze the production resources, production organization and production environment data involved in aircraft operation, and realize the whole process before, during and after the flight, achieving business management and control to provide energy-saving emission reduction, operational safety, cost analysis, route optimization, refined management and other applications. Customers include Air China, Shandong Airlines, Hainan Airlines, Shenzhen Airlines, Xiamen Airlines, Sichuan Airlines, Kunming Airlines, Chengdu Airlines, Jixiang Airlines, Hong Kong Airlines and other airlines. TransInfo also led the Beijing Capital Airport Inspection System Project, a major breakthrough in the airport security risk monitoring control system business based on big data analysis, as well as the Capital Airport WIFI renovation project. Clients include Guangzhou New Baiyun International Airport, Lhasa Gongga Airport, Jinan Yaoqiang Airport, Chongqing Jiangbei Airport, Changchun Longjiabao Airport, Qingdao Airport, Hangzhou Xiaoshan Airport, Kunming Airport, Shanghai Pudong Airport, Zhengzhou Xinzheng Airport, Wuhan Tianhe Airport, Shanghai Hongqiao Airport, Shenzhen Airport.

(B) Intelligent Security (47.9% of sales, GP margin 36.1%, sales growth 68% yoy) With the continuous advancement of the construction of safe cities and smart cities, there are more and more monitoring points. Uniview insists on developing high-end customized products and services, focusing on large-scale project markets to differentiate from the general-purpose products of state-backed market leaders Hikvision (SHSE: 002415) and Dahua (SHSE: 002236). Uniview released its machine vision AI solution in Oct 2017 which has been applied in airports, highways, important intersections, checkpoints, subways etc. For instance, Uniview’s “Shaoguan” facial recognition speed pass door can shorten the recognition time to 0.2 seconds and the maximum concurrency of the camera is 40 people. Uniview’s public security big data platform covered the entire Qingdao and the Zhejiang Provincial Video Surveillance Networking Platform is also built by Uniview.

As at end 2018, Uniview successfully delivered its solution in more than 680 Safe City projects, more than 160 “Bright Projects”, more than 625 Safe Universities, more than 40 airports, more than 120 subway lines in 35 cities, more than 50 airports, more than 350 intelligent transportation projects, more than 260 highways, more than 240 landmark commercial buildings, more than 400 large enterprises, more than 200 top three hospitals, including APEC Summit, Boao Forum for Asia, Hangzhou G20 Summit, Xiamen 2017 BRICS Conference, Disney, etc. In order to meet the growing needs of urban public security management and public security, China has launched the “Science and Technology Strengthening Police Construction Project” 科技强警建设工程 and “3111 Project” nationwide since 2003, followed by “Safe City” 平安城市 and “Bright Project” 雪亮工程. In Jan 2018, the “Bright Project” was first written into the Central Committee’s Document No. 1 on the Implementation of the Rural Revitalization Strategy, accelerating the construction of the Safe City/Village. In 2016, the National Development and Reform Commission approved 48 cities for the construction of public security video surveillance; in 2017, 52 new “Bright Projects” were added to support cities. According to the “13th Five-Year Plan”, by 2020, China will realize the construction of public safety video surveillance nationwide, networked by global coverage, network-wide sharing, real-time availability, and full control. Therefore, 2018-2020 will be the key period for the Bright Project from pilot phase to comprehensive deployment.

Uniview released in April-June 2018 its IP Multimedia Operation System (IMOS7.0) in more than 70 cities to solve the problem of the effectiveness and reliability of equipment resource management, scheduling and service in the video surveillance service system. The OS supports open AI interface and uses AI and big data processing technology to serve smart security and smart traffic scenarios. The OS has accumulated more than 10 million lines of code with more than 800 patents. Big data brings great convenience, but also creates the hidden dangers of personal privacy leakage. In May 2018, Uniview won the first General Data Protection Regulation (GDPR) certificate in the industry issued by Germany’s accreditation giant TÜV.

Uniview uses a secondary channel distribution model with high-quality partners to deliver customized solutions for end customers and achieve faster receivables repayment to improve working capital and cashflow generation as compared to state-backed market leaders Hikvision and Dahua. Specifically, Uniview first sells solutions directly to first-level partners who are leading companies with a broad national sales network and good financial status, and first-level partners sells to second-level partners who customized the solution to the end user. Uniview requires the first-tier partners to either prepay or settle in cash for most of the purchase price, reducing receivables risk.

On 28 Feb 2019, TransInfo announced that its preliminary estimated FY2018 results in which sales increased 35.22% yoy to RMB7.245bn, operating profit increased 8.84% yoy to RMB 961.68m, and net profit rose 64.74% yoy to RMB 767m, with OP margin of 13.3%, ROE of ~11.5-11.8% and ROA of 7.2-7.6%. Balance sheet is relatively healthy with net cash of RMB 1.289bn (US$192m) (RMB 1.866bn gross cash, RMB 577m gross debt which include RMB 100m corporate bonds issued to qualified investors in Dec 2017) which is around 4.4% of market cap. Before the acquisition of Univision, TransInfo’s top five customers contribute 16.15% of sales and top five suppliers account for 7.66% of COGS (of which related party suppliers is 2.84%). The estimated FY2018 overall accounts receivables period is around 140-151 days and total receivables period is around 150-163 days. Inventory period is around 100-115 days. TransInfo’s operating cashflow is generally negative in the first half of the financial year before turning more positive towards the second half.

TransInfo also has some hidden quality investment assets in its balance sheet. In Sept 2015, TransInfo acquired 17.02% of the national passenger transport ticketing system mobile app 12308 for RMB 27m, which is the leading O2O platform in China accounting for 50% of the market share of China’s highway passenger travel market in both transaction volume and coverage. The 12308 platform business covers 26 provinces, more than 3,000 cities, nearly 7,000 bus passenger stations, and the operating ticketing scale reached 3 million tickets per day with a transaction amount of RMB300m. In Sept 2015, TransInfo’s parent invested in the Series A financing of Tingjiantan 停简单 (http://www.tingjiandan.com), now a unicorn in valuation which operates more than 5,000 high-value parking lots such as Joy City, Jinyu Dacheng, Beihang, Shijitan Hospital and Shangri-La in the first and second-tier cities in 15 regions across the country with more than 2 million parking spaces and a parking service platform with more than 50 million service vehicles. Tingjiantan’s core technology also includes a smart license plate recognition billing system which takes only two to three seconds to complete complex billing and payment and eliminates payment disputes.

TransInfo was founded in 2000 by Chairman Xia who controls 38.23% of the shares, of which 22.17% are pledged to finance the acquisition of Uniview. TransInfo has a scarred past: It was initially listed on NASDAQ on 31 July 2008, announced privatization plans in Feb 2012, delisted in Oct 2012, and relisted through a A-share backdoor listing on Shenzhen Stock Exchange officially on 3 March 2014 after the restructuring plan was approved by the China Securities Regulatory Commission. Since the official approval, TransInfo’s share price has nearly doubled to a market value of US$3.75bn as compared to a ~30% rise for the Shenzhen Composite Index. The delisting from NASDAQ was partly due to China’s restrictions on foreign investment in Internet services, taxi media advertising and security surveillance/monitoring etc, businesses which TransInfo was evolving and expanding into. The complex restructuring process was also to reduce the conflict of interest in various competing businesses outside of the listed entity controlled privately by Chairman Sun which were subsequently injected back to be integrated and consolidated into the listed company. Notably, two related businesses remain at Qianfang Group and outside the listed TransInfo: Zhongxing Xinglu Tech (which completed a RMB800m Series A financing round with Alibaba’s Ant Financial in Dec 2018) and Qianfang Finance. Since the relisting, TransInfo has cleaned up the governance risks and ownership structure risks with the exit of the venture capital/ private equity funds who financed the deal, as well as made several major acquisitions such as Hangzhou Hongquan Digital in March 2015, Yuanhangtong in August 2015, Beijing Palmway Tech in 2016 to complete its transformation into a comprehensive ITS group.

On the smart transport industry dynamics, Chairman Xia shares insights on the development from Stage 1.0 to Stage 2.0 and the various changes, including how there is an “ownership change” in shifting from departmental demand to government demand to promote large-scale comprehensive projects: “Research shows that China’s annual congestion costs account for nearly 2% of GDP, about one trillion yuan. The high congestion costs, combined with the huge traffic flow, makes urban traffic management extremely challenging. How to cure and alleviate the intractable urban disease of traffic congestion has become a difficult problem for many cities. Traffic congestion has become a major factor affecting social satisfaction. How do local governments improve transportation?”

“One trend everyone now ignores in the field of ‘smart transportation’ is the future development of the industry. The emergence of big data analysis, artificial intelligence and cloud computing has brought about a comprehensive change in the entire transportation system to solve this traffic problem. The future transportation will be the integration and improvement of the entire transportation system from planning and management to intelligentization of participants. It is not just the concept of cars and roads, but a system of ‘people, cars, roads and clouds’. It is the use of big data, artificial intelligence, cloud computing and other technologies to achieve the interconnection of system data, so that data helps cities to think and make decisions, avoid the impact of unexpected events on traffic, and build a traffic environment that is self-regulating and interacting positively with humans.”

“The smart transportation industry is a process of quantitative change to qualitative change. The original investment in our entire transportation infrastructure construction is focused on ‘civil construction’. The future will inevitably focus on how to use new technology to upgrade the information infrastructure. The center of future intelligent transportation infrastructure construction will shift from ‘civil construction’ to ‘informatization’ to ‘big data and artificial intelligence’. This is not only a huge market opportunity for us in the future but also a structural problem that the society needs to solve.”

“China’s Smart City construction is divided into two stages: (1) Smart City 1.0. In 2012, the Ministry of Housing and Urban-Rural Development issued the ‘Notice on the Pilot Work of National Smart Cities’, which is Stage 1.0 of smart city construction in China. At this stage, the focus is on building a city’s vertical intelligence system around public security, taxation, transportation, urban management, etc., and basically realizes intelligent management based on vertical smart systems, and each vertical intelligent system also produces massive management data. (2) Smart City 2.0. In 2016, several ministries and commissions such as the Ministry of Communications issued a notice to promote the implementation of ‘Internet+’ convenient transportation to promote the development of intelligent transportation. Since 2017, with the development and application of big data technology, China’s Smart City construction has entered the 2.0 development stage. In the second stage, we will open up and integrate the big data resources produced by the vertical smart systems in the first phase of the city, establish a data sharing mechanism in the horizontal direction, improve the efficiency of data use, and build a broad ‘intelligent urban brain’ that is the core of Stage 2.0 of the Smart City. Big data in the transportation field is an important part of the Smart City system and plays an important role in the intelligent development of the city.

“China now views the governance of urban transportation and the improvement of transportation at a very high level. This is not a project for a year or two, mainly a project that lasts for 5 to 10 years or even longer. There will be new changes in our intelligent networked vehicles, and the need for transportation changes to the infrastructure of transportation facilities or traffic information which will also be brought to a new level. Therefore, we believe that the demand for smart transportation will last for a very long time, and these customers have not changed and they are still within the scope of our existing customers.”

“At present, urban traffic management is based on the public security traffic management department and the urban road traffic management. The business covers traffic organization, traffic law enforcement, transportation control, traffic safety, vehicle and driver management, etc., to solve the most important two major urban traffic problems: traffic order management and traffic congestion relief. The comprehensive management of urban traffic is not a simple traditional intelligent traffic service such as electronic police and signal control. It not only solves the single goal of law enforcement and traffic control, but also uses comprehensive means to solve the core needs of transportation. Compared with the traditional traffic informationization, our urban traffic comprehensive management business presents new features and new changes, and TransInfo has obvious advantages. Specifically, it mainly reflects three major changes in the urban transportation comprehensive management:

(1) Ownership change in shifting from departmental demand to government demand to promote large-scale comprehensive projects. In the past, a large project tender order by the traffic police is in the tens of millions. Now, the 0.94 square kilometers of the Zhongguancun West District has produced a RMB 200 million large project which we won.
(2) Demand changes from informatization to comprehensive management of transportation.
(3) Technological changes from intelligent transportation to smart transportation. The industry threshold is increasing. The comprehensive urban transportation solution proposed by TransInfo has big data advantages. It uses big data scanning diagnosis from the perspective of a ‘traffic doctor’ to propose an expert management strategy from the perspective of ‘traffic experts’.

“Leveraging off TransInfo’s technological leadership and project implementation capability, we propose a urban transportation comprehensive solution, including: refined traffic organization, standardized traffic engineering, and coordinated traffic control transformation from point control to central control, comprehensive scientific content of traffic enforcement, standardization of public transportation, network of parking management, etc.

On TransInfo’s “Urban Traffic Brain” in its Smart Transportation 2.0 business, Chairman Xia comments: “The severe traffic congestion problem provides a great opportunity for TransInfo’s ‘Urban Traffic Brain’ in our comprehensive traffic management or Smart Transportation 2.0 business. Last year, we improved the traffic in Baotou Qingshan District. From the construction of the project to the present, according to the congestion rankings, the results are remarkable. The future demand is very strong. Different from the mature traditional intelligent transportation business, the urban smart transportation business is more diversified and personalized. The contents of the city’s smart transportation projects implemented by the company are different. The comprehensive reform plan begins with ‘diagnostic optimization’, such as traffic status diagnosis, route, road, parking optimization, overall solution formulation, front-end sensing equipment installation, and then go through the company’s big data analysis and artificial intelligence platform. The algorithm feeds back to signal control to improve traffic and is an integrated traffic management solution. We have accumulated real-time traffic dynamic data for more than 10 years, our own big data analysis and artificial intelligence algorithms, our own signal control system. TransInfo has been engaged in smart transportation projects for many years, and has rich experience and professional ability to implement projects.”

“The business model of the Beijing Zhongguancun West District project is different from the general project. We won the bid for this RMB 200m project which is about one square kilometer. The bidding adopts the design-construction-operation and maintenance integration. It is not simply equipment stacking and integration, but the integration concept, and developing the solutions to the problems. Data analysis capabilities accumulated by TransInfo for more than ten years of the massive urban dynamic traffic data has become a very big competitive advantage for the company, so this part of the solution is the most important, followed by technology development, implementation, operation and maintenance. There are such needs in the entire 16 districts of Beijing. For example, Yanqing, the 2019 World Horticultural Exposition and the 2022 Winter Olympics will definitely put a lot of pressure on its traffic. This problem exists in all districts and counties.”

“Therefore, in the promotion of Beijing, Haidian’s ‘City Traffic Brain’ has been used as a demonstration project for 16 districts in the city. Zhongguancun West District is a very important demonstration point. In the future, we will promote it to the whole city. The model of Zhongguancun West District has a strong replication effect in the city. Beijing’s next comprehensive transportation management is not only on the road, but also on the roadside. The urban planning launched by Haidian integrates the entire landscape transformation. The West District of Zhongguancun is now called the Wisdom West, and the road chairs are equipped with charging sockets. Many infrastructural facilities are all intelligent, which also covers the scope of travel intelligence, such as signal control, parking management planning, providing real-time information services, real-time road conditions. The demand for the entire transportation, from informationization to urban governance, has arrived.. The Smart Traffic 2.0 service in fundamentally solving the problem of urban traffic congestion is in the early stage of the breakout, and the prospect is huge.”

When asked to elaborate on TransInfo’s big data platform advantage, Chairman Xia said: “Based on years of industry hard work, TransInfo’s Transportation Big Data Platform has integrated a variety of unique Industry big data resources, covering daily operating data of 10 million logistics vehicles, passenger vehicles, taxis, and average road mileage data exceeding 4.5 million kilometers every day, and integrating passenger vehicle driving position data with a daily average of 10 billion GPS positioning points, and the dynamic traffic information service generated based on these data processing covers more than 200 cities across the country and more than 90% of national and provincial roads. The dynamic traffic data accumulated by TransInfo for more than ten years is diversified and self-collected. It is also interchangeable, covering high-speed and intercity and urban full-field dynamic data. Among them, the heavy-duty trucks and operating vehicle data owned by TransInfo is unique. At present, there are more than 6 million heavy-duty trucks with a capacity of more than 12 tonnes nationwide with operating licenses. We are currently the world’s largest car networking company with more than 5.7 million trucks online. In addition, the freight service platform of the Ministry of Communications is built by our company.”

“More diversified needs require the support of big data, whether it is for 24 hours a day monitoring for vehicle violations, traffic incidents, road network traffic conditions or for the reporting traffic incident information in a timely manner and the command center dispatches police resources in real time for emergency response. Our dynamic traffic big data has helped to assist the relevant departments to ensure orderly traffic and security during important conferences such as APEC Summit, 2017 BRICS Summit, the National Congress Summit, Hangzhou G20 Summit, etc, providing strong support for provincial-level road management during busy traffic conditions on holiday seasons, and collaborating with Baidu, Tencent and Sogou in providing traffic/travel location-based information services for over 100 million users. Based on this set of self-developed big data platform, TransInfo provides a wealth of traffic information services while continuously improving the data freshness, which can be used to guide traffic and travel.”

“During the National Day holiday this year, the sudden blizzard in the Ganzi area of Sichuan Province led to the closure of the G318 Kangding Duoshan section, which stranded a large number of passing vehicles. TransInfo’s Smart Road Network Monitoring Platform timely monitored the congested sections and traffic flow, and activated the subsequent emergency response. It plays a key role in the analysis of the impact of surrounding road networks, the deduction of congestion and evacuation trends, and the formulation of vehicle bypass routes.”

“This is the foundation our core competitiveness, whether it is for transportation or security. Transportation and security is not just a technology, you need to solve the thousands of real needs of people in travel and safety, you need to understand the industry to understand the needs, and use the results of technological innovation such as big data, AI and other technologies to propose solutions and implement them. This is the driving force and essence of TransInfo’s business development. The world is safer, more convenient, and smarter.”

“Traffic and security data are characterized by large amount of information, diverse sets of data, and complex types of data. How to identify effective data to accurately guide dynamic traffic, improve public safety, and achieve intelligent early warning of key events are the long-term aspects in building TransInfo’s artificial intelligence layout. At present, the platform has launched a total of eight system modules, including:
(1) refined road network operation monitoring system,
(2) intelligent road network operation index system,
(3) road facility pressure monitoring system,
(4) traffic big data environmental monitoring system,
(5) ‘future road network’ traffic operation trend forecast system,
(6) traffic congestion mechanism analysis and auxiliary decision-making system,
(7) major activities and emergency response support system, and
(8) travel information service system with business services covering real-time monitoring, future forecasting, analysis and decision support, emergency support, and travel services.

Among them, the refined road network operation monitoring system and the intelligent road network operation index system have been applied to the Transportation Comprehensive Emergency Command Center of the Ministry of Transport, which plays an important role in road network operation monitoring. The ‘Future Road Network’ traffic operation trend forecasting system has been successfully applied in the road network operation forecast of ministerial, provincial, municipal, expressway companies and commercial enterprises.”

On TransInfo’s V2X business potential, Chairman Xia comments: “The entire road information system has changed a lot. The previous roads did not have the ability to collect information. More collection were for management, not for service. If the roads in the future need to provide services to the car and provide coordinated control, then it must deploy more sensors to provide the perception of the entire road, and then pass this information to the center or to the vehicle to realize real-time vehicle collaboration. The communication network will develop toward high bandwidth, low power consumption, large capacity, and low latency. The transportation system will be connected to the network and there is the need to develop intelligent, real-time system. The synergy between vehicles and roads brought by V2X will result in a new market in the re-construction and transformation of the original traffic information infrastructure. Of course, this construction change is a long-term process. The industrialization of V2X should be in the first half of 2019 to 2020. Datang, Huawei, and ZTE have already made LTE-based chip modules. In 2019, high-end automakers will take the lead in installing related equipment. TransInfo has cooperation with Beiqi Foton and Great Wall Motor etc. The scale of specific implementation has already began to be gradually installed seven or eight models. The Ministry of Communications has seven demonstration projects in nine provinces to build seven application systems and a set of support platforms, which are now being implemented.”

“During the driving process, vehicles equipped with thousands of V2X devices can predict the traffic lights and the countdown of lights in advance through V2X. Even in moving vehicles in visual blind spots, the system can judge and issue early warning prompts. When encountering road conditions such as emergency cornering and wet road surface, the cockpit can receive timely information and display the real-time location. The maximum detection distance by the vehicle radar and camera of the real-time situation can only reach 200 meters. In contrast, the V2X system has a longer detection range, a wider range, and is completely immune to complex weather and obstacles such as heavy rain and haze. Taking traffic lights as an example. driving a vehicle equipped with a V2X device can know the display of the signal lights of the next intersections in advance from the inside of the vehicle within a range of more than 500 meters from the traffic signal. In terms of car-to-car communication, TransInfo’s V2X also has strong practicality. At the National Intelligent Vehicle and Smart Transportation demonstration base and experience site in Yizhuang and Haidian, under the premise of maintaining a safe driving distance, the vehicle in front suddenly took the braking measures, and at the same time, the early emergency brake warning was issued on the instrument of the rear vehicle. In addition, when the vehicle has the need to change lanes, the driver will be reminded of the ‘forward and backward collision warning.’”

“On September 20, 2018, TransInfo and Baidu officially signed a strategic cooperation agreement. The two sides will jointly explore and practice the corresponding cooperation mode for autonomous driving, and provide various solutions for vehicles with automatic driving ability and new urban transportation system. TransInfo and Baidu will give full play to their core technologies and industry advantages to jointly create a new ecosystem of intelligent network and autopilot. At the traffic application level, the two parties will jointly carry out the construction and operation of network-linked autonomous driving and network-connected transportation facilities in urban roads, highways, etc., providing comprehensive solutions for various application scenarios and jointly promoting the implementation of the project.”

“Let’s introduce in detail our V2X construction, product series and applications, which include: vehicle side unit (OBU), roadside intelligent infrastructure, roadside unit (RSU), roadside control unit-edge calculation unit, roadside information prompting unit, cloud control management service platform. We have built a scene of vehicle and road coordination control in Yizhuang to integrate with our existing products in intelligent self-service traffic lights, lane and speed limit control, road traffic guidance and other products. There is also a middle layer with the V2X road test equipment and the interconnection between the traffic signals and other infrastructure sensing devices. We call these the cooperative control equipment. The vehicle road coordination or V2X equipment is also very important equipment. At present, we have developed jointly with the autopilot manufacturers, and have completed the positioning of radar signals and video signals, and the information sharing between multiple vehicles through V2X equipment. In addition, we can expect to complete the construction of a regional-level networked vehicle equipment and platform this year. Our V2X equipment and control machines will be widely used, and the next generation of intelligent traffic brain will be built to realize the integration of multi-dimensional traffic data. We have completed the R&D of road test equipment RSU and vehicle equipment OBU, and successfully passed the world’s first ‘three-span’ interconnection test, which realized V2X in different industry links for the first time.”

When asked to elaborate on the various businesses of TransInfo from smart urban traffic, rail train transport, expressway transport, civil aviation and smart security, Chairman Xia explains patiently:

Smart Urban Traffic
“Our traffic signal control system integrates the technology of fine control, adopts the ‘AI brain’ centralized control concept, optimizes signal control from three dimensions: region, road segment and intersection. The system control strategy and control function are composed of ‘signal optimization module – signal control system’. The signal control machine-vehicle detector is co-processed. The system timely adjusts the signal timing scheme of the intersection and delivers it to the front-end signal according to the detected real-time traffic data of the road network, which can realize the coordinated control of the trunk line and the regional coordination. Various control strategies – manual intervention control, bus priority control, special service control, green wave control, red wave coordinated control, signal special control, reverse overflow control, ramp queuing control – help achieve balanced distribution of road network traffic flow and reduce the number of stops, and delays to improve the dynamic control of traffic flow.”

“For our Urban Traffic Management Control Center for the Chongqing Traffic Police Traffic Big Data Integrated Management and Control Platform Project, each center builds an intelligent traffic big data integrated management and control platform. The layout covers the expressway in the whole line and the main trunk roads in the city, and forms a three-dimensional and grid-based management and control system for the city’s road traffic. The vehicle traffic violations, traffic incidents, yellow-label vehicles/large trucks, and road network traffic conditions in Chongqing are monitored 24 hours a day, and traffic incident information is reported in time. The command center dispatches police resources in real time for emergency response, minimizing traffic congestion risks and reduce traffic safety hazards.”

“Our traffic off-site law enforcement system collects and generates videos and pictures of illegal activities for red light, curfew, retrograde, no seat belt, no driving lane, violation of the ban sign, driving and calling, speeding, blocking number plates, taking bus lanes, pressing yellow lines, illegally turning around, intercepting relevant illegal behavior, verifying the illegal pictures and illegal data to the public security traffic management comprehensive application platform to achieve illegal evidence collection to enforce punishment.”

“Our traffic video surveillance system adopts cloud computing, big data and artificial intelligence technology to build a high-definition, digital, networked and intelligent video surveillance system according to the construction of point-and-line combination, layered defense, closed loop, and convergence into a network with complete video surveillance scheduling, video patrol, video playback, video structure processing, facial recognition, facial comparison, vehicle recognition, image enhancement, event detection, illegal capture and other functions. The system provides data support for real-time control of motor vehicles, drivers and traffic situations in the region to solve traffic accidents, accident prevention and traffic congestion, timely response to traffic emergencies, and to provide clues for public security and criminal cases and for public security reconnaissance.”

“As an example, the Tianjin Binhai New Area Dagang and Tanggu Branch Video Surveillance System Project successfully realized the construction of Peaceful Tianjin by the intelligent monitoring and liberation of police force. The project has built more than 6,300 cameras to achieve starlight-level ultra-low illumination, intelligent tracking and panoramic stitching, providing massive clear data for the construction of a new safe city management big data cloud computing platform for analysis, optimizing police resources.”

“Our road network prevention and control management system collects the data of motor vehicles passing through the monitoring area through the front-end high-definition integrated equipment. There is complete vehicle capture, body identification, license plate recognition, vehicle identification, vehicle identification, speed measurement, seat belt identification, sun visor identification, and passenger identification, etc to achieve black and white lists of suspected cases etc. Key factors such as accidental escape vehicles, driverless vehicles and drivers are analyzed to provide technical support for public security traffic management and other police work to combat all kinds of illegal and criminal activities.”

“For our traffic safety management system, based on the real-time data of the existing heavy-duty vehicles, we provide services such as real-time traffic observation of the domestic road network, abnormal event reminders, road network traffic forecasting, vehicle distribution display and vehicle detailed information viewing for the Hebei Traffic Police High-speed Corps and Detachment. It is conducive to grasping the overall situation in real time and rationally arranging service resources.”

“We provide road network situation monitoring and key vehicle flow direction analysis for Baotou traffic police, differentiated supervision of large trucks, large passenger cars, hazardous chemicals vehicles and foreign entry and transit vehicles, and realized accurate information on illegal records, prohibition, and congestion.”

“Some examples of smart traffic solutions built by us include:
(1) Beijing Traffic Operation Monitoring and Dispatching Center connected to the monitoring video of the city’s transportation industry, as well as the road network center, track command center, urban bus and taxi dispatch of the Beijing Municipal Traffic Commission. The hub management service system, highway operation monitoring and many other business systems have realized the three functions of ‘daily monitoring, coordination and command’.
(2) Shenzhen Comprehensive Traffic Operation Command Center with the four major platforms of ‘smart transportation, intelligent facilities, smart logistics and intelligent government affairs’. The system has access to all kinds of data and many intelligent transportation application systems of Shenzhen City, and has realized the functions of ‘operation status display, operation situation assessment, emergency event disposal and emergency response’ of Shenzhen sea, land and air. It also provides daily duty seats and service monitoring seats for urban traffic operations to jointly serve the smooth and safe operation of the city.
(3) Chongqing main city road operation monitoring system which integrates vehicle, electronic license plate data and other multi-source traffic operation monitoring data, and combined with data dynamic analysis and processing procedures and traffic operation evaluation index system to realize the comprehensive real-time dynamic reflection of road traffic operations within the main city. Based on the traffic operation monitoring platform, the auxiliary application analysis function module is constructed. It can systematically analyze and evaluate the road traffic conditions in the recent urban and sub-district areas; identify the frequent congestion areas and roads; develop the district traffic improvement plan and road maintenance plan; evaluate the effect of major transportation facilities construction and the impact of major events on traffic conditions; statistically analyze relevant indicators such as traffic index, and prepare traffic operation reports on a regular weekly/monthly basis to serve urban traffic construction management.

Expressway Transport
“Our comprehensive ETC product line is capable of highway non-stop charging applications, high-density ETC toll lane application scenarios, urban parking charging application scenarios and highway ambiguous path identification applications. Our main products are ETC roadside unit RSU and vehicle unit OBU, ambiguous path identification roadside unit and CPC card, phased array antenna and OBU handheld distributor. Our ETC products are self-developed, with 38 patents and 3 software copyrights. Our products have been widely used in more than 20 provinces in Shandong, Zhejiang, Shanxi, Tianjin, Hubei, Hunan, Jilin and other countries.”

“Some examples of smart road network solutions built by us include:
(1) Hangjinyu Expressway, the first smart highway in China which TransInfo undertook the construction in 2011. The intelligent traffic electromechanical engineering project of Hangshao section realized the high integration of video surveillance and daily command and management of the road, improved the level of road operation state perception, and provided an important basis for emergency command and traffic situation judgment. Due to the decentralized, staged, and functional complexity of expressway construction, there are complicated equipment on a highway, which causes each system to ‘fight’ one another, thus forming ‘information islands’. To this end, TransInfo has developed a top-level platform for highway management and control business, the ‘Intelligent Traffic Management and Control Platform’, which creates one-stop road traffic solution for users through equipment integration, data integration, system linkage and business linkage to greatly improved the level of intelligent highways.”
(2)Highway & Waterway Safety and Emergency Disposal Project in Guizhou Province. Taking the reality of the road network in Guizhou as the starting point, by integrating and managing a large amount of data and through the monitoring of the operation of key nodes such as traffic monitoring, key sections and bridges and tunnels, the daily monitoring of the operation status and road network abnormality warning of the province’s road network is realized for Guizhou Provincial Traffic Information and Command Center and City Sub-center. The system also includes road network operation scheduling under severe weather conditions, and fault warning of equipment along the road network to achieve road network management under special conditions.
(3) Intelligent Traffic Electrical and Mechanical Engineering Project of Hangshao Section of Hangjinyu Expressway which comprehensively applied wireless communication technologies, road sensing technology, ultrasonic microwave, portable traffic flow detection system, GIS geographic information system, video surveillance and event analysis etc for road network monitoring and emergency command and dispatching.

Rail Train Transport
“Our smart rail train business provides a full range of rail transit information solutions. The core is the Rail Traffic Network Command and Dispatching System (TCC) & Rail Traffic Passenger Information Center System (PIS). Relying on the data collected by TCC, ACC business platform system and other business systems, the information platform improves the information level of rail transit, provides basic information support for government scientific decision-making, manages the operation of rail transit network, provides technical support and decision support for level escalation and emergency response to emergencies, rail transit asset management, rail transit group integrated information management and multimedia integrated display. The Beijing Metro Line 16 HD Closed-circuit Television Monitoring System built by us is the largest HD video surveillance system in China with more than 5,000 HD network cameras, more than 12PB mass storage, more than 1400 HD hard decoding, high reliability, high performance system architecture and disaster recovery platform and storage center to ensure business continuity and timely operation, linked to the center of the main/standby control center, the TCC line network center, the police station and the bus team of nearly 300 roads.”

Smart Travel
“Our Smart Travel business focuses on smart travel information services and develops markets for traffic big data application services and location-based services based on our rich traffic big data and strong traffic data processing technology to improve the efficiency of public travel and create a beautiful travel experience. Our solution include:
(1) Traffic Big Data Analysis Application Service. We have built a rich and unique transportation big data resource pool, which receives an average of 1 TB of data per day and receives more than 10 billion car positioning data per day. We have formed a road network monitoring platform, traffic mechanism analysis system, major activities and emergency support system, road pressure dynamic monitoring system, and travel service support platform as one integrated traffic management business system. The road network monitoring platform has successfully served the daily operation monitoring of the road network of the Ministry of Transport. Our traffic big data service has been applied to other industries other than transportation, such as planning consultation, commercial location, industry GIS application, automatic driving mode analysis, etc. Our traffic big data analysis helped the Spring Festival security work which was reported by CCTV’s News Network headlines.
(2) Dynamic real-time traffic data typical case (Internet / Mobile Internet). In the Internet field, our dynamic traffic information service has covered more than 200 cities and inter-city highways across the country. Through cooperation with many Internet map vendors such as Baidu, Tencent, Sogou, Meituan, Qihoo 360, we provide hundreds of millions of end users with real-time, accurate and rich comprehensive dynamic traffic information services.
(3) Intelligent bus electronic stop sign, bus shelter construction and operation. The electronic station is equipped with a panoramic camera to monitor the surrounding conditions of the station throughout the day, assisting the city’s public security and traffic management, and displaying the real-time arrival time of the bus to facilitate the travel of the public. The bus shelters are of various styles and can be customized according to the urban style and distributed in the main trunks of the city. The electronic stop signs and bus shelters have covered Shanghai, Anhui, Shandong, Inner Mongolia, Yunnan, Henan and other provinces and cities.
(4) Taxi media service and operation. We are the largest taxi information service operator in China. Through the city taxi information service management platform, the taxi information management level is improved in  the network reservation car travel information service, the network car supervision platform, media management and travel integrated service to effectively tap the potential of taxi operations and promote innovation, transformation and upgrading of the taxi industry. This model has been successfully implemented in more than 10 cities in Chongqing, Qinhuangdao, Urumqi, Hohhot, Zhengzhou, Luoyang and Siping.
(5) Dynamic real-time traffic data in car navigation. In the field of vehicle networking, we have been highly recognized in the field of vehicle front-loading and post-installation and have achieved outstanding results in many rigorous tests of automakers such as Mazda, Dongfeng Yulong, SAIC, Nissan, BYD, Geely, etc. In the Mazda project, information services such as real-time road conditions, traffic events, and road conditions provided by TransInfo are all used in the new models that have been mass-produced since July 2016. Through this service, car owners can enjoy timely and accurate information services such as avoiding congested road sections and on-road traffic reports, and can view surrounding road conditions, key regional road conditions, and city road conditions through simple and intuitive road conditions, so as to make an accurate and efficient driving route judgment.

“Our core business in the smart parking sector covers urban-level traffic top-level design, parking lot investment, planning and design, operation management, automotive after-service application scenario development, etc., leveraging off our strong big data integration capabilities, technical capabilities, and capital investment capabilities. We have signed a parking strategic cooperation agreement with Beijing Jingmei Group. In terms of market development, we will expand and deploy our smart parking solution in more than a thousand construction sites of Jingmei Group. In terms of technology development cooperation, combined our strong traffic management platform R&D capabilities and the 3D garage construction and implementation capacity of Jingmei Group, together, we will alleviate the problem of traffic in the city and help build a green and harmonious home. Some examples of our smart parking projects include:
(1) Beijing Headquarters Base Parking Operation Project. The acquisition of the parking operation right of the Fengtai District Headquarters Base in Beijing. Through the combination of intelligent transformation of parking equipment, information technology and refined management, intelligent and standardized unified management was realized to enhance the user experience.
(2) Tianjin Traffic Information Platform. We establish Tianjin traffic information platform and realize the data access, data service and operation control of 300,000 parking spaces in Tianjin Nankai District, Tianjin Binhai High-tech Zone, and off-street parking lots in the first phase, and transfer the model to other districts in Tianjin to achieve the goal of integrating parking information and services throughout the city.
(3) Airport Smart Parking Service. We provide full life cycle services from investment, construction, operation and maintenance, using license plate capture, license plate recognition and electronic non-stop charging technology to achieve rapid vehicle entry/departure, effectively improve the overall speed and improve the user’s parking experience. We have successfully served Shanghai Hongqiao International Airport, Haikou Meilan International Airport and Sanya Phoenix International Airport.

Civil Aviation
“Our smart civil aviation business is the first enterprise in China to design and develop the core production data analysis and application system of flight resource management in the aviation field, and also the only flight data decoding platform with independent intellectual property rights in China. The platform (FDR/QAR/DAR decoding) realizes the complete decoding of the mainstream models of civil aviation. According to the flight plan and operational basic data (including QAR, ACARS, etc.), the system analyzes the flight time, distance, fuel consumption, altitude use, speed adjustment, etc. of each company and each flight before and after airspace adjustment. Change situation; plot the air traffic heat map, traffic hotspot map and the comparison between the actual flight path of the flight and the standard entry and exit procedures in the GIS system. The system introduces big data technology into government management and assists the Air Traffic Control Bureau to formulate a more reasonable and scientific airspace management plan, effectively alleviating the problem of insufficient airspace resources and improving the level of airspace management. We provide data integration and application service platform for civil aviation users for post-aviation analysis and production master data (person, aircraft) management. We have a wide range of domestic commercial airline users, with a market share of 80-90%. Our customers include commercial aviation, general aviation, air traffic control bureau, airport, civil aviation authority, aircraft manufacturers and other enterprises and institutions to provide aircraft life cycle and production management personnel career management solutions.”

“For our smart civil aviation business, our key information solutions include:
(1) Civil aviation airborne service platform. We provide operational data integration and analysis services for more than 90% of large air carriers in China. We have the only ‘flight data decoding platform’ with independent intellectual property rights in China. Our system has been successfully implemented in Air China, Shandong Airlines, Hainan Airlines, Shenzhen Airlines, Xiamen Airlines, Sichuan Airlines, Kunming Airlines, Chengdu Airlines, Jixiang Airlines, Hong Kong Airlines and other airlines.
(2) Flight operation risk control system. Based on the integration of airline flight operation data, we comprehensively uses expert knowledge base and big data mining technology to comprehensively identify flight operation risk factors and provide airlines with an intelligent expert system for quantitative assessment of flight operation risks. The system can quickly diagnose critical operational risks, provide risk warnings, and guide operators to take control measures to mitigate and control operational risks. Through risk quantitative results analysis, the system identify potential safety hazards, find security vulnerabilities, and assist airlines in making safety decisions. At present, the system has been put into operation on more than 20 airlines such as Air China, Shenzhen Airlines, Spring and Autumn, Lucky, Shunfeng and Changlong, escorting the safe operation of thousands of flights every day. The civil aviation flight operation risk quantification risk tree model embedded in the system helps 20+ airlines complete the construction and implementation of the civil aviation department’s flight control system before October 31, 2017.
(3) Airport security situation management system. The system comprehensively uses expert knowledge base and big data analysis technology, integrates safety data in airport systems based on the experience rules of airport security experts, comprehensively identifies airport security risk factors through real-time calculation, and comprehensively quantifies airport security status trends. The system can quickly diagnose critical risks, conduct risk warnings, and guide all levels of management personnel and front-line employees to take mitigation measures to control airport security risks. It is an integrated safety management and control system for airports; it can help identify potential safety hazards through risk quantitative results analysis, find security vulnerabilities, formulate security management policies, optimize management processes, help improve overall security management level, and become a security decision-making system to ensure airport operations. The airport security situation management system is implemented at the Beijing Capital International Airport.
(4) Terminal Building Collaborative Decision System (TCDM). The system uses advanced technologies such as big data, Internet of Things, artificial intelligence and expert decision-making system to ensure the full business data processing based on flight dynamic information, real-time dynamic change data based on flight production operation process, terminal building and passenger information to establish a visual collaborative decision-making command system for airport terminals. The system realizes the operation situation of the terminal building, the unified perception of passengers’ demands, and clear and smooth information support.
(5) Airport landside traffic comprehensive information management platform. Through monitoring and management of airport dynamics and static traffic operations, the platform realizes interoperability with regional traffic information, helps on-site management units collect and publish information in a timely, complete and accurate manner, and takes effective countermeasures against traffic anomalies. The platform revolves around the flight dynamic information, according to the real-time dynamic change data of the flight production operation process, the terminal building and the passenger information, and opens up the information island between the airport flight zone, the terminal building and the ground traffic, and assists the management department to realize the land-side traffic capacity. The dynamic adjustment provides passengers with accurate first-hand traffic information, helps passengers to choose the best mode of transportation, and effectively improves the efficiency of the airport’s land-side traffic operation, and achieves the goal of airport-side traffic efficient air-ground connection.
(6) Station floor wireless dispatching system. By integrating various dynamic real-time data of activities within the airport, it provides functions such as monitoring, guiding, alarming, and querying statistical analysis in a unified visual GIS map platform. The system provides linkage alarm and big data analysis functions of each related system, which is convenient for the operation and control personnel to monitor and manage the real-time high-precision position and status of the aircraft, apron vehicles, equipment and facilities resources and the operation status of the terminal building, improve the supervision level of airport production and operation, and improve the efficiency of airport production and operation safety management, personnel conduct construction management, emergency dispatch dispatching decision-making and fire safety management.
(7) Airport passenger service system. Taking airport passengers as the service target, the system focuses on passenger demand, relying on online information service and offline venues, taking passenger member management and air-ground integration services as the starting point, Integrating on-line and off-line services, opening up various security links for ground services, providing passengers with a complete and consistent service experience, thus achieving air-ground integration and personalized passenger services, proactive and coordinated production, intelligent security and refined operational management. The end-to-end seamless service experience of passengers improves the operation and service level of the airport.
(8) Airport electricity engineering business. Based on advanced technology architecture and IP network as a means of transmission, we provide a variety of information sharing operating environment and unified business information processing specifications, provide unified flight information, and achieve highly reliable and efficient collaboration between application systems and subsystems. We support airport hub operation, provide timely, accurate, systematic and complete flight information services (including flight transit information) for passengers, airlines and the airport’s own business management, and support the airport production and operation departments in the operation and control center. Under the unified command, the dispatching management of multiple terminals and multiple runways is carried out to optimize the production operation process and improve the operational efficiency of the equipment. Clients successfully served include Beijing Capital Airport Group, Shanghai Airport Group, West Airport Group, etc.
(9) Airport visual aid which includes approach lighting system, visual slope indication system, runway, taxiway, station lighting system, airport lighting and other navigation lighting systems, taxi guidance signs, signs, markers and other guidance systems, navigation lighting monitoring system, These have been successfully applied in Beijing Capital Airport, Hebei Chengde Civil Airport, Handan Airport, Shahe Airport, Enshi Airport.
(10)Civil aviation training service. Based on our professional experience in civil aviation business information technology services, comprehensive and profound understanding of the airline business, we provide  online electronic training and learning solutions, the certification of civil aviation practitioners, and post training requirements for airlines and the curriculum is rigorous, supports SCORM / AICC standards, and has a strong practicality.

Smart Security/Univision
“Uniview is the pioneer as the first to introduce IP video surveillance to China and is now the third largest player in video surveillance in China and the first in our innovation patent portfolio. Uniview has complete IP video surveillance product lines including IP cameras, NVR, Encoder, Decoder, Storage, Client Software and app, covering diverse vertical markets including retail, building, industry, education, commercial, city surveillance etc. Uniview has a manufacturing base with an annual output of 10 million high-end video security equipment in Tongxiang, Zhejiang. Our aim is to become a global leader in video surveillance industry which endeavors to build a safer world by providing professional, reliable and cutting-edge products and services. Uniview started video surveillance in 2005. Instead of choosing an easy way, Uniview started with IP video surveillance and was the first manufacturer in China. Uniview insists on positioning ourselves as a product and solution provider, and is committed to a standardized, IT-based video surveillance infrastructure platform, laying the foundation for the industry chain with a core front-end hardware + operating system platform and Uniview owns the largest large-scale operating system IMOS (IP Multimedia Operation System) in the industry. Uniview’s IMOS integrates the core platform of Our software, storage, intelligence, security and development interfaces, and utilizes AI.”

“By the end of 2018, Uniview had built more than 160 Bright Projects, more than 680 Safe City Projects, more than 350 intelligent transportation projects, 625 Safe Universities (including 90% of double-class universities), more than 120 subway lines in 35 cities, more than 50 airports, more than 400 large enterprises, more than 200 top three hospitals, more than 260 highways, more than 240 landmark commercial complex buildings. In almost all major summits in China (APEC, G20, Shanghe, BRIC), historical moments (NPC Meeting, Two Sessions Meeting), in the concert of Jacky Cheung’s concert, there are guardians of Uniview to protect. In 2018, Uniview appeared in the second season of ‘Great Powers’ 《大国重器Ⅱ》TV show, and was highlighted for its Smart City Brain + Facial Recognition artificial intelligence technology which was applied to recover a lost old men among the sea of 100,000 people in 25 minutes.”
[Watch YouTube video from 31:00 to 37:00: https://www.youtube.com/watch?v=enOHxoyhN6s

“Our intelligent building surveillance solution for hotels, office buildings, hospitals, residential buildings, etc, take the specific social activities and personal behavior into consideration. It needs to protect the privacy of individuals, and meanwhile be able to cover all critical areas without any blind spot. Well-known projects include Peking University First People’s Hospital, Shenzhen Shangri-La Hotel, Beijing Palace Museum, Shanghai Yuexing Global, and Long Security Country 3S Shop Network.”

“Our enterprise clients include Sinopec, the integration and optimization of more than 2,000 monitoring points of CNPC; the interconnection of Shenhua Group and its 7 business segments; networked Chinalco’s 13 member companies; China Shougang with more than 2,000 monitoring systems; serving to Shagang, Baotou Steel, Jiugang, Shuigang and other steel groups; Yili, Mengniu, Haitian, Weichai, Changlong, Yitai, BOE, and other large group companies; Chery, Changan, Brilliance, Jiangling and other auto companies; Heilongjiang Tobacco Monopoly Bureau, Fuling Cigarette Factory Tobacco industry; Guohua Power, TBEA, State Grid Headquarters; Jidong Oilfield, Jidong Shipyard, etc.”

“Our retail surveillance solution improves customer satisfaction and the potential to a safer and more efficient consumption environment. Our campus surveillance applications can be applied to college campus, residential complexes, commercial parks, public venues. To apply video surveillance system in airport is challenging because there is a huge number of passengers, entrances and exits, lounges, corridors, check-in counters and complex scenarios. Our UNV bank surveillance solution can solve the issues of interconnection even though there is no dedicated network in some branches. Our airport surveillance solution provides airport operators with basic database for further applications, such as situation perception, service optimization and intelligent analysis to realize a better airport operation.”

“Some case examples of our solution include:
(1) Bright Project – Beijing Yizhuang, an innovative model of comprehensive management that highlights the regulatory issues of large cities such as illegal construction and management of migrant population.
(2) Xiamen BRICS Ten Leaders Summit where 20,000 road IPCs covers Xiamen to guard it as a safe city with facial recognition technology.
(3) Gobi Passage G7 Jingxin Expressway, the world’s longest desert highway with full monitoring system, charging and service area monitoring system, license plate recognition system, image is still clear and uniform under low illumination environment, solving the problem of ultra-long transmission, anti-counterfeiting, anti-illegal access, anti-listening, security isolation and other features to solve security risks.
(4) Spring Festival Guangzhou Railway Station with comprehensive use of artificial intelligence machine vision, big data platform intelligent analysis in key area population monitoring system. During the Spring Festival, the number of stranded residents is accurately grasped. The AI machine vision crowd monitoring system displays the number of stranded residents in real time and promptly guides passengers.
(5) Beijing’s 400 kindergartens in 11 districts of Beijing where over 20,000 IPCs are deployed to acquire video and audio data simultaneously to meet the needs of kindergarten real-time monitoring to help the public regain confidence in safety.
(6) Guarding the C919 commercial production plant, assembly base
(7) Guarding Chongqing Jiangbei International Airport, one of China’s eight hubs, including a Smart Parking Solution with nearly 2,000 parking space detection cameras, hundreds of parking space guidance screens, and dozens of sets of inquiry machines to meet the functions of license plate recognition, parking induction and reverse car search, to enhance passengers’ parking convenience experience.
(8) Guangzhou Sanzhi Full HD Smart Metro New Line, the world’s largest 4K ultra-HD smart subway line. The hub station has facial recognition pilot; the back-end intelligent analysis server realizes facial recognition and dynamic blacklist control, providing scientific support to the police force for public security and anti-terrorism work.
(9) Cracking the problem of stolen vehicles with Univision’s RFID ID Card installed on motorcycles and electric vehicles. Nearly 90,000 vehicles in Ganzhou have been installed, deploying more than a thousand IoT data acquisition base stations, and back-end platforms for vehicle trajectory big data analysis. The system has ‘real-time trajectory tracking + loss compensation’ mode, with positioning query, displacement alarm, track query, blacklist control and other functions, forming a tracking and prevention network covering the whole city, providing accurate detection of clues for public security.

“Uniview stepped into the overseas market in 2014. By the end of 2018, Uniview achieved more than 240 customer demand developments, 409 custom delivery and custom development tool software have been completed, achieving nearly 24 global zero-hour emergency response services covering 145 countries and regions. Some examples include:
(1) Canada DHL where Uniview guards the DHL transhipment hub in Ontario and Alberta with stable operation zero fault with anti-minus 55 °C extreme cold weather-resistant capabilities, ultra-low illumination, ultra-wide dynamic, multi-scene day and night full-time clear imaging;
(2) Slovakia’s Andorto car seat manufacturer, the world’s leading auto seat production plant, covering 8 factories, serving more than 4,000 employee, fully adapted to harsh environments;
(3) Korea Kagawa University Affiliated Hospital, one of the most well-known medical institutions in Korea, equipped with EMC Class B ultra low radiation, medical grade electromagnetic protection grade;
(4) East Africa Monnet Railway, the first railway built in the past 100 years to accelerate the modernization process in Africa equipped with high protection level IPC, surge protection, explosion-proof and other functions, fully adapt to the harsh power supply environment in Africa;
(5) Australia Gold Coast, guarding the famous shops on the coastline of Surfers Paradise with intelligent detection and analysis, intrusion detection, night safety, and flow statistics to help optimize management plan with ultra 265 deep compression technology, ultra-low bandwidth consumption, smooth mobile monitoring management

“And others such as Oman Buraimi University; IKEA Kuwait where 320 IP cameras are installed in IKEA, covering the whole shopping areas, elevators, aisles, control room, parking lot, entrances and so on; Carrefour Hypermarket, Dubai, UAE where More than 200 UNV IP cameras are installed in and around the mall, covering the whole shopping areas, including the stairs, the elevators and the cashiers etc; the Sports Arena in Lazio, Italy; the Hilton Hotels and Resorts, UAE where more than 300 IP cameras are installed; Kiev International Airport, Ukraine, etc.”

On the impact of the Sino-US trade war on TransInfo and Univision, Chairman Xia said: “The overseas business accounts for 10% of TransInfo’s overall scale, or around 20% of Univision’s sales are from overseas markets. The overseas business focuses on the Middle East, Europe, Russia, Southeast Asia, Korea, etc. The US business accounts for only about 10% of the overseas business. The Sino-US trade dispute has not affected the overseas market of Univision business.”


Intrigued and want to read more? Download this week’s H.E.R.O. HeartWare: Weekly Asia Tech News with brief highlights of the inspiring entrepreneurial stories of tech leaders in Asia whom we have been monitoring over the past decade in our broader watchlist of over 200 listed Asian tech companies and our focused portfolio of 40 HERO Innovators who reveal their problems and successes behind building the company. Inspired by Brandon Stanton’s photo-journalistic project Humans of New York which collects and highlights the street portraits and moving stories of people on the streets around us who were doing things that changed lives and made a difference in the city but often went unnoticed, we have curated a collection of Hear the Heart of the H.E.R.O. stories on our website which we aim to update with refreshing and uplifting new stories weekly. Please check them out and give us your valuable feedback so that we can improve to make them better for you.


It started with rethinking a few questions. Question No. 1: Can the megacap tech elephants still dance? Or is this the better question: Is there an alternative and better way to capture long-term investment returns created by disruptive forces and innovation without chasing the highly popular megacap tech stocks, or falling for the “Next-Big-Thing” trap in overpaying for “growth”, or investing in the fads, me-too imitators, or even in seemingly cutting-edge technologies without the ability to monetize and generate recurring revenue with a sustainable and scalable business model? How can we distinguish between the true innovators and the swarming imitators?

Question No. 2: What if the “non-disruptive” group of reasonably decent quality companies with seemingly “cheap” valuations, a fertile hunting ground of value investors, all need to have their longer-term profitability and balance sheet asset value to be “reset” by deducting a substantial amount of deferred innovation-related expenses and investments every year, given that they are persistently behind the innovation cycle against the disruptors, just to stay “relevant” to survive and compete? Let’s say this invisible expense and deferred liability in the balance sheet that need to be charged amount to 20 to 30% of the revenue (or likely more), its inexactitude is hidden; its wildness lurks and lies in wait. Would you still think that they are still “cheap” in valuation?

Consider the déjà vu case of Kmart vs Walmart in 2000s and now Walmart vs Amazon. It is easy to forget that Kmart spent US$2 billion in 2000/01 in IT and uses the same supplier as Walmart – IBM. The tangible assets and investments are there in the balance sheet and valuations are “cheap”. Yet Kmart failed to replicate to compound value the way it did for Walmart. Now Walmart is investing billions to “catch up” and stay relevant. Key word is “relevancy” to garner valuation.

We now live in an exponential world, and as the Baupost chief and super value investor Seth Klarman warns, disruption is accelerating “exponentially” and value investing has evolved. The paradigm shift to avoid the cheap-gets-cheaper “value traps”, to keep staying curious & humble, and to keep learning & adapting, has never been more critical for value investors. We believe there is a structural break in data in the market’s multi-year appraisal (as opposed to “mean reversion” in valuation over a time period of 2-5 years) on the type of business models, the “exponential innovators”, that can survive, compete and thrive in this challenging exponential world we now live in. Tech-focused innovators with non-linear exponential growth potential are the most relevant multi-year investment trend and opportunity.  

During our value investing journey in the Asian capital jungles over the decade plus, we have observed that many entrepreneurs were successful at the beginning in growing their companies to a certain size, then growth seems to suddenly stall or even reverse, and they become misguided or even corrupted along the way in what they want out of their business and life, which led to a deteriorating tailspin, defeating the buy-and-hold strategy and giving currency to the practice of trading-in-and-out of stocks. On the other hand, there exists an exclusive, under-the-radar, group of innovators who are exceptional market leaders in their respective fields with unique scalable business models run by high-integrity, honorable and far-sighted entrepreneurs with a higher purpose in solving high-value problems for their customers and society whom we call H.E.R.O. – “Honorable. Exponential. Resilient. Organization.”, the inspiration behind the H.E.R.O Innovators Fund, (surprisingly) the only Asian SMID-cap tech-focused fund in the industry.

The H.E.R.O. are governed by a greater purpose in their pursuit to contribute to the welfare of people and guided by an inner compass in choosing and focusing on what they are willing to struggle for and what pains they are willing to endure, in continuing to do their quiet inner innovation work, persevering day in and day out. There’s a tendency for us to think that to be a disruptive innovator or to do anything grand, you have to have a special gift, be someone called for. We think ultimately what really matters is the resolve — to want to do it, bring the future forward by throwing yourself into it, to give your life to that which you consider important. We aim to penetrate into the deeper order that whispers beneath the surface of tech innovations and to stand on the firmer ground of experience hard won through hearing and distilling the essence of the stories of our H.E.R.O. in overcoming their struggles and in understanding the origin of their quiet life of purpose, who opened their hearts to us that resilience and innovation is an art that can be learned, which can embolden all of us with more emotional courage and wisdom to go about our own value investing journey and daily life.

As the only Asian SMID-cap tech-focused listed equities fund in the industry, we believe we are uniquely positioned as a distinctive and alternative investment strategy for both institutional and individual investors who seek to capture long-term investment returns created by disruptive forces and innovation without herding or crowding to invest in the highly popular megacap tech stocks, and also provide capital allocation benefit to investors in building optionality in their overall investment portfolio.

The H.E.R.O. HeartWare Weekly highlights interesting tech news and listed Asian emerging tech innovators with unique and scalable wide-moat business models to keep yourself well-informed about disruptive forces and innovation, new technologies and new business models coming up, and the companies that ride on and benefit from them in some of the most promising areas of the economy in Asia as part of our thought leadership for our ARCHEA Asia HERO Innovators Fund to add value to our clients and the community. Hope you find the weekly report to be useful and insightful. Please give us your candid feedback and harshest criticisms so that we can improve further to serve you better. Besides the BATTSS (Baidu, Alibaba, Tencent, TSMC, Softbank, Samsung), do also tell us which Asian tech entrepreneurs & CEOs whom you admire and respect and why – we will endeavor to do up profiles of them for sharing with the community. Thank you very much and have a beautiful week ahead.

Warm regards,
KB | kb@heroinnovator.com | WhatsApp +65 9695 1860
www.heroinnovator.com

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About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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