CRRC CORPORATION LIMITED
2024 ACTION PLAN FOR “ENHANCING QUALITY INCREASINGEFFICIENCY AND EMPHASIZING RETURNS”
CRRC Corporation Limited (hereinafter referred to as “CRRC” or the “Company”) hasactively responded to the Shanghai Stock Exchange’s initiative on the “Enhancing QualityIncreasing Efficiency and Emphasizing Returns” campaign among Shanghai-listed companiesby formulating 2024 Action Plan for “Enhancing Quality Increasing Efficiency andEmphasizing Returns” (hereafter referred to as the “Action Plan”) so as to earnestly fulfil itsresponsibilities of “Improving the Quality of the Company while Enhancing the Returns andthe Sense of Gain for the Investors”. The details are as follows:
I. CREATING AN INDUSTRIAL PATTERN OF “TWO TRACKS AND TWO CLUSTERS”
INDUSTRIAL PATTERN TO ENHANCE THE OPERATIONAL QUALITY
As the world’s leading and diverse rolling stock supplier with advanced technology the
Company has consecutively ranked first in the world in terms of sales volume of rolling
stock equipment for years. The Company has actively implemented the strategy of
building a transportation power and fully accurately and comprehensively implemented
the new development concept based on the new development stages. We served and
integrated into the construction of a new development layout actively adapted to the new
environment and changes seized market opportunities to accelerate the structural reform
transformation and upgrading. We made great efforts to achieve new breakthroughs in
business layout market expansion scientific and technological innovation reform and
innovation management improvement integration of industry and finance and the Party
building “golden card”. The position in the rail transit equipment industry has been
further consolidated.In 2024 the Company has focused on its principal responsibilities and major businesses
striving to create an industrial pattern of “Two Tracks and Two Clusters” for the rail
transit equipment business and clean energy equipment business. This will establish a
system of graded layout positive interaction and cluster development expediting the
enhancement of system solution capabilities and solidifying the industrial foundation for
high-quality development.The Company will accelerate market expansion to lay a solid foundation for excellence.The Company will continue to meticulously cultivate the railway equipment market
deepen the application of the “head-to-head” marketing model strengthen
communication and coordination with key customers and actively promote the
implementation of order procurement. Focusing on the trends of digitalization
intelligence and green development the Company will expedite the establishment of a
modern logistics equipment system for railways speed up the transformation of legacy
internal combustion locomotives to new energy and vigorously advance key projects
such as CR450. The Company will enhance and strengthen the maintenance business
1fully leveraging professional scale and resource advantages to rapidly expand the
maintenance market scale. The Company will consolidate and expand the urban rail
transit market organizing research and application of products and technologies such as
urban rail maintenance and refurbishment medium- and low-capacity rail transit systems
and standard subway train 2.0. The Company will make every effort to tap into emerging
strategic industries promote the deployment of bases in an orderly manner and acquire
wind and solar resources. The Company will deepen cooperation with key regional
governments and major power generators. The Company will strengthen the strategic
presence in the international market consistently promoting the international
development of the “Two Tracks and Two Clusters” serving the national strategy
enhancing top-level design and coordinating resource allocation in an integrated manner
to achieve comprehensive and systemic “going out” across the whole industry chain with
high standards high added value and high quality. The Company will accelerate the
promotion of “Product+” and “System+” business models bolster the “growth pole” of
the DLS business and create demonstration projects.The Company will optimize business layout to enhance its support for excellence and
increase investment in emerging strategic industries. Adhering to a strategy-driven and
function-oriented approach the Company will strategically position itself in new areas
and new tracks ahead of time focusing on technological innovation in clean energy
equipment and manufacturing capabilities to carry out effective investments thereby
promoting layout optimization and structural adjustments through investment. The
Company will reinforce the deep integration of technological innovation and industrial
innovation using the industrial chain to roll out the innovation chain and foster the
industrial chain with the innovation chain to build new industries new business forms
and new models expanding new space for development and cultivating new drivers for
growth. The Company will actively liaise with central SOEs responsible for key sectors
working jointly with research institutes and universities to conduct technology foresight
and development trend assessments and scientifically coordinating various elements and
forces to form a development synergy. The Company will continuously optimize
resource integration and allocation continuously strengthen strategic investment and
reform research and strive to enhance its comprehensive judgment and strategic
planning capabilities. The Company will more proactively plan medium- and long-term
development strategies in advance driving higher quality construction of the industrial
pattern of “Two Tracks and Two Clusters” optimizing business layout and adjusting
structures to accelerate the development of a world-class CRRC.II. ENHANCING TECHNOLOGICAL INNOVATION AND ACCELERATING THE
DEVELOPMENT OF NEW QUALITY PRODUCTIVE FORCES
CRRC has insisted on self-reliance in science and technology vigorously implemented
the innovation-driven development strategy deepened the reform of the science and
innovation system accelerated the construction of sources of original technologies
continued to advance proprietary innovation capabilities to achieve a major leap from
falling behind and catching up to taking the lead. In 2023 the Company continued to
2promote the national “Advanced Rail Transit Key Projects” the “Key TechnologyProjects under CRRC’s 14th Five-Year Plan” “Wind Power Projects” and other science
and technology projects. The Company launched CRRC’s 2023 project for cultivation of
original technology for a term of 10 years with 29 projects established. The Company
has promoted the implementation and acceptance of 8 collaborative innovation teams in
the frontier areas of magnetic levitation new materials new energy light weighting and
health management. In 2023 the Company also launched new products for rail
transportation such as locomotives freight wagons and urban rail vehicles new products
for new industry such as complete machines run on clean energy as well as 480 research
and development projects for key systems and components of which 61 projects were
newly established wind power projects all being part of the Company’s relentless efforts
to achieve breakthroughs in crucial key technologies and launch the work of
transformation and application of the achievements. Various projects were progressing
smoothly which strongly supports the sustainable and healthy development of the
Company.In 2024 the Company has continued to prioritize technological innovation among all the
other tasks adhered to the innovation-driven development strategy focused on
developing new quality productive forces and empowered high-quality development
through high-level technological self-reliance and self-strengthening. Focusing on the
development of new quality productive forces the Company will reinforce the deep
integration of technological innovation and industrial innovation to build new industries
new business forms and new models expanding new space for development and
cultivating new drivers for growth. The Company will focus on improving the innovation
system maintain a high level of technological investment coordinating innovation
resources and concentrating efforts on technical research and project breakthroughs. The
Company will optimize the ecosystem for technological innovation adhere to market
orientation leverage “thirst-quenching” policies and continuously improve the
efficiency of technological outputs. We will strive to enhance our innovative capacity
focus on the construction of source of original technologies and increase the investment
in original technology and research on the disruptive frontier common and basic
technologies. The Company will strengthen collaboration with upstream and downstream
of the industrial chain enhance the coordination of scientific research projects and
deepen the modern industrial chain synergy actions for CRRC’s rail transit equipment
and clean energy equipment. We will focus on translating innovation results into practice
accelerate the application of technological innovation achievements and follow theproduct research and development path of “exploring for a generation pre-researchingfor a generation researching and manufacturing for a generation and equipping for ageneration” grasping the trend of digitalization green development intelligence
modularization and platformization accelerating the application of the results of key
projects and creating typical products.
3III. STRENGTHENING INVESTOR COMMUNICATION TO ENHANCE MARKET
RECOGNITIONThe Company strictly adheres to the principles of “Truthfulness Accuracy CompletenessTimeliness and Fairness” in the disclosure of information to ensure that all shareholders
have fair and equal access to information and to safeguard the interests of all
shareholders in particular the interests of small and medium-sized shareholders. The
Company sticks to proactive investor relations management and actively manage
multi-dimensional interactions with investors analysts media regulatory authorities and
the public. With innovative models the Company has diversified the promotion channels
and deepened the roadshows and reverse roadshows to enhance mutual understanding
and trust and convey the Company’s value. The Company’s information disclosure and
investor relations management have been widely recognized by the capital market
regulatory authorities and professional organizations: the Company has been awarded
Grade A in the evaluation of information disclosure of listed companies on the Shanghai
Stock Exchange for eight consecutive years and its information disclosure case study
has been selected as one of the best practice cases of corporate governance in 2023 bythe China Association for Public Companies. The Company won “Top 100 ListedCompanies on Main Board” Award at the 17th China Listed Company Value Evaluation
the “Tianma Award” at the 14th Investor Relations of Listed Companies in China
“Excellent Practice Case” Award of Annual Results Brief Session from the China
Association for Public Companies and the Gold Award in 2022 Vision Awards Annual
Report Competition held by League of American Communications Professionals LLC
etc.In 2024 the Company will proactively strengthen multi-dimensional multi-level and
multi-form investor communication and value management to enable the capital market
to fully recognize the Company’s intrinsic value. First the Company will strengthen the
value promotion to continuously enhance recognition in the capital market. The
Company will hold regular performance briefings actively organize exclusive
presentations for investors and analysts on the annual results hold regular investor
teleconferences by arranging for the participation in person of the Company’s directors
supervisors and senior management so as to truly and accurately interpret the Company's
operating results share business achievements and overall strategy exchange key
information on development opportunities and business planning and respond truthfully
to investors’ questions and concerns. The Company will conduct high-quality
performance roadshows visit domestic and international investment institutions and
engage in one-on-one communication with key investors. The Company will organize
reverse roadshows in an innovative way to further convey the Company’s value and
strengthen recognition in the capital market. Second the Company will refine daily
management to solidify the foundation of investor relations. The Company will organize
the compilation and publication of daily media monitoring information weekly capital
market reports and public relations event analyses to provide timely and accurate
information support to our directors supervisors and senior management. The Company
will continue to update investor profiles establish the capital market analyst database
4and convey the Company’s operation and management philosophy and strategic plans
through visiting long-term shareholders and participating in brokers’ strategy conferences
so as to enhance investors’ trust and understanding on the Company. The Company will
prioritize daily communication with investors arrange for dedicated personnel
responsible for answering investors’ phone calls receiving investors’ e-mails paying
attention to investors’ questions on the E-interaction platform and responding patiently
to questions raised by investors. The Company will participate in investment education
activities to remind investors to make rational investments. The Company’s investor
relations management efforts are devoted to innovating models to diversify promotion
channels and enriching communication methods with investors and analysts enabling
investors to understand the Company’s development approach and operational status
thereby enhancing their confidence in and recognition of the Company and fostering
positive interactions between the Company and investors.IV. EMPHASIZING INVESTOR RETURNS AND SHARING OPERATIONAL ACHIEVEMENTS
Since its establishment CRRC has implemented annual cash dividends distributing a
cumulative total of over RMB 30 billion (tax inclusive) in cash dividends from 2015 to
date. The average annual cash dividend distribution ratio exceeded 40% higher than the
average level of the A-share capital market. Since 2019 the Company has increased the
cash dividend to all shareholders per 10 shares from RMB 1.5 (tax inclusive) to RMB 2
(tax inclusive) with the annual total cash dividend amount rising from RMB 4.305
billion (tax inclusive) to RMB 5.74 billion (tax inclusive) the proportion of which to the
net profit attributable to ordinary shareholders of the listed company in the consolidated
financial statements increased from 36% to 49%. On 18 June 2024 the Company’s 2023annual general meeting reviewed and approved the “Resolution in relation to the 2023Profit Distribution Plan of CRRC Corporation Limited” with a proposed cash dividend
of RMB 2 (tax inclusive) per 10 shares to all shareholders totalling RMB 5.74 billion
(tax inclusive) with the remaining undistributed profits carried forward to the next year
for distribution. The Company will adhere to the Articles of Association and relevantprovisions of the “CRRC Corporation Limited Medium and Long-Term Shareholders’Return Plan” emphasizing investor returns and sharing operational achievements with
shareholders.The Company will consistently uphold the philosophy of better protecting shareholder
rights and creating greater value for shareholders. Emphasis is placed on market
capitalization management and the value of market capitalization has been recognized.Since its establishment CRRC has gradually improved the quarterly meeting system and
evaluation system for market capitalization management listens to third-party opinions
and promptly improves and plans subsequent investor relations efforts. During the period
from 30 October 2023 to 29 April 2024 CRRC GROUP Co. Ltd. the controlling
shareholder cumulatively increased its shareholding in the Company’s A shares by
29188800 shares through the trading system of the Shanghai Stock Exchange by way of
centralized bidding representing approximately 0.1% of the total number of issued
shares of the Company thereby demonstrating to the capital market its recognition of the
5value of the Company and its confidence in its sustainable and stable development in the
future. In 2024 the Company will continue to proactively engage in regular market
capitalization management coordinate investor relations management for its listed
subsidiaries strengthen internal management coordination and investor relations
communication with its listed subsidiaries mobilize internal resources form synergy
innovate work methods and enhance management capabilities to further improve the
quality and effectiveness of market capitalization management.V. OPTIMIZING CORPORATE GOVERNANCE AND ADHERING TO STANDARDIZED
OPERATIONS
Focusing on the development of a modern enterprise system with Chinese characteristics
the Company has improved its corporate governance system forming a basic system that
includes the Articles of Association Rules of Procedure for Board of Directors
Information Disclosure Management Measures and Investor Relations Management
Measures supplemented by specialized systems such as the Terms of Reference of
Special Committees of the Board of Directors Information Disclosure Implementation
Rules and Market Capitalization Management Measures thereby establishing a
corporate governance mechanism that is legally defined transparent coordinated and
effectively balanced. The Company precisely manages the operations of the three
corporate governance bodies adhering to the positioning of the general meeting of
shareholders the board of directors and the board of supervisors as the power
decision-making and supervisory bodies respectively. The Company refines the
governance bodies’ authority and responsibility details the list of authority and
responsibility promotes the reciprocity of authority and responsibility and ensures
effective performance of duties; The Company accurately controls the quality of
proposals establishes a proposal quality control procedure and for important proposals
the Company establishes a joint mechanism with relevant departments at headquarters to
intervene in advance and provide advice and recommendations on decision-making
procedures and information disclosure compliance. The board of directors of the
Company has repeatedly been honored with awards such as the Excellent Board of
Directors and Special Contribution Award for Board Development in the capital market.In 2024 the Company will continue to adhere to its compliance-oriented and efficient
and standardized operations and will continue to improve its corporate governance
standards and effectively protect the interests of investors. The Company will firmly
refrain from touching the regulatory red line and comply with the relevant requirements
of the Central Committee of the Communist Party of China the State Council the
State-owned Assets Supervision and Administration Commission of the State Council
(hereinafter referred to as the “SASAC”) and the listing rules in the place of listing
focusing on matters such as related party transactions major investment and financing
projects external guarantees and other matters. The Company will strictly adhere to the
bottom line of compliance follow rules and exercise the functions and roles of each
governance body especially the board of directors in accordance with the rules powers
and responsibilities. The Company will further improve its mechanism and system
6continuously refine its corporate governance system especially in aspects such as board
building information disclosure and market capitalization management and strengthen
the institutional support to ensure that compliance is integrated into the process and
mechanism and that the system is adequately safeguarded and functioning. The
Company will continue to optimize the relationship among the governance bodies and
persistently improve the corporate governance mechanism that is legally defined
transparent coordinated and effectively balanced. The Company will comprehensively
refine the management of the meeting process focusing on the communication with
external directors and optimizing the efficiency of the operation of the board of
directors.VI. STRENGTHENING THE RESPONSIBILITY OF THE “KEY MINORITIES”
The Company maintains close communication with its actual controller the controlling
shareholders shareholders holding more than 5% directors and supervisors of the
Company and others in order to convey regulatory requirements in a timely manner. The
Company organizes the participation of its directors supervisors and senior management
in trainings hosted by the SASAC securities regulatory authorities and listed company
associations to study and understand important policy documents and meeting spirits of
the Central Committee of the Communist Party of China and the State Council grasp
new regulatory requirements and corporate governance demands and continuously
improve policy comprehension strategic insight risk identification and scientific
decision-making abilities.In 2024 the Company will continue to enhance the sense of the responsibility among the
“Key Minorities” and work together to promote their diligence. The Company will
organize its directors supervisors and senior management to participate in work
meetings training courses and other activities organized by regulatory authorities and
professional associations in strict accordance with regulatory requirements and actual
needs enhancing the “Key Minorities’” understanding of capital market laws and
regulations and professional business knowledge and continuously improving
self-discipline awareness to promote high-quality development of the listed company.The Company will continue to evaluate the specific measures of the Action Plan and fulfil its
information disclosure obligations in a timely manner. Investors should be aware that the
forward-looking statements included in the Action Plan in relation to future plans and
development strategies among others do not constitute any substantive commitment to
investors by the Company and investors shall pay attention to the investment risks.
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