Q: 1. How will the Company improve its gross profit margin?
A: The Company has moved focus from scale-expansion to quality and efficiency, promote self-innovation, speed up structural adjustment, strengthen internal control, proactive implementation of talent strategy, procure all-rounded coordination in achieving sustainable development so as to create higher value for shareholders.
First of all, the Company accelerates industrial restructuring. Secondly, the Company fully implements indicator assessment in strategic management and key operational performance references, improves financial budget management, strengthens analysis of economic activities and focuses more effort on central control management. Thirdly, the Company continues to build its internal control system in order to further enhance its capability in risk alertness and risk prevention. Fourthly, the Company makes greater efforts in self-innovation to reinforce its capabilities in technology.
Q: 2. What’s the company’s Capex plan in the coming year?
A: It is estimated that the Capex in 2011 will be RMB15.9 billion.
Q: 3. China Railway Group has planned to further developed mineral resources business, how has been the progress now?
Q: 4. What is the Company’s outlook in property development business?
A: Although the property market in China has seen various control policies, unprecedentedly severe differential credit policies, restrictions on purchases of houses and gradual expansion of property tax pilots, the Company’s property business has developed steadily.
The Company will strengthen the resources integration, optimize the regional planning, innovate the operating model, streamline the decision-making procedures and build a scientific investment and financing system, so as to further establish the brand of “China Railway Real Estate”, improve the internal control and risk management, and promote the professionalism, scale and branding of the Company’s property business.
Q: 5. What is the progress of BOT business?
A: The overall operation of BOT projects ran well with revenue increased steadily in the first half of 2011. The Company is confident in achieving an effective operation and management of BOT projects.
Q: 6. Does the Company face high pressure of the rising labor and raw materials costs? What cost control measures does the Company adopt?
A: The rising labor and raw materials costs are a challenge for all enterprises in China. However, as a leading company with strong competitiveness, we believe that we can pass along the cost hike. The Company will also strive for better operational efficiencies and optimized business structure to minimize the impact of increase in operation cost and bring better returns for shareholders.
Q: 7. What is the Company’s plan in developing overseas market?
A: We will prudently expand to overseas markets and conduct precise risk assessments before starting every project.
Q: 8. How will the Company benefit from China’s promoting high-speed train system construction?
A: With the government’s huge investment on high-speed train system, the railway-related industry has been stepping into an era of fast growth. As one of the major players in the industry, the Company’s infrastructure business, project consulting business and equipment manufacturing business are prepared to grasp this promising business opportunity.