Wenzhou train accident refracts monopoly and profiteering of railway signal market

The accidental Wenzhou train rear-end collision accident not only caused the listed company's brilliant technology railway signal microcomputer monitoring system to be questioned, but also reflected the current monopoly and huge profits in the entire railway signal system field.

On the afternoon of July 24, Li Xinjian, secretary of the board of splendid science and technology, said in an interview that the company had sent people to Wenzhou, and related personnel of the Ministry of Railways had already arrived at the headquarters of the company in Zhengzhou. An emergency investigation was conducted on the accident.

However, Li Xinjian refused to admit that the brilliant technology has a direct bearing on this car rear-end accident. “We did provide a railway signal microcomputer monitoring system to Wenzhou South Railway Station, but the signal system equipment used on the D3115 and D301 trains is not provided by us.”

The secretive brilliant technology in the brilliant technology annual report was established in 2001 and was listed on the Shenzhen A-share market in September 2009. Brilliant Technology is a monopoly company of high-speed rail detection system and disaster prevention system. Its railway signal microcomputer monitoring system, disaster prevention system and wireless shunting system all occupy a very high share in the high-speed rail.

According to the Brilliant Technology 2010 annual report, the railway signal microcomputer detection system provided by it has a market share of over 40% in the entire industry. Ping An Securities analyst Ma Xianwen even expects that the system is expected to increase its share to around 60% in 2011.

The prospectus of the brilliant technology shows that its railway signal microcomputer monitoring system is widely installed in more than 4,000 railway stations in China to monitor train operation conditions and train operation environment (including external natural environments, railway electrification, and automation equipment operations. ), And to provide train operators with comprehensive and accurate real-time monitoring of the system.

Unfortunately, at the time of the accident, D3115 was only less than 10 minutes away from Wenzhou South Railway Station. However, the installed railway signal microcomputer monitoring system still failed to stop the tragedy from happening. It did not inform the D3115 train about the accidental stagnation in time. Followed by the D301 train.

The industry of railway signal and communication products in which brilliant technology is located has begun to usher in a greater space of development after April 1997. At that time, as the speed of trains continued to increase, the demand and dependence of modern railway systems on modern information equipment continued to increase.

According to industry sources, there are not many manufacturers that can provide traffic safety monitoring systems in China at present. Apart from brilliant technology, other manufacturers mainly include the Institute of Railway Signal Science, Kasco Signal Co., Ltd. and Beijing Century Real Technology. In the case of a company limited by shares, the above four companies accounted for nearly 50% of the market share of the entire industry.

It is difficult for new entrant analysts to believe that the causes of the above monopolistic situation may be related to the strict access system implemented by the Ministry of Railways. The consequences of this system directly result in the difficulty of new entrants in the entire railway signal and communication industry.

“The railway sector has stringent requirements for industry products. This requirement is not only reflected in the scale, operating strength, etc. of the production companies... but also in the strict administrative licensing system for industrial enterprises and industrial products entering the national railway market. And through a number of industry management policies to regulate the supply of industry products."

Glory Technology stated in the prospectus that products involving railway transportation safety need to go through tedious procedures before they can apply for the issuance of manufacturing company identification certificates for related products. Therefore, the time cost of new entrants in the industry is higher.

Relatively mild competition has led many companies including brilliant technology to maintain a relatively high industry gross margin. According to the 2010 annual report provided by Brilliant Technology, its overall gross margin in the industry in 2010 was as high as 51%, and the gross profit of some products was as high as 63% or more.

Although Century Rare, which belongs to the railway signal and communication industry with brilliant technology, has competition with glorious science and technology in the fields of railway comprehensive video surveillance and railway disaster prevention and safety monitoring, the 2010 annual reports of the two companies show that nearly three Over the years, the gross profit margins of the two companies have been relatively close and both have maintained a steady growth.