Mar. 30 (NBD) -- CRRC Corporation Limited ("CRRC"), which was formed through the merger of CNR and CSR in June 2015, on Thursday reported its financial results for 2017. 

The world-leading rolling stock manufacturer obtained revenue of 211.0 billion yuan (33.6 billion U.S. dollars) last year, a drop of 8.14 percent from the previous year. Net profits attributable to shareholders of the company fell 4.35 percent year over year to 10.8 billion yuan (1.7 billion U.S. dollars). 

This marks the second year in a row that the company has registered a decrease in both metrics.  

However, the management team remained optimistic about this year's performance, saying the company aims to ensure steady development and growth in both operating revenue and net profits attributable to the parent company. 

CRRC's strong confidence partly rests with its rising number of new orders received.  

The company secured new orders worth 314.1 billion yuan (50.0 billion U.S. dollars) in 2017, up 19.61 percent from the previous year. At the end of last year, orders in hand was valued at 243.4 billion yuan (38.7 billion U.S. dollars), representing a year-over-year rise of 29.4 percent. 

Meanwhile, according to China's development plan, the operating mileage of urban rail transportation is predicted to nearly double by 2020 from the level of 2015, and this will become a new growth driver of the nation's economy, the equipment manufacturer said. 

Soochow Securities said in its research report that the locomotive and the aftermarket sectors have a bright prospect. On average, around 300 to 400 new locomotive trains will be needed annually over the next three years. This will translate into a 26.3 percent rise in the aftermarket sector this year. 

However, CRRC acknowledged in its financial report that the rail transportation market is seeing an increasingly cut-throat competition, due to continuous reshuffles, increased industrial concentration, deepened institutional reform, the introduction of the PPP (public-private-partnership) model, and diversified investor structure. 

Sun Zhang, professor with the Institute of Rail Transit at Tongji University, told NBD that the rail freight market didn't see much progress in technological innovation, but is expected to embrace an industrial upgrade in the future. 

Tianfeng Securities' analysts delivered similar message in the research report released in early March, saying that the niche segment has great potentials in capacity expansion and trains will be widely employed to deliver products with high added value. 

In this case, the company is ramping up its efforts in business integration. 

CRRC said Thursday its board of directors has approved the establishment of two truck groups with CRRC Yangtze Co., Ltd. and Qiqihar Rolling Stock Co., Ltd. as the main body, respectively, taking a substantial step towards the restructuring of its truck business. 

In addition, the reorganization of CRRC Dalian Co., Ltd. and CRRC Lanzhou Co., Ltd. has been completed, while the restructuring of CRRC Zhuzhou Locomotive Co., Ltd. and CRRC Luoyang Co., Ltd. is being further advanced. 

With the continuation of business restructuring, CRRC is conducting reforms to address issues related to decision-making, control, and efficiency.  

Email: lansuying@nbd.com.cn