In an exclusive interview with a reporter from China Securities Journal recently, Zhang Anqiang, Chairman of Duolun Technology said that the company has been in lockstep with the digitalization of driver training and testing industries. After years of technology buildup and business development, we now have three mature product systems: smart driver testing, smart driver training and smart traffic solution. Focused on the three major transportation elements of "people, vehicles, and roads", the company applies many core technologies accumulated over the years to the autopilot driving industry, seeking seamlessly docking with unmanned driving technology.

Solving Industry Pain Spots

China Securities Journal: As a forerunner and leader of electronic applications in the driver training and testing industry, how will the company continue to maintain its current advantages?

Mr. Zhang: We have always invested a great deal in R&D, actively recruited talents, explored cutting-edge technologies, and promoted product upgrades to maintain our technological leadership. In the past five years, our accumulative R&D investment has exceeded CNY 200 million, accounting for over 6% of our annual revenue on average. We have participated in the formulation of one national standard and ten industry standards, and built a complete ecosystem for the driver training and testing industry. We have adopted big data analysis, driver-specific teaching and training, driving behavior analysis, safe driving research, promoting electronic and intelligent applications in the industry. We also focus on AI-related research and development, including machine vision-based driver attention recognition technology, traffic target recognition technology, lidar-based target detection technology, and multi-sensor fusion perception algorithms.

China Securities Journal: The driver training and testing industries show many pain points. How does the company apply Internet technology to effectively tackle these pain spots?

Mr. Zhang: We rely on the "three driver training applications", namely, smart driving simulator, smart robot coach, and driver training timing and metering system, to transform traditional driver training to AI-aided training, providing trainees with customized services with less vehicle exhaust emissions. We created an innovative "smart driver training + Internet" service model. Nanjing Municipal Government listed our "three driver training applications” as recommended catalog for innovative product promotion in 2019. The Duolun Cloud Driver Training Platform provides one-stop cloud solutions for supervision authorities, driver training institutions, driving instructors and trainees. In 2018, the number of driver training institutions, driving instructors and trainees registered on the Duolun Cloud Driver Training Platform increased exponentially, with 16 million annual active visitors. And revenue from smart driver training systems increased nearly four times compared to the previous year.

Moving into Smart Traffic Industry

China Securities Journal: The company is now actively pursuing the smart traffic industry, what is the related industry layout?

Mr. Zhang: We have always focused on the three core elements of traffic management of "people, vehicles, and roads” and centered on the smart traffic application and travel safety field. Based on technological innovation and achievement transformation, we actively design and implement comprehensive smart traffic solutions and strengthen the construction of key demonstration projects. By continuing to optimize and improve our integrated business platform of perception, control, operation and maintenance, and service in the transportation field, we have built a new generation of urban traffic management overall solutions, urban parking service cloud platform, smart police products featured by the trinity of "precise stability maintenance, precise prevention and control, and precise response”, as well as bus priority and smart depot solutions for public transport, which provide strong technical support for the company’s development.

China Securities Journal: How do you view the impact of 5G technology on the smart traffic industry, and how does the company leverage 5G technology to develop new businesses?

Mr. Zhang: 5G technology has many advantages such as ultra-large bandwidth and ultra-high speed. It will empower urban management with high-precision positioning and ultra-bandwidth transmission, leading to the collaboration of people, vehicles, roads and clouds.

We have gained a lot of technical achievements and application experience in the field of driver training and testing as well as smart traffic, and are expected to generate more application cases empowered by 5G technology. We will accelerate technological innovation and product research and development in the fields of smart traffic, smart public security, smart security protection, and smart transportation. Base on the application of 5G technology, we strive to improve smart control technologies and products promoting vehicle-road collaboration for smart cities, and establish core product systems based on 5G technology, artificial intelligence and big data. We aim to provide overall solutions and services for the construction of smart cities through multi-dimensional perception, real-time deduction, intelligent regulation and services.

China Securities Journal: With the advancement of 5G technology, self-driving technology will play a more important role in the field of smart transportation. Does the company's current business involve self-driving technology?

Mr. Zhang: According to the classification and definition of driving automation by the American Society of Automotive Engineers, L3-L5 have achieved automation, and L5 is full automation, which is the highest level of automated driving.

Based on years of rich practice in road mapping and modeling of driving test facilities, we actively participate in the construction of "National Comprehensive Smart Transportation Testing Base". Based on high-precision mapping of semi-open real public roads within 10 kilometers of the base, we have developed mobile devices incorporating high-precision positioning and dynamic data collection for commercial vehicle testing. We have also developed core module of automated driving assessment for the integrated self-driving detection and management platform to evaluate vehicles at different levels of driving automation. In addition, we have developed a system for the operational safety testing and evaluation management platform for intelligent connected vehicles to manage testing systems and base information and enable visualized supervision of 3D and 2D maps and surveillance videos.

Apart from that, we participated in an important national research project "IVIS (Intelligent Vehicle-Infrastructure System) Integrated Testing, Evaluation, Standardization and Demonstration Application under Semi-Open Conditions". This program is part of a national key research and development initiative "Integrated Transportation and Demonstration Application". In the next step, the company will continue to increase investment in research and development in related fields, and provide overall automated testing solutions and system equipment for the self-driving vehicle testing.

Exploring Extension Development Opportunities

China Securities Journal: In 2018, the company invested in Bynav Technology. What is the strategic intention of this move?

Mr.Zhang: Bynav Technology is one of China’s high-tech enterprises that have mastered the core technology of high-precision GNSS (Global Navigation Satellite System) modules and achieved its industrial application. Its proprietary driver training and testing chips are our main supply. Field testing and use show that some performance indicators are even better than those of chips from our previous US suppliers. In 2018, we invested in Bynav Technology and expanded our footprint upstream, significantly lowering the procurement cost of key components and reducing our dependence on overseas technology. In addition, the multi-source fusion high-precision positioning chip independently developed by Bynav Technology has completed its front-end design and simulation verification. We expect to initiate the tape-out and mass production in 2019.

Our equity investment in Bynav Technology will help us better integrate upstream and downstream resources in the industry chain, improve the quality of supply chain management, boost product quality and customer service, and enhance product competitive advantages.

China Securities Journal: In terms of extension development, what is the company's main tracking direction and target, and how will it explore opportunities for extension development in the future?

Mr. Zhang: We will further tap into our R&D and marking strength as well as our advantages as a listed company. With technological innovation as internal drive, we will fully promote the business development of the "people, vehicles and roads" transportation sector through endogenous growth and extension expansion. In terms of endogenous growth, based on our existing marketing network, we will explore cooperation, joint ventures and other methods to increase research investment and promote incubation of innovative products and enrich our product line. In terms of extension development, we will actively track and study the impact of advanced technologies such as 5G technology, artificial intelligence, big data, cloud computing, and BeiDou positioning on our existing services, including smart driving test, smart driver training, and smart traffic business. In addition, we will pay attention to technological advancement in the field of ADAS (Advanced Driving Assistance System) and Internet of vehicles, and actively explore opportunities for extension development, expanding our production and sales scale.