The major activities of Tibet Tianlu Communications Co., Ltd include road and bridge construction and house building project. Road and bridge construction business mainly refers to undertake construction tasks of road and bridges within Tibet autonomous region. The market share of road construction has always been occupying a leading position in Tibet autonomous region. 

In 2006, in order to integrate sources and reduce costs, Tibet Gaozheng Building Materials Co., Ltd merged and acquired Tibet Gaotian Cement Co., Ltd. At the same time, Tibet Tianlu Communications Co., Ltd invested RMB16 million to raise capital and increase shares for Tiebet Gaozhen. Up to now, Tibet Tianlu Communications Co., Ltd holds 33.69% shares of Tibet Gaozhen. In addition, Tibet Gaozhen Group Co., Ltd and Tibet Road Engineering Corporation hold 46.89% and 19.42% shares respectively.

Influenced by increasingly drastic market competition and price rise of raw materials, the business growth and profitability of Tibet Tianlu Communications Co., Ltd decreased significantly in 2006. Its gross profit margin in 2004, 2005 and 2006 was 18.34%, 17.19% and 9.78% respectively. The company's operating efficiency declined slightly, due to fierce market competition, slowness of payment and project acceptance by local government.

Composition of Main Business Revenue and Gross Profit in 2006

Changes of Key Operating Capacity Indicators

2. Road and bridge construction industry in Tibet 
2.1 Investment scale of road and bridge construction significantly increased 
2.2 Intensification of market competition 
2.3 Profit drop caused by cost rise of raw materials 

3. Cement industry in Tibet 
3.1 Rapid growth of cement demand and broad market prospect 
3.2 Difficult to change current status of insufficient cement production in short term 
3.3 Severe structural imbalance 
3.4 High cement prices caused by regional characteristics and rise of industrial boom 

4. Road and bridge construction business 
4.1 Cut of industrial monopoly position 
4.2 Operation status of road and bridge construction business 
4.3 Prospects 

5. Cement Business 
5.1 Overview of Tibet Gaozheng Building Materials Co., Ltd
5.2 Regional competition advantages 
5.3 Low-temperature residual heat power generation project will greatly improve its profitability 

6. Driving force of business growth 
6.1 Short-term drive
6.2 Long-term drive