Core view: Transportation service providers transition to modern services. The current business sectors of public transportation include transportation services, real estate, finance and equity investment. The company's latest strategy is to shift resource allocation in favor of modern service industries and reduce the allocation ratio of labor-intensive industries. At the same time, the company plans to increase investment in the financial industry. Logistics service efficiency is expected to improve. Thanks to the company's strategic transformation ideas and resource-oriented policies, mass transit is expected to catch up with the wave of logistics changes represented by “Cainiao Network”, give full play to the advantages of its terminal network and user data, and continuously improve logistics service efficiency. High-quality assets are expected to revalue Johnson & Johnson Holdings' transfer of taxi licenses, setting a value benchmark for the company's license assets (premium of 1,616 billion yuan); the rent rate of the popular building after the renovation may increase and guide the market to reevaluate its asset value (premium of 540 million yuan); the opening of an A-share IPO is approaching, and the market may focus on the room for appreciation of the company's equity investments in Guotai Junan Securities (with a premium of over 1.94 billion yuan). Profit forecast We assume that the company carefully manages earnings, and the 2013-2015 EPS stabilizes at around 0.25 yuan. Given our subjective judgment on surplus management, PE is not used as a basis for valuation. Valuation and investment recommendations If an implicit premium is included, the company's net assets will increase to 10.09 billion yuan. Based on the calculation of 1 times PB, the reasonable stock price of public transportation should not be less than 6.40 yuan. We set a reasonable valuation range for this stock between $6.00 and $7.20. The initial rating was “Recommended.” Risks suggest that the taxi and real estate industries have performed less than expected; Guotai Junan Securities and others have failed to go public successfully.