Highway business is still the main business of the company.

After the separation, the main business of Longjiang Traffic is investment, development, construction and management of toll highway, including the operation and management of Harbin-Daqing Expressway and its supporting service facilities. Longjiang Traffic participates in Dongsui Expressway, accounting for 48.76% of its registered capital. Dongsui Expressway mainly operates and manages Hashan Expressway (Harbin-Shangzhi). The Harbin-Dalian Expressway was overhauled in 2008, and the weight toll model was implemented in 2009, and the overall revenue remained stable and rising. Relatively speaking, the situation of Hashan Highway is worse, and the rate of return is lower than that of Ha-Da Expressway.

The strong support of major shareholders and the government is one of the driving forces for the development of the company.

In the separate listing report, the major shareholders of the listed company have promised to inject their high-quality assets such as highways into the company at an appropriate time after the completion of the separate listing, so as to enhance the sustainable profitability of the listed company. And the Heilongjiang government issued a relevant reply, agreeing to inject the highway assets of the Mudanjiang-Xingshan section of the Heda highway into the listed companies after this separate listing. However, the rate of return of major shareholder Longgao Group's main highway assets is lower than that of listed companies, so it is difficult to improve shareholder returns by injecting them into listed companies.

Diversified business strategy is the second driving force for the development of the company.

On the basis of constantly optimizing the asset management and efficiency of existing expressways, listed companies are looking for upstream and downstream related businesses of highway construction, management and operation, highway service areas and gas station business, as well as the "12th five-year Plan" project of Heilongjiang Provincial Department of Communications, while actively exploring major transportation projects, including local railway, local water transportation, airport group business, etc. It is especially worth mentioning that with the support of the Heilongjiang government, in order to continuously improve the company's main business structure and make full use of the platform for the development of trade at the border ports of Heilongjiang Province, on June 7, 2010, the company signed an intentional agreement on the establishment of Longshen International Economic and Trade Co., Ltd with Heilongjiang Tianzheng Cereals, Oils and foodstuffs Import and Export Co., Ltd and Shanghai Agricultural, Industrial and Commercial Investment wage. It has laid a good foundation for the diversification process of the company.

Optimizing the ownership structure of each subsidiary is the third driving force for the development of the company.

After the separation, the company acquired seven holding and shareholding subsidiaries from Northeast Expressway, including Dongsui Expressway, Dalian Donggao New Pipe Co., Ltd., Shenzhen Dongda Investment and Development Co., Ltd., Yangpu Dongda Investment and Development Co., Ltd., while improving the organizational structure and rules and regulations, the company actively explores and optimizes the ownership structure of holding or shareholding subsidiaries, liquidating or selling loss-making or low-yielding enterprises.

Investment suggestion

We judge that after the division, Longjiang Traffic will further promote its diversification strategy while improving its organizational structure, rules and regulations and straightening out existing assets. this includes highway-related upstream and downstream business, real estate development business and border trade business, etc., the support of Heilongjiang provincial government is also conducive to the gradual development of the company's diversified business, and the rate of return on assets is gradually improved. We will closely monitor the development of the company's business and will not make a rating for the time being.