In the low season of performance, the slowdown in growth is a normal phenomenon. The company achieved revenue of 241 million yuan, YoY +25.07%; achieved net profit of 9.18 million yuan to mother, YoY +21.31% in the first quarter of 2016. The first quarter is a low season for the company's traditional business, and the reference significance of performance is limited. We judge that the company's performance will continue to grow at a high rate throughout the year, and the sharp increase in new contract orders and accounts receivable is strong evidence. The amount of new contracts signed in the first quarter was 446 million yuan, YoY +103.95%. Accounts receivable increased to $287 million, YoY +126.94%. The company predicts net profit attributable to listed shareholders in 2016 H1 of 3459 to 51.88 million yuan, YoY +0.00% to 50.00%. Profitability remained stable, and the expense ratio increased. The company's gross profit margin for the first quarter of 2016 was 19.76%, down 0.28 pct year on year, net profit margin 3.49%, and down 0.12 pct year on year. The cost rate for the period was 17.04%, up 0.94 pct year on year. The financial expense ratio increased by 0.62 pct, mainly because the company increased capital investment in smart city project construction and “smart city model” development in various regions. The sales expense ratio and management expense ratio also increased by 0.05 pct and 0.27 pct, respectively. Net operating cash flow was -171 million yuan, YoY -98.54%, mainly due to the company speeding up the project progress and paying the corresponding purchase amount. This is reflected in cash payments for goods purchased and labor payments, which increased from 197 million yuan in 2015 Q1 to 329 million yuan in the current period. The non-public offering is awaiting approval. The accelerated implementation of emerging businesses announced on the evening of March 2, 2016 that the non-public offering application has been reviewed and approved by the Audit Committee and is awaiting official documents approved by the Securities Regulatory Commission. Key fund-raising projects include the Changchun Pension Comprehensive Cloud Information Platform (investment of 108 million yuan), investment in smart medical projects in Chongzhou City (84 million yuan), and investment in user-side energy Internet construction and operation projects (447 million yuan). After completing the fixed increase, the company will receive more industrial capital and financial capital support. On the one hand, it will lay a solid foundation for the implementation of fund-raising projects, and on the other hand, it will help the company accumulate more experience in urban and platform project construction in emerging business fields. The Zhicheng model is becoming more mature. Combined with the PPP model, it is deeply involved in local urban construction and currently has eight Zhicheng companies, which will continue to explore markets in Hefei, Nanchang, Qingdao, Langfang and other places in the future. With the rise of the PPP model, companies will also make full use of it, shifting from obtaining individual projects in the past to acquiring and participating in the city's overall business. Create a larger market for the intelligent construction business, and at the same time create a favorable market environment for smart medical care. Smart healthcare is expected to grow at a high rate, and maintain the “buy” rating. We forecast the company's 2016-18 EPS 0.22/0.30/0.40 yuan, YoY +58%/34%/35%, and CAGR 42%. Taking into account industry valuations and the company's performance growth rate, especially the increase in the profit share of software and service businesses, the company can be given 50 to 55 times PE in 16 years, with a reasonable valuation range of 11-12.1 yuan to maintain a “buy” rating. Risk warning: The development of the smart medical business falls short of expectations, and the development of the smart energy-saving business falls short of expectations.