Incident: The company issued an announcement on May 27. Dongjie Intelligence and natural person Yan Xudong jointly established Yunnan Dongjie Intelligent Parking Service Co., Ltd., with a registered capital of 10 million yuan (Dongjie Smart invests 70%). Core view: Policies have been introduced intensively, fully benefiting from the dividends of changes in industry drivers. Beginning in the second half of 2015, top-level design introduced a series of policies on the industrialization of parking. At the same time, for the first time, parking lot construction was included in the 2016 Government Report and the 13th Five-Year Plan. This is the time when the national level has placed the most emphasis on parking lot construction. Currently, specific plans for parking facilities in various regions are being introduced one after another, and with the relaxation of land acquisition, operating models, price controls, and financial support, parking industrialization will be substantially promoted. Intelligent three-dimensional parking garages shoulder the heavy responsibility of policy with their high volume ratio. 2016 will be a turning point for intelligent three-dimensional parking garages. The company set up a joint venture to enter operation in this context, and is expected to fully enjoy the dividends brought about by changes in industry drivers. The Yunnan subsidiary was quickly implemented, and the new model is expected to be quickly replicated. Dongjie has always been committed to the high-end parking garage market. With the loosening of industry policies, Dongjie Intelligence forwardly entered the “equipment manufacturing+back-end operation” operation model, actively laid out parking lot construction, and promoted the development of three-dimensional garages. The company is seeking partners across the country to set up an operating joint venture. The successful establishment of a subsidiary in Yunnan this time is the latest layout following the Tianjin project, and the new model is expected to be quickly replicated. With the implementation of the Yunnan subsidiary's business and its demonstration and promotion role, the smart parking garage business will become the company's new business growth pole in the future. Investment advice: We forecast the company's revenue in 2016-2018 to be $5.07, 6.84, and 881 million yuan, and EPS of 0.43, 0.61, and 0.92 yuan, respectively. The company has excellent software and hardware capabilities and good general contracting capabilities. The company accounts for the highest share of intelligent logistics business and the most flexible performance in the entire sector, and continues to maintain the company's “buy” rating. Risk warning: Demand for traditional main businesses has declined, garage business falls short of expectations; subsidiary operation risks.