The company's main business benefits from the rapid development of the railway and rail transit industry. Railway investment is an important measure to stabilize the economy and promote growth. Statistics released by the China Railway Corporation a few days ago show that in the first three quarters of this year, national railway fixed asset investment reached 542.3 billion yuan, an increase of 10.3% over the same period last year. Of this total, national railway fixed asset investment reached 517.1 billion yuan, an increase of 12% over the same period last year. In addition, according to the 13th five-year Plan (draft for soliciting opinions) issued by the State Railway Administration, during the 13th five-year Plan period, China's fixed assets investment in railways will reach 3.5 trillion to 3.8 trillion yuan, and 30, 000 kilometers of new lines will be built. By 2020, the mileage of railways in operation across the country will reach 150000 km, including 30, 000 km of high-speed railways. With the development of economy, the scale of cities in China continues to expand, the urbanization rate increases significantly, and the economic strength is further enhanced. Subway has become an important part of public transport construction in large cities with rapid economic development, and the subway operation network is beginning to take shape. Traffic volume and network density are still far lower than those of major cities in the world. The mileage of subway operation in China is in a period of rapid growth, according to the construction experience of developed countries, this stage will continue to exist with the whole process of urbanization. We sorted out the 68 major urban rail transit projects proposed by the National Development and Reform Commission in 2015 for the next three years. Through the construction of these major projects, it is estimated that by 2020, the total mileage of urban rail transit in China will reach 7000 km. The company will benefit from the stable development of the industry, business will usher in a period of stable growth.

Obtain the first-level qualification of information system integration and service, and the competitiveness is greatly improved. Recently, the company has obtained the "Information system Integration and Service qualification Certificate" issued by China Electronic Information Industry Federation, which verifies that the company's information system integration and service qualification is the first level, which is the highest level of qualification. The company is an important supplier of railway communications, monitoring and security products. With the deepening of national railway network construction and the increasing demand for line monitoring and security, the company's market competitiveness has been significantly enhanced.

Speed up the strategic layout and cut into the field of WiFi. The company continues to increase investment in research and development to enhance the core competitiveness of product technology. Relying on rail transit, the company can enhance its endogenous expansion ability, consolidate its market position and promote various business growth. At the same time, the company is committed to expanding the extension of business growth, has invested in Feitian Union, Saifu Technology, colorful access and other companies, actively develop the big traffic WiFi, to create an integrated platform. After adjusting the fixed increase plan, the company plans to issue no more than 18169582 shares to two specific investors, Li Haiying and Yuan Yaqin, and the total amount of funds raised in this non-public offering will not exceed 270 million yuan. After deducting the issuance expenses, the company intends to invest all in the transportation WiFi R & D center construction project. Vigorously expand the traffic WiFi business layout and create a powerful measure of the traffic WiFi ecosystem.

Profit forecast and rating: we expect the company's operating income from 2016 to 2018 to be 699 million yuan, 888 million yuan and 1.131 billion yuan respectively, and the net profit attributable to the shareholders of the parent company is 100 million yuan, 138 million yuan and 169 million yuan respectively. Based on the current equity (no additional issuance is considered for the time being), the corresponding EPS is 0.27,0.37 yuan and 0.45 yuan respectively. Due to the steady development of the traditional main business of brilliant science and technology, the "Big Traffic WiFi" strategy has been steadily advanced and continues to maintain the "overweight" rating.

Risk factors: 1, the risk of the decline of national railway investment; 2, the risk of product technological innovation; 3, the risk of the increase of accounts receivable; 4, the management risk brought by extension expansion.