Professional AFC terminal equipment manufacturer, master core modules to achieve high product profit. The company focuses on the production of automatic ticketing system (AFC) terminal equipment, which is mainly used in subways, trams, BRT and other fields. The company's main business has a high gross margin, with an average of about 50% in recent years; the core product modules are independently developed and produced, covering the high-profit sector of the industrial chain. The new product, the casement gate, is safe and efficient, and has been approved by the Shentong Metro. It is expected to be used in the future to newly built subway stations in Shanghai and the upgrading of existing stations. The operating mileage of the 135-track transit is expected to double, and the rapid growth of the industry provides demand support. At the end of 2015, the national rail transit operating mileage was 3,618 kilometers. According to the current construction plan, it is expected to reach 8,000 kilometers by 2020, doubling the growth rate. It is estimated that during the “13th Five-Year Plan” period, the annual investment amount for urban rail transit will remain at 300 to 350 billion yuan, and the cumulative investment amount is expected to exceed 2 trillion yuan, corresponding to the demand for AFC terminal equipment at about 12 billion yuan. The product is highly recognized at home and abroad, making it the only domestic export of AFC complete machines. The company has a full contract and currently has 700 million orders in hand, reflecting the high level of market recognition for the company. The company is the only domestic AFC equipment exporter. Currently, the overseas market accounts for about 20% of revenue. The company has accumulated rich overseas business experience in Southeast Asia and South America, and is capable of continuing to expand its business field to developed countries in Europe and North America in the future. Intelligent transportation is the main line, expanding business fields horizontally and vertically. On the one hand, the company is expanding the downstream system integration field vertically, and recently signed a contract for the Songjiang tram project with a total price of 71 million yuan, which is expected to be the first to achieve new breakthroughs in the streetcar field. On the other hand, the company acquired 7% of Albus Network Technology's shares to enhance the company's data operation and maintenance capabilities; in August, it signed an agreement with the Yuxi Municipal Government and others to build smart cities and other projects to achieve new expansion in the field of intelligent transportation. We forecast that the company's main business revenue in 2016-2018 was 2.43/318/415 million yuan, respectively, up 29.9%/30.9%/30.5% year on year; net profit to mother was 62/83/108 million yuan, up 47.0%/33.2%/30.1% year on year, respectively; EPS was 0.45/0.60/0.78 yuan, respectively, and corresponding PE was 77/58/45 times, respectively. We believe that the company has abundant orders and strong market competitiveness, that peak rail transit operating mileage construction brings performance support, and that epitaxial expansion of the intelligent transportation landscape will continue to expand, and the growth space is expected to continue to expand. The first coverage gave the company a “buy” rating, and the target price for the next 6-12 months was 58-62 yuan.