Key investment events: The company released its 2016 annual report and achieved operating income of nearly 3.5 billion yuan during the reporting period, an increase of 16.1% over the previous year; net profit of 120 million yuan, a year-on-year decrease of 19.4%. The profit distribution is that the company plans to distribute a cash dividend of 1.2 yuan (tax included) to all shareholders for every 10 shares, while transferring 10 shares to all shareholders for every 10 shares by transferring capital reserves to share capital. The transformation continues, and the car sales performance is bright: the company's main business consists of the advertising media sector and the car service sector. The advertising and media business had revenue of nearly 4.6 billion yuan in 2016, accounting for 13.7% of the main revenue. The automobile service business had revenue of 2.92 billion yuan in 2016, accounting for 86.3%. Among them, the revenue of automobile 4S stores increased significantly, up 30.3% year on year, accounting for 71.3% of main revenue; other auto service revenue fell 26.7% year on year, mainly due to the ongoing business transformation of Longyuan Industry and Trade, a wholly-owned subsidiary of the company, and a decline in large-scale vehicle maintenance, testing and parts sales. The establishment of “Lund Sanyou” has obvious background advantages: at the beginning of 2016, the company, Huashang Sanyou and GCL Ruitong jointly funded the establishment of “Longrui Sanyou New Energy Vehicle Service Company” to develop the construction and operation of charging stations for new energy buses. The majority shareholder of the company, the Beijing Public Transport Group, has the advantages of space, vehicles and other resources for bus traffic operations in Beijing, which helps the company to rely on bus stops and actively lay out the charging facilities service network in Beijing; Huashang Sanyou and GCL Ruitong can provide integrated processes from product manufacturing, power plant design and construction to charging pile operation and maintenance, etc., making the company's charging pile business unique. Beijing's promotion of NEV development brings profit margin: In recent years, due to serious air pollution and other reasons, Beijing has spared no effort in promoting new energy vehicles, while at the same time focusing on the construction and improvement of the network of charging service facilities, abolishing the purchase restriction policy for new energy vehicles and providing considerable purchase subsidies. The replacement rate for new energy buses in Beijing has increased dramatically. It is estimated that a total of 10,000 to 15,000 gasoline and diesel buses will be replaced during the “13th Five-Year Plan” period. The company is a pioneer in the field of charging operations. In 2016, the company began construction of 20 charging stations, including 155 charging stations to serve buses and 34 charging stations to serve social vehicles. In the next two years, with the gradual implementation of the policy, the company will achieve rapid revenue growth. Profit forecast and investment advice: The company's 2017-2019 EPS is expected to be 0.41 yuan, 0.55 yuan, and 0.65 yuan respectively, and the corresponding PE is 35 times, 26 times, and 22 times, respectively. We believe that the company is a scarce target for charging operations. It is expected that as the popularity of charging stations increases, it will receive more market attention and maintain its “increased holdings” rating. Risk warning: the risk that the promotion of new energy buses in Beijing will fall short of expectations; the risk that the construction of charging stations is too slow.