Event: The company released its 16-year annual report, with operating income of 594 million yuan, an increase of 46.45% over the previous year, and net profit attributable to shareholders of listed companies of 56.93 million yuan, an increase of 28.08% over the previous year. Earnings forecast for the first quarter of '17. Expected losses: 4 million yuan to 8 million yuan, loss for the same period last year: 1,3032 million yuan. Comment: Performance growth is in line with expectations. In 2016, the company's performance continued to grow rapidly, with a year-on-year increase of 28.08% in net profit. In 2016, the company increased R&D efforts, and R&D expenses reached 81.4968 million yuan, an increase of 59.24% over the same period last year. High R&D expenses affected the company's net profit performance to a certain extent, but laid a solid foundation for the company's future development. The net cash flow from the company's operating activities in the current period was 114.7071 million yuan, an increase of 226.69% over the previous year. The main reason is the increase in transaction settlements received in advance by the company's Internet+smart logistics cloud service platform. It is expected that the company's Internet+smart logistics cloud platform business will continue to grow rapidly in '17. The main reason for the company's projected losses in the first quarter of '17 is the obvious seasonal fluctuations in the company's business. There were few operating income and sales paybacks in the first quarter. The main reason for the increase in losses was the increase in business-related costs and expenses, and the company had 5,5775 million yuan of restricted stock to be amortized in the first quarter. Policy support, the information technology industry is developing rapidly. With policy support, domestic software and information technology services have developed rapidly in recent years. The Ministry of Industry and Information Technology's “Software and Information Technology Service Industry Development Plan (2016-2020)” suggests that by 2020, the business revenue of the software and information technology service industry will exceed 8 trillion yuan, with an average annual increase of more than 13%. It accounts for more than 30% of the information industry. Among them, revenue from information technology services accounts for 55% of business revenue, and revenue from information security products has reached 200 billion yuan, with an average annual increase of more than 20%. The rapid development of the industry provides strong support for the continued growth of the company's performance. China's leading industry software and big data solution service provider. The company's main business is industry application software research and development, IT solutions and information technology services. The application and technology service business in traditional industries has maintained rapid growth: the company's traditional business revenue increased by nearly 45% year on year, and the growth rate is still impressive. The business has a deep technical accumulation. The main markets cover key industries with a high level of confidence demand, such as telecommunications, electricity, finance, transportation, and government. Customers include top enterprises in the industry such as China Datang Group, China Telecom Group, and Nomura Research Institute. Internet+smart logistics cloud services have become a new highlight: in '17, the company's new business, the Internet+smart logistics cloud service platform, has already begun to contribute 10.31 million yuan in revenue, accounting for 1.74% of total revenue, and the growth trend is good. Relying on its deep industry experience and technical experience accumulated in software development in telecommunications, transportation and other industries, the company followed the wave of cloud computing, developed an Internet+smart logistics cloud platform, built a complete logistics ecosystem for cargo owners, logistics companies, car owners, etc., launched a logistics sharing platform for cargo owners, logistics companies, car owners, etc., and actively entered the logistics market, with huge market space. Profit forecasting and valuation analysis: We are optimistic about the company's innovation-driven strategic layout, relying on industry software and big data, to segment the market, extend the industrial chain, build a product+technology+service system, and expand the service capabilities of the “Internet +” platform. Multi-dimensional expansion and capital help bring a new round of growth drivers to the company. The company's net profit for 17-18 is estimated to be 64 million yuan and 75.5 million yuan, corresponding to PE 129 times and 109 times, corresponding to EPS 0.67 and 0.79, giving it an “increase in holdings” rating. Risk warning: customer concentration is high, software competition in electricity, telecommunications and other industries is intensifying, and the promotion of the Internet+smart logistics cloud platform falls short of expectations