Report Summary: Event Overview We recently conducted research on the company and exchanged information with the company on the company's development. Core Logic has been deeply involved in the prestressed steel products industry for decades, and its leading position in the industry is stable, and will continue to benefit from increased investment in infrastructure construction. The CRTS III track board that the company participated in research and development has a broad market, which is expected to bring continuous impetus to the company. The subsidiary Xinjiang Yinlong has the production conditions and is focusing on the increase in business brought to the company by infrastructure in Xinjiang and the Belt and Road Initiative. Leading prestressed steel products are expected to benefit from the industry's removal of production capacity and infrastructure investment growth. In the third quarter of 2016, the company's performance improved significantly, achieving net profit of 54.354 million yuan in a single quarter, an increase of 85.48% over the previous year. Since the second half of 2016, the wire production rate of major domestic steel mills has declined markedly, and the removal of wire rod production capacity, which is the main raw material for prestressed steel products, has accelerated markedly. We believe that the company, as an industry leader, will benefit from the removal of production capacity in the prestressed steel products industry, and the concentration of the industry is expected to increase further. The company's products are widely used in railways, highways, water conservancy, civil construction and other fields, directly benefiting from increased infrastructure investment. As investment growth in manufacturing and real estate decelerates, infrastructure investment will continue to play an important role in countercyclical adjustment. A few years from now, construction projects such as railways, subways, airports, and water conservancy construction will be concentrated, and the company will fully benefit from increased infrastructure. The high-speed rail track board business has great potential. The company entering the rail market is the main developer of CRTS type III ballastless track boards and flow production lines. Currently, it has 5 high-speed rail track board production bases, and related products have been successfully used on routes such as the Zhengxu high-speed rail, Lanxin (test section), Xibao, and Shendan. According to the “Medium- to Long-Term Railway Network Plan”, the scale of China's high-speed railway network will reach 38,000 kilometers in 2025. According to our estimates, China's high-speed rail track board market space is conservatively estimated to exceed 21 billion yuan from 2017 to 2025. The company is currently fully assisting the production of the Beijing-Shenyang High-Speed Rail Liaoning Section of the Jianping Project Board Plant, and will expand the East China and Southwest China Railway track board markets through joint ventures such as Shanghai Railway Wuhu Track Board Co., Ltd. and Chengdu Southwest Railway Track Co., Ltd. In addition, the company invested 100 million yuan to establish Hangang Steel Yinlong and joined hands with Hangang Steel Group to enter the rail market. Focus on the company's expansion in the fields of steel rails, rail pillows, turnouts, etc. Profit forecast and investment advice: Regardless of future mergers and acquisitions factors, the company's EPS from 2016 to 2018 is expected to be 0.38 yuan, 0.46 yuan, and 0.53 yuan respectively, and the corresponding PE is 38 times, 31 times, and 27 times, respectively, covering the “highly recommended” rating for the first time. Risk warning: infrastructure investment falls short of expectations, railway construction progress falls short of expectations, and raw material prices fluctuate sharply.