Key investment points: The rail transit industry ushered in a golden development period. By the end of 2015, there were 26 cities operating rail transit lines in China, with a total of 116 lines. The total operating mileage of urban rail lines nationwide reached 3,618 kilometers. It is estimated that the “13th Five-Year Plan” line will be about 6,000 kilometers, and the new construction mileage will be about 3,000 kilometers, an increase of half over the “12th Five-Year Plan”. Judging from the investment amount, during the “12th Five-Year Plan” period, China invested a total of 1228.9 billion yuan in urban regulations. It is estimated that during the “13th Five-Year Plan” period, China's urban rail transit investment scale will reach 1.7-2 trillion yuan, 1.39-1.63 times the “12th Five-Year Plan” investment scale! Adequate orders guarantee the fourth quarter's performance. The company focuses on the rail transit sector. It is at the leading level in the field of railway power supply scheduling automation and integrated power supply automation, and has a stable market share. Up to now, the company has 2.06 billion yuan in on-hand orders, including 1,045 billion yuan and overseas 1,015 billion yuan. The fourth quarter is the traditional peak season for rail transit business. Coupled with the company's sufficient on-hand order reserves, it has laid the foundation for this year and next year's results. The merger is completed, and Qiangqiang Joint Anticipates Synergistic Effects The company has completed the acquisition of Tianjin Baofu, RPS and BB Single. Next, the company will give full play to the advantages of each subsidiary. On the one hand, the PRS personnel will be streamlined and optimized, and efficiency improvements are expected to gradually break out of losses and achieve profits. Hyfa will also use RPS's overseas reputation and channel advantages to “go global” and expand overseas markets. On the other hand, Hyfa already occupies a stable market share in the field of power supply automation and scheduling automation in the rail transit sector and enjoys high profit margins in the future. The expansion of sales scale and layout is still achieved through the implementation of new products such as catches and solid state switch insulation cabinets in China. At present, the company needs a series of tasks such as building a new plant, introducing equipment and applying for qualifications, and it is still necessary to wait for new products to occupy the domestic market. Profit forecasting and investment ratings We are optimistic about the steady growth trend of the rail transit industry during the “13th Five-Year Plan” period, and the company's competitiveness in the rail transit business. The company will use this merger and acquisition to further enrich its product layout and enhance its comprehensive strength. We expect the increase in the company's domestic and foreign market share to have a driving effect on performance. The company's EPS for 2016-2018 is expected to be 0.41, 0.48, and 0.83 yuan/share, giving a recommended rating.