Key investment points 1. Main business revenue declined slightly. Excess tax reimbursements increased net profit of 82.3 million yuan in the third quarter, down 5.50% year on year, and realized net profit attributable to the parent company of 18.06 million yuan, up 234.36% year on year. Mainly due to a slight decline in the company's revenue from power supply products, security products, production command and transportation scheduling informatization products, and signal control products. The VAT overtax reimbursement received by the company in 2016 was a significant increase over the same period of the previous year, which is expected to increase net profit attributable to shareholders of listed companies in 2016 by 15.00%-45.00% over the same period of the previous year. 2. Revision of the fixed increase plan. The “Big Transportation Wi-Fi Strategy” is still the company's main development point in the future. In order to further expand the company's transportation WiFi business industry layout and build a transportation WiFi industry ecosystem, the company plans to privately issue no more than 18,169,582 common shares to 2 specific investors, Li Haiying and Yuan Yaqin. The total capital raised in the non-public offering of shares is no more than 270 million yuan. After deducting issuance fees, it is planned to invest all in the transportation WiFi R&D center construction project. This private stock offering is a powerful step for the company to adapt to the leapfrog development situation of domestic railway and urban rail transit construction, combine its own advantages, vigorously expand the layout of the transportation Wi-Fi business industry and build a transportation Wi-Fi industry ecosystem. In the future, the company will use the Transportation Wi-Fi R&D Center as a fulcrum to build a transportation Wi-Fi industry ecosystem. On the basis of concentrating industry resources and establishing research teams with universities, government research institutes and industry policy leaders, the company will gradually cultivate its own core R&D team, meet market needs, continuously incubate new technologies and business models, and form a strategic pattern of technology exchange, resource sharing, and complementary advantages with related companies in which the company has participated. 3. The company has obtained the first-level qualification for information system integration and service, and will continue to benefit from the “13th Five-Year Plan” Urban Rail China Railway Gaozheng Qidu Company received the “Information System Integration and Service Qualification Certificate” issued by the China Electronic Information Industry Federation on October 18, 2016. The acquisition of this qualification is a full recognition of the company's information system integration and service operation and maintenance capabilities by relevant industry authorities, which will help further enhance the company's ability to undertake information system integration and service operations and enhance the company's market competitiveness . During the “13th Five-Year Plan” period, railway investment will remain high as an important way to stabilize the economy and promote growth. The total transit mileage of subways in various cities across the country during the 13th Five-Year Plan period may exceed 4,000 kilometers, which means that the total mileage of newly built subways during the 13th Five-Year Plan period will exceed our current fleet. The company's main business is all in the railway construction information engineering stage. The railway side benefits from railway investment and preservation. In terms of urban rail, the company has established an urban rail company. With its own technical advantages and construction experience, we are optimistic about the company's development in the subway field. 4. The subsidiary Feitian Joint has obtained a modified design approval for the Flying SaFi system, which helps develop airborne WiFi business. On October 18, 2016, the company received the “Important Modification Design Approval” issued by the Civil Aviation Administration of China, number “MDA342-HB”, confirming that under given usage restrictions and conditions, the modified design of Flying Sky United to install the Flying SaFi system on Boeing's B737-800 models complies with the applicable requirements of CCAR-25 and 26 of the Civil Aviation Regulations of China. It will help Feitian and the development of airborne WiFi services in the future, and will also further promote the implementation of Huihuang Technology's “Big Transportation WiFi Strategy”. China's in-flight wireless market is still in its infancy. In the first half of this year, several airlines, including China Southern Airlines, China Eastern Airlines, and Hainan Airlines, have signed more than 200 in-flight wireless component installation orders with various suppliers. China's in-flight wireless market is rapidly entering an explosion period. Referring to foreign charges of 10 US dollars/hour, the size of the domestic air wireless market could reach 100 billion yuan. 5. Investment suggestions: As the target of railway informatization, the company benefits from the boom in the 13th Five-Year Railway construction and continues to advance towards urban rail transit. We predict that the company will achieve net profit of 90 million yuan, 114 million, and 145 million yuan in 16-18, corresponding EPS of 0.24, 0.30, 0.38 yuan, and corresponding PE of 71X, 57X, 44X, maintaining the recommendation. 6. Risk warning: New business development falls short of expectations.