Event: Recently, the company released its three-quarter report. From January to September 2016, it achieved operating income of 288 million yuan, an increase of 6.2% over the previous year; from January to September, it achieved net profit attributable to shareholders of listed companies of 56.87 million yuan, an increase of 56.16% over the previous year. The corresponding EPS is 0.15 yuan. Comment: The company's main business has benefited from the rapid development of the railway and rail transit industry. Railway investment is an important measure to stabilize the economy and promote growth. Statistics recently released by the China Railway Corporation show that in the first three quarters of this year, the country's railway fixed asset investment reached 542.3 billion yuan, an increase of 10.3% over the previous year; among them, China's railway fixed asset investment reached 517.1 billion yuan, an increase of 12% over the previous year. Furthermore, according to the “13th Five-Year Plan for Railway Development (Draft for Comments)” issued by the State Railway Administration, during the “13th Five-Year Plan” period, China's railway fixed asset investment scale will reach 3.5 trillion yuan to 3.8 trillion yuan, and 30,000 kilometers of new lines will be built. By 2020, the operating mileage of national railways reached 150,000 kilometers, of which 30,000 kilometers were high-speed railways. With economic development, the scale of China's cities continues to expand, the urbanization rate has increased markedly, and economic strength has been further enhanced. The subway has become an important part of public transportation construction in large cities with relatively rapid economic development. The subway operation network is beginning to take shape, and the traffic volume and network density are still far lower than that of the world's major cities. China's subway operating mileage is in a period of rapid growth. According to the construction experience of developed countries, this stage will continue to exist along with the entire urbanization process. We have sorted out 68 major urban rail transit projects proposed by the National Development and Reform Commission in 2015 to begin construction over the next 3 years. Through the construction of these major projects, it is estimated that by 2020, the total mileage of China's urban rail transit will reach 7,000 kilometers. The company will benefit from the steady development of the industry, and the business will usher in a period of steady growth. Obtained the first-level qualification for information system integration and service, and its competitiveness was greatly improved. Recently, the company obtained the “Information System Integration and Service Qualification Certificate” issued by the China Electronic Information Industry Federation, which certifies that the company's information system integration and service qualification is level 1, which is the highest level of qualification. The company is an important supplier of railway communication, monitoring and security products. With the deepening of the construction of the national railway network and the increase in demand for line monitoring and security, the company's market competitiveness has increased markedly. Accelerate strategic deployment and enter the Wi-Fi sector. The company continues to increase investment in R&D to enhance the core competitiveness of product technology. The company relies on rail transit to enhance endogenous expansion capabilities, consolidate market position, and promote the growth of various businesses. At the same time, the company is committed to expanding epitaxial business growth. It has successively invested in companies such as Flying United, Safer Technology, and Colorful Tongda to actively develop major transportation WiFi and build an integrated platform. After adjusting the fixed growth plan, the company plans to issue no more than 18,169,582 shares on a non-public basis to two specific investors, Li Haiying and Yuan Yaqin. The total capital raised by this non-public offering of shares will not exceed 270 million yuan. After deducting issuance fees, it plans to invest all of it in the transportation WiFi R&D center construction project. A powerful initiative to vigorously expand the business layout of transportation WiFi and build a transportation WiFi ecosystem. Profit forecast and rating: We estimate that the company's 2016-2018 operating income will be 699 million yuan, 888 million yuan and 1,131 million yuan respectively. Net profit attributable to shareholders of the parent company is 100 million yuan, 138 million yuan and 169 million yuan respectively. Based on current share capital (no additional issuance has been considered), the corresponding EPS is 0.27 yuan, 0.37 yuan and 0.45 yuan respectively. Due to the steady development of Huihuang Technology's traditional main business, the “Big Traffic WiFi” strategy is progressing steadily and continues to maintain the “increase in holdings” rating. Risk factors: 1. Risk of declining national railway investment; 2. Product technology innovation risk; 3. Risk of increased accounts receivable; 4. Management risk brought about by extended expansion.