Investment Highlights: News/Announcements: Chutian Expressway released its first three quarterly reports of 2016. During the reporting period, the company achieved revenue of 948 million yuan, a year-on-year increase of 1.05%, and realized net profit of 323 million yuan, a year-on-year decrease of 18.08%, and an EPS of 0.22 yuan. The average weighted ROE was 7.64%, 2.37 percentage points year-on-year. The results were generally in line with expectations. The increase in business brought about a sharp reduction in taxes. Excluding deferred income tax affected the actual net profit growth rate of 13.73%. Since the company's main business tax was changed from sales tax to value-added tax starting 5 of this year, sales tax and surcharges were 16.833,600 yuan during the reporting period, a decrease of 47.19% compared to the same period last year, resulting in a reduction of total operating costs compared to last year. Since the company absorbed consolidated subsidiaries in 2015 and applied special tax treatment and confirmed that deferred income tax assets of 111 million yuan were used to offset income taxes, income tax fees were drastically reduced by only 1,5541 million yuan in the first three quarters of 2015. During the reporting period, income tax expenses returned to normal to 119 million yuan, an increase of 117 million yuan over the same period last year. Ultimately, net profit decreased by 18.08% compared to the same period last year. Excluding the impact of deferred income tax in 2015, net profit to the mother actually increased by 13.73% during the reporting period. The acquisition of Miki Smart went smoothly as scheduled, and the collaborative development of the Internet of Things can be expected. The company announced in July that it plans to issue shares to acquire 100% of Miki Smart's shares. It was filed and approved by the Hubei Provincial State-owned Assets Administration Commission on August 19, accepted by the Securities Regulatory Commission on September 9, received feedback from the Securities Regulatory Commission on September 30, and is currently actively preparing responses. Miki Intelligence is committed to the R&D, design and manufacturing of IoT products, and has a complete communication equipment development and quality control system. Chutian Expressway's acquisition of Miki Intelligence will help Miki Intelligence to quickly improve its layout in the Internet of Things and the Internet of Vehicles. At the same time, Chutian Expressway will use Miki Intelligence to introduce “intelligent transportation” management services, which will help achieve intelligent monitoring, intelligent charging, intelligent traffic management, etc., thereby improving road traffic efficiency and service quality, which will further promote revenue and profit growth. The high-speed sector is at the cutting edge of national reform, and expectations for continued mergers and acquisitions are strong. In the context of state-owned enterprise reform, Chutian Expressway's acquisition innovatively introduced management shareholding. If the merger and acquisition is successfully implemented, the company will become the first expressway enterprise to complete management shareholding. Expressway companies have always had strong transformation expectations due to road production period issues. Combined with the company's venture capital fund project layout, we expect the company to continue to transform in the future, and Chutian Expressway is expected to become a leading enterprise in the transformation of high-speed stocks. Maintain profit forecasts and maintain buying ratings. We maintain our profit forecast. Considering that Miki Intelligence may be combined in the fourth quarter, we expect Chutian Expressway's revenue from 2016 to 2018 to be 2,810 billion yuan, 3.144 billion yuan, and 3.499 billion yuan respectively, with net profit of 430 million yuan, 476 million yuan, and 520 million yuan respectively. After dilution, EPS will be 0.25 yuan, 0.27 yuan, and 0.30 yuan respectively, corresponding to the current stock price PE of 21 times, 20 times, and 18 times, respectively, maintaining the purchase rating.