Main opinion 1. The main business grew steadily and the business conditions were good. During the reporting period, the company adhered to the development strategy of “product transformation from a single product supplier to system integrator and operation service provider, and from extensive management to intensive management”. At the same time, benefiting from the influence of China Railway's high prosperity, the company's main business grew 11.73%. Among them, power products, security products, production command and dispatch informatization products, and signal control products increased by 86.02%, 15.66%, 193.74%, and 1006.89%, respectively, compared with the same period last year. There was a significant change in the financial expenses of the company's three fees. The financial expenses for the reporting period were -3.82 million yuan, a decrease of 276.64% compared to 2.16 million yuan in the same period last year. The main reason was the increase in interest on deposits received during the reporting period. 2. Revision of the fixed increase plan. The “Big Transportation Wi-Fi Strategy” is still the company's main development point in the future. The cancellation of the fund-raising project “supplementary working capital” has little impact on the overall fixed increase plan. The company's cash flow is healthy and stable, and the cancelled working capital projects will not affect the development of the company's various businesses. This non-public stock offering is a powerful measure for the company to adapt to the macro-situation of the leapfrog development of domestic railway and urban rail transit construction, combine its advantages, and vigorously expand the industrial layout of the transportation Wi-Fi business and build a transportation Wi-Fi industry ecosystem. In the future, the company will build a transportation Wi-Fi industry ecosystem with the transportation Wi-Fi R&D center as the fulcrum. On the basis of concentrating industry resources, establishing research teams with universities, government research institutes and industry policy leaders to thoroughly research and learn about the core technology of transportation Wi-Fi, the company will gradually train 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 participating in the company. 3. The “13th Five-Year Plan” urban rail China Railway is booming, and the company continues to make profits. During the “13th Five-Year Plan” period, railway investment will remain at a high level as an important way to stabilize the economy and promote growth. The total traffic mileage of subways in various cities across the country may exceed 4,000 kilometers during the 13th Five-Year Plan period, which means that the total mileage of newly built subways during the 13th Five-Year Plan period will exceed the amount we currently own. The company's main business is in the railway construction informatization project stage. The railway side benefits from high levels of railway investment and preservation. On the urban rail side, the company 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. Major shareholders' holdings increase and employee shareholding plans highlight the development confidence. The company plans to issue a total of no more than 55.18 million shares to Mr. Li Haiying and Ms. Yuan Yaqin through a non-public offering, with an issue price of 14.89 yuan/share. After issuance, the majority shareholders will account for 26.13% of the company's shares; the “Hongta Asset Huihuang No. 1 Specific Customer Asset Management Plan” subscribed to in the first phase of the company's employee stock ownership plan has an average transaction price of 14.67 yuan/share. The number of shares purchased accounts for 3.94% of the company's total share capital. The majority shareholders' holdings increase and employee shareholding plans clearly reveal confidence in the company's long-term development. 5. Investment suggestions: As a beneficiary of railway informatization, the company benefits from the high prosperity of railway construction in the 13th Five-Year Plan and continues to advance towards urban rail transit. We predict that the company will achieve net profit of 140 million, 169 million, and 216 million yuan in 16-18. The corresponding EPS is 0.37, 0.45, and 0.57 yuan, and the corresponding PE is 46X, 38X, and 30X, maintaining the recommendation. 6. Risk warning: New business development falls short of expectations.