Main opinion 1. After the transfer of the agreement is completed, the actual controller of the company may change. Currently, Xinzhu Investment and its co-actors hold 27.16% of the shares in Xinzhu shares. When the transfer ratio is 5%-20%, the controlling shareholders and actual controllers who have completed the transfer of newly constructed shares may change. The transferee of the shares has not yet been determined. New Construction Investment plans to determine the final share transferee through a selection method. The selection criteria are to give priority to domestic central enterprises or state-owned enterprises. The purpose of reducing holdings is to introduce investors who have a synergistic effect with their business (investors give priority to central enterprises or state-owned enterprises) for new construction shares in the current booming development of the domestic rail transit sector and further favorable related industrial policies, in order to further increase and accelerate the company's business development in core fields such as rail transit. 2. PPP has gradually become the mainstream of development and financing for urban rail projects. The introduction of a central enterprise/state-owned enterprise background will help to further solve the funding problem, accelerate business development, and the layout of the rail transit industry has taken shape. It has become the second domestic enterprise with production capacity for urban rail vehicles (including subways, trams, etc.) other than CRC. All 300 low-floor vehicle fund-raising projects have been completed. PPP has gradually become the mainstream of urban rail project financing. The company first adopted the PPP cooperation model to participate in the construction of the R1 line of the modern streetcar demonstration project in Xinjin County, and already has an advantage in receiving orders in Chengdu and surrounding areas. Introducing a central enterprise/state-owned enterprise background will help the company expand markets outside of Sichuan. 3. The rail transit industry in the southwest region is booming. The company is located in the southwest with the power of PPP. Looking at the booming development of the rail transit industry in the southwest region from the 13th Five-Year Plan; we estimate that the four southwest provinces and cities (Yungui, Sichuan, and Chongqing) have added 489 kilometers of subway traffic in the past two years (2017-2018), and the subway car market size has reached 13.2 billion to 17.6 billion yuan; in addition, during the 13th Five-Year Plan period, the tram mileage under planning or construction in the four southwest provinces has reached 800 kilometers, and the cumulative investment scale is expected to reach 104 billion yuan to 120 billion yuan, with a cumulative investment scale of between 104 billion yuan and 120 billion yuan. Streetcar market The scale reached 198-27.9 billion yuan. As a local enterprise, the company directly benefited from its location advantages, and the company participated in the construction of the R1 line of the modern streetcar demonstration project in Xinjin County earlier and pioneered the PPP cooperation model. With practical experience, the company is likely to win the bid for the remaining projects in the future. 4. Profit forecast predicts that in 2017-2019, the company will achieve net profit of 74 million, 156 million, and 302 million yuan attributable to shareholders of listed companies. There is a possibility of further increases in performance in the next two years. The corresponding EPS is 0.12, 0.24, 0.47, and the corresponding PE is 75X, 36X, and 18X. This year is the year of transformation and the company maintains a highly recommended rating.