At present, 17% of China's highways, first-class and second-class roads need to be repaired between 2016 and 2020. We expect China's highway maintenance expenditure to increase from 78 billion yuan (RMB) in 2015 to 99 billion yuan in 2020.

Deji Technology (01301 HK, "Company") is a recognized supplier of asphalt mixing equipment in the market in China. The company's business mainly includes: the sale of asphalt mixing equipment, equipment transformation and sales of asphalt mixing equipment components, as well as asphalt mixing equipment leasing.

We expect revenue to grow from 522 million yuan in 2014 to 651 million yuan in 2017, or 13.6% compound growth in 2015-2017. We expect the company's net profit to increase from 79 million yuan in 2014 to 114 million yuan in 2017, or 15.2% compound growth in 2015-2017.

For the first time, we provide earnings per share forecasts of 0.150 yuan, 0.162 yuan and 0.184 yuan for 2015-2017, with an annual growth rate of-9.0% (due to dilution effect of new shares and listing fees of HK $16.9 million), 7.5% and 13.6% or 3.6% compound growth rate for 2014-2017, respectively. We set the company's target price at HK $2.00, which corresponds to a price-to-earnings ratio of 8.7 times the 2015Universe price-to-earnings ratio for 2016Universe. Give a "buy" rating for the first time. The main risks are lower-than-expected government infrastructure expenditure and long recovery time for receivables.