Investment points Cross-industry intelligent system solution provider. The company is based in Shenzhen and provides intelligent system solutions for the urban rail industry, construction industry, railway and water conservancy industry. Its superior products focus on intelligent building system integration and urban rail security systems and passenger information systems. The company is one of the top ten brand enterprises in the national intelligent building industry. In 2012, the company achieved revenue of 314 million yuan and net profit attributable to the parent company of 37.84 million yuan, up 46.8% and 46% year-on-year respectively. Intelligent construction and urban rail transit business are the company's two core businesses, accounting for 77.72% and 19.59% of revenue in 2012, respectively. The acceleration of the construction of intelligent buildings and urban rail transit is beneficial to the company's development prospects. The Ministry of Housing and Construction recently prepared to launch the second batch of pilot cities on the basis of the first batch of 90 pilot smart cities at the beginning of the year, bringing huge space to the intelligent building industry. The estimated market size will reach 731.6 billion yuan in 2015. With the decentralization of rail transit approval authority, rail transit construction will usher in a wave of construction boom. It is conservatively estimated that in 2013-2015, the scale of additional investment in rail transit will reach 430 to 508 billion yuan, of which the total additional investment in passenger information systems and security systems will reach 7 billion to 8 billion yuan. As the industry where the company's dominant products are located, it also has an intelligent building brand and qualification advantages, and will benefit from the increase in the market size of these two industries at the same time. The railway informatization business is expected to receive new orders in the second half of the year. Railway infrastructure began to pick up in the second half of last year. Considering the lagging nature of the railway digital information business, the company is expected to receive new orders in the second half of the year. Looking at the longer term, the regional expansion and industrial chain expansion strategies being implemented by the company are conducive to improving long-term growth capacity. Among them, regional expansion has begun to bear fruit. Investment Strategy: Based on the company's existing orders and the recovery in railway infrastructure investment, we are optimistic about the company's performance in 2013. We expect the company's EPS for 13, 14, and 15 to be 0.23, 0.28, and 0.35 yuan respectively. The PE corresponding to the latest stock price of the company is 37.52, 30.82, and 24.66 times, respectively, covering the “increased holdings” rating for the first time. Risk warning: Project tendering, accounts receivable, railway project construction, and declining gross margin risks