◎ Main opinion: The main business is growing rapidly, and the cost control results are remarkable. There are two main reasons why the company achieved rapid growth in 12 years: one is the high growth of the company's main business. During the reporting period, the company achieved revenue from intelligent construction systems of 24,383.1 million yuan [77.72% of revenue], an increase of 80.04% over the same period of the previous year, and realized revenue from intelligent urban rail transit systems of 61.4638 million yuan [19.59% of revenue], an increase of 71.71% over the same period of the previous year; Second, the company set up a leading group to reduce costs in '12, to strengthen implementation, pay close attention to all aspects and strengthen implementation. Jane Management costs and comprehensive cost control have reduced sales expenses by 9.2% year on year, and management expenses increased by only 2.59% year on year. Gross margin declined by 4.77 percentage points, mainly due to differences in project structures. There is little risk of continued downside in the future. Urban rail transit investment is accelerating, and rail transit business may accelerate growth. In 2012, the company achieved revenue from intelligent urban rail transit systems of 61.4638 million yuan, accounting for 19.59% of revenue, an increase of 71.71% over the same period last year, and added contracts of 17.88 million yuan in 2012. From this, it can be seen that the high growth of the company's rail transit business in 12 years was mainly a confirmation of the operating income achieved by projects carried out in previous years this year. Along with the approval of rail transit investment in various regions in 2012 and the acceleration of the promotion of some rail transit in the past, the growth rate of domestic urban rail transit investment is expected to reach more than 15% starting in '13. The 12th Five-Year Plan period will all be a period of rapid growth. The company has rich products and leading technology in the intelligent rail transit business field. It has mature solutions in the fields of integrated monitoring systems, communication systems and signal systems, where demand is strongest. The market competitiveness is strong, and it is expected to seize the golden period of industry investment and achieve continued high growth. There are plenty of orders for intelligent construction, and the industry has a bright future for development. The company's intelligent construction business ranks in the top ten in the industry, with leading technology, products and major project advantages in the industry. In 2012, the company achieved revenue from intelligent building systems of 24,383.1 million yuan, an increase of 80.04% over the same period last year. This year, the new campus of the Hengqin Island Macau University increased revenue by 128.2624 million yuan. However, the company signed a new construction intelligence business of about 450 million yuan in 2012, and the orders that have been signed but have not been executed are about 300 million yuan [including the nearly 70 million yuan to be confirmed by the University of Macau in Hengqin Island, which will be confirmed in 13]. It has won the bid but has not yet signed an order or is close to 200 million yuan. These have guaranteed the company's continued high growth in this business in '13. At the same time, along with the improvement of national energy saving and emission reduction standards and the promotion of intelligent construction, the intelligent building industry will maintain rapid growth in the 12th Five-Year Plan period and beyond. Regional and business expansion is accelerating, and market competitiveness continues to improve. Beginning in 2012, the company actively expanded its regions and fields to accelerate growth: (1) In terms of regional expansion, the company's revenue in South China still accounted for about 70%, but the company's business growth in Southwest China, East China, and Central China all achieved rapid growth. In 2012, the company used excess capital of 120 million yuan to invest in the establishment of the Hefei base and operate as a wholly-owned subsidiary. The first phase of the project is expected to achieve sales revenue of 230 million yuan, total profit of 31 million yuan, and net profit of 26 million yuan. At the same time, the establishment of branches in other regions will be accelerated, and the company's regional expansion will usher in breakthroughs in the future; (2) In terms of business areas, the company is actively seeking high-quality investment projects, trying to cooperate through capital means such as mergers and acquisitions, cooperative investments, and partnerships, broadening the scope of business, quickly entering business areas related to the present, improving economies of scale, and achieving rapid layout in business fields such as intelligent construction, intelligent rail transit, high-speed rail intelligence, and safe cities. At the same time, in '13, the company will reform its production and operation model, optimize management structure, set up division operations, improve production efficiency, and continue to improve market competitiveness. Entering a period of accelerated growth, we continue to be optimistic about the company's future development. With the acceleration of the company's business expansion, optimization of business processes, and adjustment of business strategies, the company's market competitiveness continues to improve. At the same time, the company continues to enhance its position in the industry in the fields of intelligent construction, intelligent rail transit, and intelligent water resources through measures such as talent introduction and R&D investment, and the potential for continuous growth is gradually showing. It is conservatively estimated that the company can achieve EPS of 0.51 yuan, 0.63 yuan, and 0.77 yuan respectively from 2013 to 2015, corresponding to 41.90, 33.72, and 27.40 times PE. The short-term increase compared to the initial recommendation has already exceeded 100%. Focus on adjustment risks and continue to recommend.