Comment: Overall opinion: The company achieved rapid revenue growth in 2012, mainly due to the rapid increase in the total number of new contracts signed in the building intelligence business. The rapid growth rate of net profit was mainly due to the rapid increase in revenue and strict cost control; the 2012 Q4 single quarter revenue increased 65.8% year on year, the second highest point in the single-quarter revenue growth rate since the company went public (only lower than 80.8% in 2012 Q2). The rapid growth in the company's revenue and net profit validates the judgment in our previous report that the company has entered a period of recovery in performance. Considering that market demand for intelligent water resources and intelligent rail traffic is expected to increase significantly in 2013, we forecast that the company's EPS from 2013 to 2015 will be 0.53 yuan, 0.65 yuan, and 0.80 yuan, respectively, with an average annual compound growth rate of about 28.3% over the next three years. The company's current stock price corresponds to a price-earnings ratio of about 41 times that of 2013, and the valuation has entered a reasonable range. Considering that the company's total market capitalization is small (currently 2.17 billion yuan), there is still plenty of room for growth in the future, so we maintain an investment rating of “increased holdings”. The reasonable price range is 21.20 yuan to 23.85 yuan, corresponding to the 2013 price-earnings ratio of about 40 to 45 times, and the target price for 6 months is 22.50 yuan. Revenue analysis: The revenue of intelligent buildings and intelligent rail transit is growing rapidly. In 2012, the company's overall revenue increased by about 46.8% year on year. Among them, revenue from intelligent construction increased by about 80.0% year on year; revenue share increased from 63.4% in 2011 to 77.7% in 2012; rail transit intelligent revenue also increased by about 71.7% year on year; and business revenue such as railway digital information systems, intelligent water conservancy systems, intelligent lighting and power saving, and small radio monitoring stations, etc., which accounted for relatively low levels, declined significantly. We judge that the rapid increase in revenue from intelligent construction is mainly due to the increase in market demand. In recent years, the number of new large-scale commercial buildings in China has been added, and at the same time, the degree of intelligence of single buildings has also been continuously improved, leading to an increase in the number and volume of intelligent construction projects; while the rapid growth rate of intelligent rail transit revenue is mainly due to the low base effect. Looking ahead to 2013, we expect that intelligent water resources and intelligent rail transit businesses are expected to show rapid growth and become the main source of growth for the company's performance; while demand for intelligent construction will remain strong, the growth rate will slow significantly due to the high base. Analysis of gross margin and expenses: Overall gross margin declined markedly, and strict cost control led to a significant decrease in marketing and management expenses over the same period last year. In 2012, the company's comprehensive gross margin was about 22.7%, a year-on-year decrease of about 4.8 percentage points, a significant decline. There are two main reasons for the sharp decline in gross margin: First, the gross margin of intelligent rail transit and intelligent construction declined significantly. Among them, the gross margin of intelligent rail transit fell from 34.9% in 2011 to 20.6% in 2012, while the gross margin of intelligent construction fell from 26.4% to 22.8%; second, the business structure changed, and the share of intelligent building business revenue with low gross margin increased from 63.4% to 77.7%. In 2013, we expect that as the company enters the field of comprehensive monitoring of rail transit, the gross margin of intelligent rail transit is expected to rise significantly; while the gross margin of intelligent construction is expected to remain stable. In 2012, while revenue was growing rapidly, the company achieved good cost control results with a 9.2% year-on-year reduction in sales expenses and a basic level in management expenses. The total decrease of the two expenses was about 3.3% year-on-year, and the increase in expenses was far lower than the increase in revenue. Judging from the details of sales expenses and management expenses, most of the company's expenses have declined markedly. In particular, employee remuneration has declined by about 15.6% when the total number of employees in the company increased by 38. We speculate that this may be related to the company's adoption of very strict cost control measures. Whether the company will face upward pressure on expenses in 2013 remains to be further observed. Maintain the “Overweight” rating. Considering that market demand for intelligent water resources and intelligent rail traffic is expected to increase significantly in 2013, we forecast that the company's EPS from 2013 to 2015 will be 0.53 yuan, 0.65 yuan, and 0.80 yuan, respectively, with an average annual compound growth rate of about 28.3% over the next three years. The company's current stock price corresponds to a price-earnings ratio of about 41 times that of 2013, and the valuation has entered a reasonable range. Considering that the company's total market capitalization is small (currently 2.17 billion yuan), there is still plenty of room for growth in the future, so we maintain an investment rating of “increased holdings”. The reasonable price range is 21.20 yuan to 23.85 yuan, corresponding to the 2013 price-earnings ratio of about 40 to 45 times, and the target price for 6 months is 22.50 yuan.