Divesting inefficient assets such as construction machinery, focusing on the rail transit sector: Since 2015, the company has gradually divested traditional construction machinery with low profitability, etc., to achieve business focus. Currently, traditional business bridge functional components account for 40.2% of the company's revenue, and rail transit business has reached 43.7%. We believe ① The main downstream applications of traditional business bridge functional components come from urban rail transit. With the arrival of the peak period of urban rail construction, it is still expected that the product structure will continue to be optimized, the share of high-end products will increase, and profitability will gradually increase; ② New business rail transit sector: it has completed the preliminary layout stage and entered a period of rapid revenue growth. At the same time, with scale effects and continuous independent development of the company's core components, profitability is expected to increase significantly. The company's performance has ushered in an upward inflection point. The rail transit vehicle business has ushered in a significant increase in revenue and profitability: the company has now developed an assembly capacity for urban rail transit vehicles represented by modern streetcars and subways, as well as production and processing capacity for key components of car bodies and bogies. At the same time, the company's actual controllers and co-actors plan to bring in strategic investors through holdings reduction to further increase and accelerate the company's business development in core fields such as rail transit. ① Revenue side: In the subway sector, the company's market share in the Chengdu market reached 50%; in terms of streetcars, the market share of the Chengdu market reached 100%. Simply considering the Chengdu market, during the “13th Five-Year Plan” period, Chengdu will add 360 kilometers of subway traffic mileage and 150 kilometers of tram traffic. Considering the share that the company can obtain, it is estimated that the average annual demand for corresponding company rail transit vehicles is estimated to be 4 billion yuan. In 2016, the company's rail transit business revenue was only 670 million yuan, which is plenty of room for growth. ② In terms of profitability: Currently, the company's rail transit vehicle business mainly produces B-type cars. The model company has only carried out the assembly process, no independent production of key components, and the gross margin level is only 5%. In the future, market demand will mainly be A-type cars. In addition to having vehicle assembly capabilities, the company will independently process and produce vehicle body parts, which will greatly increase the gross profit level of the company's vehicles. The new rail transit system has a market space of 100 billion dollars. The company's products are expected to become an important increase in the company's future performance during the experimental promotion period: the new rail transit system has advantages such as suppression of rail wear, long life, low operation and maintenance costs, remarkable damping and noise reduction performance, and rapid on-site construction. It is already very mature in foreign applications, and is in the early stages of domestic promotion. The company began research and development in 2012. Currently, it has been applied to the Xinjin R1 line and the Yunnan Honghe tram project, and is being tested on Guangzhou Metro Line 14. After the tests are successfully completed, it has an important impact on the promotion and application of the company's new rail transit system. The cost of the new rail transit system is about 7 million per kilometer (single line). Facing the national market, the total potential market size of the country is close to 100 billion dollars. As the first entrant in the industry, the company has obvious advantages and is expected to become an important growth point for the company's future performance. The supercapacitor business has entered a period of explosion: in 2015, the company entered the supercapacitor field through the acquisition of 51% of Aowei Technology's shares, and achieved revenue of 72 million in 2016. Aowei Technology's supercapacitor systems are mainly used in modern streetcars, new energy buses, and tunnel locomotives, etc., and are in a leading position in the country. Among them, the market share in the tram sector has reached 90%. With the rapid growth of streetcar and new energy vehicle applications, the supercapacitor business is expected to grow significantly. Profit forecast and rating: The company's net profit for 2017-19 is expected to be 0.45, 1.74, and 282 million yuan respectively, up 143.00%, 282.84%, and 61.91% year-on-year respectively; the corresponding EPS is 0.07, 0.27, and 0.44 yuan, respectively, and PE is 106.22, 27.75, and 17.14 times, respectively. The performance ushered in an upward inflection point, giving it a “highly recommended” rating. Risk factors: New business development expectations are low, and traditional businesses have declined sharply.