The management team has a forward-looking strategic vision, efficient execution ability, and active promotion of strategic transformation. It has now entered a period of blossoming results. The company actively promotes a concentric diversification strategy, makes full use of the company's resources on the basis of the existing business portfolio, actively explores new markets and projects, forms a complete product chain in various business fields, and regards rail transit equipment as an important part of the medium- to long-term strategic layout. Since 2015, the company has gradually divested traditional construction machinery with low profitability, etc., to achieve business focus. Currently, the traditional business, bridge functional components, account for 40.2% of the company's revenue, and the 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 proportion of high-end products will increase, and profitability will gradually increase; ② New business rail transit sector: it has completed the preliminary layout and entered a period of rapid revenue growth. At the same time, with the scale effect 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. Rail transit vehicles: Based in Sichuan, radiating southwest, and looking at the whole country, they are expected to become “small medium cars”. 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 component 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: If we only consider the Chengdu market, during the “13th Five-Year Plan” period, Chengdu will add 393 kilometers of subway traffic mileage and 152 kilometers of tram mileage. Considering the share that the company can obtain, it is estimated that the average annual demand for corresponding company rail transit vehicles is 4 billion yuan. In 2016, the company's rail transit business revenue was only 670 million yuan, which is plenty of room for growth. At the same time, judging from the development environment, Chengdu has the conditions to nurture large rail transit equipment companies. Currently, in terms of research and development, the company makes full use of Southwest Jiaotong University's top talents in rail transit, while in terms of production and market development, it cooperates closely with companies including CRRC, China Railway Second Institute, China Railway Second Bureau, and Chengdu Metro. The company's Xinjin rail transit base is the largest rail transit base in the west. In the future, it is expected that the Xinjin base will be used as the core of R&D and manufacturing, and assembly plants will be set up nationwide, and the scope of business coverage will be further expanded in the future. 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 can also 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 10 billion dollars, and the industry is in the early stages of promotion, and is expected to become an important increase in the company's future performance: 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. Its application abroad is already very mature, and it 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 tests are being carried out 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 over 10 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 is expected to grow rapidly: in 2015, the company entered the supercapacitor field by acquiring 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 0.52, 1.89, and 311 million yuan respectively, up 180.57%, 260.38%, and 64.21%, respectively; the corresponding EPS is 0.08, 0.29, and 0.48 yuan, respectively, and PE is 93.47, 25.94, and 15.79 times, respectively. The performance ushered in an upward inflection point and maintained the “Highly Recommended” rating. Risk factors: New business development expectations are low, and traditional businesses have declined sharply.