Incident: The 2017 interim report announced that the company's revenue was 370 million yuan, -43.3% year-on-year, and the non-net profit withheld from the mother was 70.94 million yuan, -9.5% year-on-year. Investment points Bridge functional components+rail transport+new energy vehicles+supercapacitors, four-wheel drive. Bridge functional components had revenue of 280 million yuan, -1.4% year-on-year, accounting for 74%, gross margin of 32%, +3.8pct year-on-year, steady development; rail transit revenue of 10.79 million yuan, -96.7%, accounting for 2.9%. The decline in revenue was mainly due to delays in rail transit vehicle delivery cycles. The gross profit margin was 26.8%, +22.9pct year-on-year, and began to enter the normal value range. The company is based in Chengdu, located in southwest China, and is expected to bring the company an average of 4 billion yuan of urban rail vehicle space; Capacitive system revenue 60 million yuan, +254.8% over the same period, accounting for 16.1%, a significant increase. The gross profit margin is 42.0%, compared to -5 pct. Supercapacitors are developing rapidly. The company's gross profit margin was 34%, +16pct year on year, and the expense ratio was 53.9%, +22pct year on year. The decline in the company's revenue was clearly mainly due to factors such as project construction progress and customer demand progress, etc., and delays in rail transit vehicle delivery cycles; the significant increase in gross margin was due to changes in the company's product structure. R&D investment was +50.3% compared to the same period last year, mainly due to an increase in R&D expenditure for 100% low-floor urban streetcar vehicles; the company's sales, management and financial expenses were 9.6%, 30.4%, and 13.8%, respectively, +3.6pct, +13pct, and +5.5pct, and the total cost rate was +22.1pct; of these, management expenses were 110 million yuan, accounting for the highest share, similar to the same period last year. According to the details, employee remuneration for management expenses was 40.25 million yuan, accounting for 36%, technical research and development expenses, depreciation and amortization of office expenses The fees all reached more than 20 million yuan; the financial expenses were high, reaching 51.39 million yuan, which is comparable to the same period last year. A restricted stock incentive plan for the company's core talents was announced on August 12. The closing date for controlling shareholders and co-actors to reduce their holdings is approaching. The company announced the restricted stock incentive plan on August 12 and revised it on the 19th. The incentive targets for this plan are directors, senior management, core management and technical (business) personnel, etc. who worked for the company (including subsidiaries) when the company implemented this plan. The number of restricted shares to be granted is 10.43 million shares, accounting for about 1.62% of the company's total share capital. Of these, 8.39 million shares were granted for the first time, accounting for 1.30%, and 2.05 million shares were reserved, accounting for 0.32%. The performance assessment target for lifting the sales restrictions period is that the revenue for 2017-2019 is not less than 1.6 billion yuan, 2.7 billion yuan, and 3.7 billion yuan, respectively, and the initial grant price is 4.63 yuan/share. We believe this plan can fully mobilize and protect the enthusiasm of the company's core talents. Also, according to the February 27 announcement, the controlling shareholders and co-actors plan to reduce their holdings to introduce suitable investors to the company, etc. The holdings reduction period is within 6 months from February 26. If strategic investors are successfully introduced, it may bring positive changes to the company's long-term development. Holds Aowei Technology, a low-profile leader in new supercapacitor energy storage systems. Aowei Technology has had technical reserves for nearly 20 years and is a leading supercapacitor company in China. In July of this year, TUV Süddeutsche Group, the world's leading third-party testing and certification agency, obtained the first ECE R100 certificate and ECE R10 certificate for domestic supercapacitor system products, proving that Orwell Technology's automotive supercapacitor products are safe and can meet the EU's technical regulations for new energy power batteries, marking that the company has also opened up the market for new energy vehicles in Europe, with huge potential for development. Profit forecast and investment rating: The company will be completely transformed in 2017 to become the only domestic company other than CRRC that has the ability to independently develop and produce multi-standard rail transit vehicles. Supercapacitors are a low-profile leader, and the space is vast. The company's 2016 annual report clearly sets out development prospects: aiming for annual revenue of more than 10 billion yuan by the end of the 13th Five-Year Plan. The estimated EPS for 2017-2019 was 0.15/0.19/0.21 yuan, corresponding to PE 51/41/37, maintaining the “increase in holdings” rating. Risk warning: Chengdu rail transit bidding progress falls short of expectations