Listed on the Shanghai Stock Exchange in February 2015, the company is engaged in the production of prestressed concrete steel, which is used in infrastructure (railways and water conservancy account for half). The company has formed a relatively rich product line, including steel wire, steel strand, steel bar, profound technical heritage, nearly 20 years of hard work in the industry. In the second half of 2013, the business entered the field of technology-related downstream high-speed railway track plates. Through the signing of a technical contract with the Railway Research Institute, the company's CRTS III pre-tensioned ballastless track slab production contributed to the performance in 2015, partly resisting the volatility of infrastructure growth.

The company has excellent quality and pure infrastructure property, and the past demand has brought high performance flexibility. Last year, the operating income was 1.48 billion, an increase of 6.27% over the same period last year, and the net profit attributable to it was 145 million yuan, an increase of 12.76% over the same period last year. The company's two major businesses are related to infrastructure projects. First, the demand for steel for prestressed concrete mainly depends on the investment growth of downstream industries, which is a typical "investment-driven" industry. Last year, both real estate and infrastructure rebounded in stages, and product sales recovered. Sales of steel wire and steel strands reached 20.4 and 163000 tons respectively, up 24% and 12% over the same period last year, and the gross profit margin of the products increased slightly. Second, the demand for track plates corresponds to railway construction. Although revenue declined last year, it was mainly due to the decline in the unit price of products due to different business models, the sales volume was basically flat, and the gross profit margin remained above 30%. The resumption of the cycle leads to highly resilient performance.

Ballastless track is the most critical core technology for the safety and comfort of high-speed trains. The company stands out by virtue of its historical relationship with China Railway and its R & D capability to master the core third-generation technology. According to the results of the current research, the CRTSIII ballastless track slab is completely different from the previous two generations in terms of track structure design, structural force and brand-new theoretical system. The utility model has the advantages of simple technical structure, convenient construction, stable durability and convenient maintenance, and the resources and raw materials used in economic benefits are also relatively economical. The performance of the Ⅲ slab of the pre-tensioned ballastless track owned by the company has a performance advantage over its peers. With the accumulation of experience in the construction sections of Zheng-Xu line and Beijing-Shenyang line, it is expected to stand out in the subsequent bidding and seize market share, while the high-tech added value of the products ensures its sustainable profitability. According to the data of the past two years, the net interest rate is close to 15%.

The vast world has a bright future, and we will make more efforts to meet the next round of growth. As the speed exceeds 300km / h, China Railway General Administration proposes to use CRTSIII ballastless track slab in roadbed and bridge, so the construction of high-speed railway is relatively close to the demand, and urban rail transit can also be applied. The total demand here only takes into account high-speed railway. China Economic Network reported that the overseas high-speed railway construction that domestic enterprises can participate in under the horn of Belt and Road Initiative is about 34600 km. Judging that the completion of construction in ten years will bring about 3460 km of construction volume each year, the superposition of domestic annual construction volume is about 2000 km, and the total demand construction mileage is close to 5500 km. According to the current construction situation, ballastless track plate consumables per km, reference company close to 8000 yuan / block The market space is close to 15.6 billion yuan. The company makes more efforts, not only in the production of products, but also self-built equipment, the application field is extended to urban rail transit, while operating information projects, we think that ballastless track will most likely become the next round of company growth engine. As the prestressed concrete steel main downstream railway and water conservancy are expected to maintain good solid investment growth under the PPP mode, we believe that the downward risk converges, while the ballastless track opens the company's upward elasticity. The company is a variety of high-profile railway construction around the world, which Belt and Road Initiative directly benefits from. We are firmly optimistic about the growth space of the company, covering for the first time and giving a "buy" rating. We expect 2017-2019EPS to be 0.36,0.47,0.60 yuan respectively.

Risk hint: the process of railway construction is not as expected; the promotion of track plate is not as expected.