This report is read as follows:

The company leads the market in the layout of fuel passenger cars, and there is room for upward valuation.

Main points of investment:

Maintain the "overweight" rating. According to the release of Shanghai fuel Cell Development Plan, the company is ahead of the market in the layout of fuel cell buses, and the market expectation of this part of the business is significantly improved. To maintain the company's 18-year EPS of 0.92 PE in 2017, with reference to the 18-year forecast of similar companies (11 times for Yutong bus and 23 times for Jinlong), and considering that the company's fuel cell passenger cars are already in operation, the company will be given 16.2 times PE for 18 years, raising the target price to 19 yuan (originally 17 yuan).

The company has used fuel cell technology on a large scale, and the technical route has been used for nearly 2 years, with technical advantages. On July 28, ZTO Express bus and Dayang Electric will set up a joint venture subsidiary to carry out research and development related to hydrogen fuel cells, with a total investment of 2.6 billion yuan and a total output value of 10 billion yuan.

New energy bus orders continue to land, highlighting the company's position in the industry, the advantage is expected to further spread to fuel vehicles. Since August 17, the company has successively obtained orders for new energy buses in Beijing, Qiqihar, Qingdao and other regions, with a total of nearly 1500 units, further improving its scale advantage.

Catalyst: the relevant policies have been further landed.

Risk hint: there is uncertainty in technology.