Report Summary: Rail traffic is trending, and the traditional business market is on the rise. The company focuses on the development and sales of ventilation system equipment such as fans in subways, tunnels, nuclear power, civil and industrial fields. In the first half of 2017, subway revenue was 56.4224 million yuan, accounting for 35.83%; civil and industrial revenue was 56.6518 million yuan, accounting for 35.98%; and revenue in the nuclear power sector was 27.2977 million yuan, accounting for 17.34%. Rail transit had a market share of more than 50%, making it difficult to shake its dominant position. During the “13th Five-Year Plan” period, China's completed urban rail transit investment amount will reach 2.85 trillion yuan. The next three years will be a concentrated period for construction completion. Demand for subway ventilation systems is strong, and the company may usher in explosive opportunities. Acquire high-end equipment companies to begin the path of transformation. The ventilation equipment of Jindun Co., Ltd. is widely used in the naval and military fields, and is qualified to supply ventilation equipment for large ships such as aircraft carriers to the General Equipment Department. The two acquired companies, Hongxiang Technology and Zhongqiang Technology, respectively specialize in infrared and ultraviolet imaging products and stealth technology products. Technically, they complement each other, and will promote the diversified development of the company's products and optimize the industrial layout. Nuclear power fan orders+military asset injection, profit improvement is worth looking forward to. Currently, there are very few domestic enterprises with nuclear power fan qualifications. The company focuses on expanding and laying out the field of nuclear power fans. Under the general environment of advancing nuclear power approval and nuclear power restarting, it will be the first to benefit. Relying on its technology and market advantages, it is expected to receive orders for nuclear power fans from Guangzhou Nuclear Power, China Nuclear Power, and Sanmen. The nuclear power business will become the main increase in the company's fan business. At the same time, the controlling shareholders of Hongxiang Technology promised to achieve deducted non-profit of no less than 75 million, 93.75 million, and 117 million yuan in 2017-2019, with a compound annual growth rate of 32%; the controlling shareholders of Zhongqiang Technology promised to deduct non-net profit of no less than 70 million, 94.5 million, and 128 million yuan in 2017-2019, with a compound annual growth rate of 49%. After the restructuring is completed, the company's profit level will improve markedly and gradually become a “high-end equipment manufacturer for military and civilian integration.” Investment recommendations and ratings: Regardless of the impact of this acquisition, the net profit of the company's main business in 2017-2019 was 51 million, 65 million, and 73 million yuan, corresponding to EPS of 0.32 yuan, 0.41 yuan, and 0.46 yuan, and PE 120 times, 94 times, and 84 times. If this merger and acquisition is considered, according to the gambling agreement and performance growth rate estimates, it is expected that the performance promises will be exceeded in the future. The net profit for 2017-2019 is estimated to be 200 million, 350 million, and 4.1 billion, giving it a “buy” rating. Risk warning: rail transit ventilation business development falls short of expectations, military business development falls short of expectations