Matters: Shenzhou High Speed Rail issued an announcement. The company and China Railway Investment and Construction Group Co., Ltd. signed a “Strategic Cooperation Framework Agreement” in Beijing to jointly promote comprehensive cooperation in planning, investment, construction, operation and maintenance of the entire rail transit line. Comment: A strategic agreement was signed with China Construction Railway Investment to launch a full-life cycle business model for rail transit lines. China Construction Railway Investment is the primary platform for railway investment, construction and operation in Chinese construction, the main platform for investment and construction of urban rail transit, and an important platform for investment and construction of municipal roads, bridges and infrastructure. China Construction Railway Investment carries out investment, construction, and operation services in the fields of railways, urban rail transit, highways, municipal administration, airport construction and comprehensive river management, housing construction, and housing construction throughout the country. It has various special general contracting qualifications and first-class professional contracting qualifications such as railways, highways, municipal administration, housing construction, water conservancy, hydropower, bridges, tunnels, testing and testing, etc. The signing of this strategic cooperation framework agreement is a strong alliance. The two sides will exchange channels and share resources in the rail transit field. In particular, the two sides will strengthen business cooperation in PPP projects, maintenance services and operation management services for the entire line, promote the planning, investment, construction, operation, and maintenance life cycle business model of urban rail transit lines, and better meet and meet the rail transit needs of cities on the 3rd and 4th tier and below. China's urban rail transit market is booming. By the end of 2017, there is huge rail transit space in third- and fourth-tier cities. By the end of 2017, the number of cities operating rail transit reached 32, and the total rail transit mileage of the cities operating was over 4,500 kilometers. According to incomplete statistics, the number of new traffic mileage will reach 1206 km, 1,025 km, and 2,282 km in the next 3 years (2018-2020), and China's urban rail transit market is booming. Moreover, at present, urban rail transit investment is mainly in Tier 1 and 2 cities. In the future, along with the development of urbanization, traffic pressure in Tier 3 and 4 cities will become apparent year by year, and demand for rail transit will gradually be put on the agenda. Facing the demand for rail transit from a huge number of cities on the 3rd and 4th tier or below, there is an urgent need for specialized organizations with the ability to plan, construct, operate, and maintain the entire line. The company's strategic plan is to become an overall solution provider, core equipment provider and comprehensive service provider for rail transit operation and maintenance systems, create a profit model for the entire life cycle of the entire line, build a leading enterprise in the rail transit operation and maintenance industry, lay out the entire rail transit operation and maintenance industry chain through “industry+capital”, and build an “Internet+high-tech” complex data platform enterprise. The company's business scope covers all railway administrations, EMU maintenance bases, high-power locomotive maintenance bases, OEMs, locomotive sections, vehicle segments, power supply sections, EMU stations, and urban rail transit across the country, and has a clear advantage in the market pattern. The company previously announced that the investment fund will be used for the investment and construction of the Taizhou Railway S1 Phase I PPP project, marking the implementation of a profit model for the entire life cycle of rail transit lines. By participating in the investment and construction of the entire line of urban rail transit projects, this model provides operation, maintenance and maintenance equipment systems and operation management services for the entire industry chain, forming a rail transit construction model business pattern differentiated from large central enterprises such as the engineering construction industry and vehicle equipment industry, and has become a new pole in the rail transit industry. Profit forecast: The company is expected to achieve net profit of 717/9.32/1.65 billion in 2018-2020, corresponding EPS of 0.25/0.33/0.41 yuan, corresponding PE of 20/15/12 times, maintaining the “recommended” rating. Risk warning: rail transit investment is lower than expected, and project progress is lower than expected