Deeply involved in the rail transit market, and urban rail orders are growing rapidly: The company is a regional leader in the rail transit construction industry. It is the first private enterprise in the country to successfully enter the Shanghai subway shield construction field. It also has comprehensive ground, ground and underground municipal engineering construction capabilities. The business is mainly construction and municipal infrastructure investment business, accounting for 84.51% of revenue in 2017. The real estate business became the company's second main business in 2008. In 2016, revenue accounted for nearly 40%, and in 2017, its share declined to 13.63%. The total amount of new construction orders signed in 2018 reached 13.2 billion yuan, of which 5.715 billion yuan was for rail transit orders, accounting for 43.30%, which is the main driving force behind the increase in the company's orders. The Development and Reform Commission has intensively approved rail transit projects, and the growth rate of the industry is expected to increase: in the past 8 years, the operating mileage of the subway has increased from 1,167 kilometers to 3881 kilometers, an increase of more than 200%. The scale of subway construction under construction in 2017 was huge, exceeding 5,000 kilometers, and the potential for rail transit construction is huge. Since 2018, the Development and Reform Commission has approved 7 subway construction plans, with a total investment of 704.422 billion yuan, accounting for 49% of the total approval amount for the whole year. It is expected that investment in rail projects will be implemented rapidly within the next 2-3 years. In a context where infrastructure has recently begun to pick up, urban rail construction is worth paying attention to. Judging from the 13th Five-Year Plan data, investment in urban rail transit is the largest investment in the transportation sector in all provinces other than highways and railways. In 2015-2020, it will expand from 3,300 kilometers to 6,000 kilometers. Among them, the planned subway mileage in East China and South China reached 2,411 kilometers, accounting for about 60% of the total planned mileage of all provinces in the country. This is quite in line with the company's business location structure (East China accounted for 68.23% in 2017, South China accounted for 10.71%). Regional advantages are conducive to the company's receipt of orders and will greatly help future development. The net profit growth rate is stable, and the balance ratio is declining: the company's revenue fluctuated and increased, and the growth rate reached 15.51% in the first three quarters of 2018. Affected by the transformation, gross margin fell to an all-time low of 7.26%, but net margin benefited from a reduction in the period expense ratio, which has increased by 0.9% to 3.51% since 2016. The company's debt ratio has declined markedly in the last three years, from a high of 81.64% to 76.81%. As of Q3 2018, the balance ratio had rebounded by 0.62%. Investment suggestions: The rail transit industry's spatial growth rate is accelerating. Recently, the Development and Reform Commission approved 7 subway construction plans, with a total investment of 704.422 billion yuan. Benefiting from the rapid progress of rail transit projects in East China and South China, we expect EPS in 2018-2020 to be 0.28, 0.32, and 0.37 yuan, respectively, and corresponding PE of 14.4, 12.6 times and 10.9 times, covering the first time, giving it a “Highly Recommended - A” rating. Risk warning: inadequate implementation of infrastructure investment; medium- to long-term capital cost control and recovery risks.