Opinions focus on investment suggestions. We downgraded Dinghan's technical rating from recommendation to neutral, and lowered the company's target price by 19% to 5.50 yuan. The reasons are as follows: A large amount of goodwill impairment was accrued in 2018. The performance of its subsidiary, Wuhu Dinghan, continued to decline in 2018, so the company estimates that the goodwill value will be reduced by about 600 million yuan. As of 3Q18, the original value of the company's book goodwill was 1.02 billion yuan. After this impairment, the net value of the remaining unimpaired portion was about 4.2 billion yuan, mainly due to the previous acquisitions of Guangzhou Dinghan and Qihui Electronics. At the same time, the company announced that it has signed strategic cooperation agreements with Guangzhou Metro and Guangzhou Rail Transit Fund. Future performance growth of its subsidiary Guangzhou CRRC is highly predictable; furthermore, businesses such as Qihui Electronic Smart Station are progressing smoothly, so the risk of impairment of goodwill for these two subsidiaries is limited. The profitability of the main business declined, and the performance fell short of expectations. After deducting impairment of goodwill and non-recurring profit and loss, the company expects net profit of the company to be only 18.84 million yuan to 23.84 million yuan in 2018, a year-on-year decrease of 68%-74%, which is lower than our previous expectations. We believe it is mainly due to losses in the company's cable and testing business, as well as increased one-time expenses due to increased financial expenses and internal integration. The business synergy of mergers and acquisitions of subsidiaries remains to be seen. There have been many mergers and acquisitions of the company since 2014. Major merger and acquisition subsidiaries include Wuhu Dinghan, Guangzhou Dinghan, SMA, and Qihui Electronics. The company is still in a period of integrating the operation and management of subsidiaries. Although the main business of the company's mergers and acquisitions is the rail transit business, it will be difficult to reflect the synergy between subsidiaries if the integration falls short of expectations. What is our biggest difference from the market? The rail transit industry will usher in a boom cycle in 2019-2020, but there is still a lot of uncertainty about the integration of various subsidiaries under Dinghan Technology. Potential catalysts: Financial expenses and internal consolidation led to lower performance than expected. Profit forecasts and valuations are due to impairment of the company's goodwill, and there is still a lot of uncertainty about future operations. We lowered the company's 2018e profit forecast from 0.20 to -1.03 yuan, lowered the 2019e profit forecast by 34% to 0.18 yuan, and introduced the 2020e profit forecast of 0.24 yuan. The company's current stock price corresponding to the 2019/20 P/E is 30.9x/23.3x. Considering that the company's business integration may fall short of expectations, we downgraded the rating to neutral, and lowered the company's target price by 19% to 5.50 yuan, corresponding to 30.6x the target P/E for 2019, which is basically the same as the current stock price. The risk further significantly impairs goodwill.