It is deeply involved in rail transit, fully qualified, and the company with employee holdings tied to core employee interests is the first private enterprise in the country to successfully enter the Shanghai subway shield construction field. It has complete qualifications, can undertake projects in various fields such as municipal administration, rail transit, underground engineering, housing construction, etc., and has comprehensive construction capabilities above ground, ground, and underground. Rail transit is the company's core business. The company has now developed into a private rail transit leader and has a high market share in Shanghai. The company recently implemented an employee stock ownership plan to bind core employee interests and help stimulate employee vitality. By the end of December '18, the purchase of the company's employee shareholding plan had been completed, accounting for 4.41% of the company's share capital. Revenue performance grew steadily, with on-hand orders supporting the company's future revenue and performance growth. According to the company's performance report, the company expects revenue to increase by 20.7% and net profit to mother by 10.6% in 2018. The revenue growth rate has increased markedly, and the performance growth rate has declined slightly compared to the previous period. By industry, the construction business is growing rapidly, the real estate business has declined markedly due to the downward trend in the industry, and overall revenue is still growing rapidly. Compared with other construction companies, the company's accounts receivable turnover ratio has a clear advantage, and the cash flow situation is excellent. In terms of orders, the company undertook new construction orders of 13.2 billion yuan in 2018, a year-on-year decrease of 13%. If PPP orders were not taken into account, the number of new orders signed increased by 36%. Moreover, the company's order revenue has increased year by year in recent years, and sufficient on-hand orders will help support the company's future revenue and performance growth. The rail transit industry has great potential. Eastern Rail Transit Construction became a key infrastructure shortfall company accounting for about 46% of rail transit revenue in the first half of 2018, an increase of 9 pcts over 2017. The share of rail transit orders for the whole of '18 has reached 49%, and the importance of rail transit business to the company continues to increase. Furthermore, the gross margin of the rail transit business is high, and the gross profit contribution of the rail transit business reached more than 80% in the first half of '18. Recently, the Development and Reform Commission approved urban rail construction plans for various cities such as Shanghai and Hangzhou. Among them, the amount of rail transit investment in Shanghai/Jiangsu/Hangzhou reached 611.9 billion yuan. It is estimated that a large number of urban rail projects will enter the bidding period in East China in '19. The company has a certain market share in the Yangtze River Delta region, and intensive approval of rail transit plans will directly drive the company's order recovery in East China. It is expected that in 2019, a large number of urban rail projects will enter the bidding period in East China. As a private rail transit leader, the company is expected to benefit from the steady progress of rail transit plans in various regions. Profit forecasting and investment rating companies have a certain market share in the East China rail transit market. With the approval and implementation of local rail transit construction plans, the next few years will usher in high growth. The net profit for 18-20 is expected to be 3.00/3.90/449 million yuan, respectively. The company's business structure is about 27 times the average PE (TTM) of similar A-share construction private enterprises, while the company's current PE (TTM) is only 15.9 times that of the company's valuation. Moreover, the company's operations are more steady. Driven by the approval of rail transit plans in various regions, its performance will exceed expectations. It is reasonable to give the company a PE valuation of 16 times in 2019. Furthermore, we predict that the company's EPS in 2019 would be 0.35 yuan/share, which would correspond to a reasonable value of 5.6 yuan/share, covering the first time a “buy” rating. Risk warning: The growth rate of fixed asset investment and infrastructure investment is declining, infrastructure funding is not in place, the growth rate of new orders continues to decline, and the tight financing environment affects the company's cash flow.