Overview of the incident: Huihuang Technology released its 2016 semi-annual report. During the reporting period, it achieved total revenue of 206 million yuan, an increase of 11.73% over the previous year; net profit attributable to owners of the parent company was 388.11,900 yuan, an increase of 25.12% over the previous year; net profit after deduction was 368.23,800 yuan, an increase of 24.35% over the previous year. Net profit for January-September is expected to increase by 30%-60% year on year. Analysis and judgment: The main business revenue increased steadily: During the reporting period, the company's main business revenue in the railway signal communication industry was 194 million yuan, an increase of 14.55% over the previous year. Among them, the revenue of signal control products, production command and transportation scheduling informatization products, and power supply equipment achieved rapid growth, with growth rates of 1,006.89%, 193.74%, and 86.02%, respectively. The company adheres to the development strategy of “product transformation from a single product supplier to system integrator and operation service provider, and from extensive management to intensive management”, and profits from various businesses are progressing steadily. Continued benefits from investment in railway infrastructure: in 2015, the country's railway operating mileage reached 121,000 kilometers, ranking second in the world, and the operating mileage of high-speed rail exceeded 19,000 kilometers, ranking first in the world. The recently released “Medium- to Long-Term Railway Network Plan” requires the scale of the railway network to reach 150,000 kilometers by 2020 and 175,000 kilometers by 2025. In 2016, railways will maintain the scale of construction investment, with fixed asset investment reaching 80 billion yuan, urban rail transit investment will reach 350 billion yuan; railway investment will reach 3.5 trillion yuan during the 13th Five-Year Plan period, and urban rail investment will reach 175 million yuan. The company's railway and urban rail transit information products will continue to benefit from continuous and stable high-level investment. The fixed increase plan was adjusted, and the total capital raised by the company's non-public offering was adjusted from no more than 1.02 billion yuan to no more than 82 billion yuan, the “supplementary working capital” of the fund-raising project was abolished, and 800 million yuan of capital raised was invested in the transportation WiFi R&D center construction project after deducting issuance expenses, specifically including the purchase of real estate, R&D equipment and software, and upgrading experience centers. The company will use the R&D center as the fulcrum to build a transportation WiFi industry ecosystem for railways, civil aviation, and highways. Feitian United, Safer Technology, Colorful Access, and Smart Map Technology, etc. in which the company is a shareholder have initially entered transportation WiFi to achieve collaborative development of resources. In 2015, China's railway passenger traffic reached 2.5 billion, and civil aviation passenger traffic reached 440 million. At the same time, the number of netizens continued to grow. The average number of Internet users was 3.8 hours a day. Work, communication, and entertainment are all inseparable from the Internet. Traffic WiFi coverage from scratch will effectively fill this huge market demand. Profit forecast and investment advice: The company is a leading rail transit monitoring and control enterprise in China, and its old and new businesses have long-term growth prospects. The 2016-2018 EPS forecasts are: 0.30, 0.38, and 0.48 yuan, respectively, maintaining the “increase in holdings” rating. Risk indicates that the progress of the new business falls short of expectations, market risk, and policy risk.