Investment Highlights The company released its 2015 annual report and its report for the first quarter of 2016: The company achieved operating income of 336 million yuan in 2015, an increase of 8.62% over the previous year, and achieved net profit attributable to shareholders of listed companies of 42.9095 million yuan, an increase of 6.44% over the previous year, and basic earnings per share of 0.27 yuan, a decrease of 20.59% over the previous year. The profit distribution plan is to distribute a cash dividend of 0.50 yuan (tax included) for every 10 shares. In the first quarter of 2016, the company achieved operating income of 62.996 million yuan, a year-on-year increase of 26.21%, and achieved net profit attributable to shareholders of listed companies of 5.4859 million yuan, an increase of 31.13% year-on-year, and basic earnings per share of 0.0343 yuan, a year-on-year decrease of 34.42%. The main business grew steadily: the company's market share in the subway and tunnel ventilation sector ranked first in China. In 2015, the company's subway products accounted for 67.36% of revenue, which was the main source of the company's revenue growth. Due to the special application areas of the company's products, the company's revenue growth rate is highly correlated with China's subway and tunnel construction. As China's economy shifts and grows, infrastructure construction such as subways will maintain steady growth as an important bargaining chip for stabilizing the country's economy. In the full year of 2015 and the first quarter of 2016, the company's revenue increased by 8.62% and 26.21%, respectively, and the momentum was good. Large accounts receivable dragged down performance: As of the end of March 2016, the company's accounts receivable balance was about 468 million yuan, accounting for 58% and 85% of the company's total assets and net assets respectively; although the risk of actual bad debts was low, it greatly dragged down the company's performance; the company prepared 26.12 million yuan for bad debts in 2015, accounting for 60% of net profit, and also caused poor cash flow performance from the company's operating activities. Profit forecast and investment suggestions: The company is a leading enterprise in the domestic subway and tunnel ventilation sector, and will fully benefit from the rapid growth of the industry in the future. We expect the company's EPS from 2016 to 2018 will be 0.39 yuan, 0.53 yuan, and 0.73 yuan respectively, giving it an “increase in weight” rating. Risk warning: risk of bad debts in accounts receivable; subway construction progress is lower than expected.