Guide to this report: Distortions in pricing for different types of goods in China's railway freight and bottlenecks in the turnover rate of railway containers have inhibited the long-term return of the special box business. Fortunately, the company's Shaba Line business, which expanded production in the early years, provided support for profit. Investment points: 1. First coverage, rating “neutral”. Tielong Logistics' passenger transport business gradually expired and exited, and the Shaba Railway and special container business became core business. The Shaba Railway is cyclical in the transportation of bulk goods, and is currently at a high cycle level. The profit of the special box business continues to grow, but is limited by freight pricing policies and turnover rate bottlenecks, and its contribution to long-term shareholder returns is limited. The predicted EPS for 2019-21 is 0.37/0.38/0.40 yuan. According to the average valuation of 15 times PE and 1.3 times PB in 2019, the target price is 5.77 yuan, and the rating is “neutral”. 2. The special container business has long been hampered by railway freight pricing policies and turnover bottlenecks. Compared with coal railway transportation, special container rail transportation demand is unidirectional and seasonal, and the turnover rate is low, and higher freight rates are needed to make up for it. However, railway container freight rates do not reflect differences in turnover rates. Pricing and turnover rate restrictions make it difficult for the company's management to work hard in this business, which is difficult to translate into higher shareholder returns. 3. The Shaba Railway has become a core business that contributes to shareholder returns, providing profit support on a cyclical basis. In 2005, the company acquired the 14.17 km Shaba Railway, the only railway dredging channel in Yingkou Port, and carried out two expansions, with a total investment of 540 million yuan. Over the past 14 years, we have reaped 5 times the return on investment. The business is affected by macroeconomics and the commodity demand cycle, and its cyclical properties are remarkable. Currently, it has rebounded significantly from the 2016 cycle trough. In 2019, the business will still benefit from transit rail, but it will still be cyclical in the long term due to the influence of commodities. 4. The scale growth of the processing trade business is limited; the core is risk control. With the implementation of supply-side reforms in 2016-17, the scale of the company's processing trade business has expanded, accounting for 17% of gross profit. The profit margin of the trading business is low and needs to be driven by working capital. The company's annual report clearly states that business risks will be controlled, and the scale of this business is expected to maintain a slow growth rate. 5. risk factors. Demand for special boxes fell short of expectations; macroeconomic fluctuations; bad debts in the trading business.