(1) leaders of rail transit door system

The processing of Longxin science and technology has been completed, and the company still takes the rail crossing system as its main business. The company's 2019H1 realized revenue of 1.819 billion yuan, deducting 42 million of Longxin Technology's revenue, and the remaining 1.777 billion was the company's main business income, of which 79.10% was rail traffic business, 10.92% was new energy business, and 10.07% was other business. In rail transit revenue, 90% is door system, 10% is rail maintenance business and accessories revenue; about 70% of door system revenue is urban rail door system, and about 30% is bullet train assembly door system; new energy business is mainly new energy automobile parts products, including charging interface wire harness assembly, high voltage distribution system (in the car) and new energy bus door system; other businesses include traditional connectors and other business.

The leader of the rail crossing system. The company door system is mainly divided into urban rail door system (including urban rail vehicle internal and external doors, station screen doors / safety doors, station gate doors, etc.), EMU door system (including EMU inner and outer doors, etc.). The company's market share of door system in various fields is in the leading position in China, the market share of urban rail vehicle door system is more than 50%, and the market share of shielded doors in urban rail stations is about 30%. The market share of the gate door system of the urban rail station is about 10% (the main market is occupied by foreign capital), the outer door system of the bullet train is more than 50%, and the market share of the inner door system of the bullet train is more than 70%.

(2) there is room for continuous growth in the door system.

The urban rail gate system benefits from the high scenery and bearing of urban rail construction. According to the statistics of the prospective Research Institute, 2020-2022 will be the peak of urban rail transit. From 2020 to 2022, the new mileage of urban rail transit will be 1152.6 km, 1438 km and 2087.4 km respectively, with year-on-year growth rates of 18%, 24% and 45%, respectively. ① due to the continuous narrowing of the departure gap, the density of operating vehicles per kilometer of urban rail is gradually increasing. Taking into account the increase in operating mileage and density, it is estimated that the number of new urban rail transit vehicles from 2020 to 2022 is 7563, 9560 and 12732 respectively, an increase of 32%, 26% and 33% respectively over the same period last year, and the market space of the corresponding urban rail vehicle door system is 23.82,30.11 and 4.011 billion yuan respectively. ② estimates that the market space of screen doors / safety doors of urban rail stations from 2020 to 2022 is 19.77,24.65 and 3.578 billion yuan respectively, and the company's market share of screen doors is about 30%. ③ estimates that the market space of gate doors of urban rail stations from 2020 to 2022 is 4.61,5.75 and 835 million yuan respectively. The market space of the urban rail gate system corresponding to 2020 ①②③ 2022 is 48.20,60.52 and 8.423 billion yuan respectively.

The EMU door system benefits from the increase of mileage and the arrival of EMU level 4 and level 5 repairs. According to the construction plan of the existing high-speed rail project, in terms of the new mileage market, it is estimated that the number of new cars will be 3919, 2254 and 2407 respectively from 2020 to 2022. In terms of level 4 and level 5 repairs of EMU, it is estimated that the number of vehicles requiring grade 4-5 repairs in 2020-2022 is 4173, 4998 and 7633, considering that the unit price of the new vehicle door system is 204,000 yuan per vehicle, and the unit price of the fourth and fifth class repair from 2020 to 2022 is equal to that of the company's new door system. It is estimated that the market space of the new mileage corresponding door system from 2020 to 2022 is 8,4.6 and 491 million yuan respectively. The market space of the corresponding door system in the fourth and fifth grade repair market is 8.51,10.2 and 1.057 billion yuan respectively.

From 2020 to 2022, the market space of the new high-speed railway door system and the fourth or fifth grade repair are 16.51,14.79 and 2.048 billion yuan respectively.

To sum up, the space of rail crossing system corresponding to urban rail and high-speed railway from 2020 to 2022 is 65.7,75.3 and 10.47 billion yuan respectively, which continues to grow.

In addition, (1) the new energy bus door system is a new business of the company and has more room for development. In 2020, the new energy bus door system of the company has formed a certain scale sale. at present, the new energy bus door is mainly pneumatic door, and the new energy bus door system produced by the company is electric plug door, which has low permeability. now the doors of airport ferry cars and logistics vehicles begin to use electric plug doors, and the permeability of electric plug doors is expected to increase gradually. it is conservatively estimated that the sales of new energy buses from 2019 to 2022 are 96000. If calculated according to the permeability of 100%, it can be estimated that the space of the plug door system of the new energy bus from 2020 to 2022 is 2.706 billion yuan, 2.706 billion yuan and 2.706 billion yuan. It is expected that with the gradual increase of the permeability of the electric plug door, it will bring new growth space for the company. (2) there is room for expansion overseas. In 2018, the company's overseas income accounted for 5%, obtained the qualification of high-speed door maintenance and mass delivery, completed the maintenance of the French Le Haft overseas project, and successfully expanded the overseas maintenance market. Making use of the advantages of brand and technology, it is expected that the overseas business of the company's door system will continue to grow.

(3) Investment suggestions: the company's revenue from 2019 to 2021 is expected to be 3320.78 yuan, 3777.55 yuan and 4317.38 yuan respectively, an increase of 2.83%, 13.82% and 14.35% respectively over the same period last year, with a net profit of 632,431,531 million yuan. The substantial increase in net profit in 2019 is mainly due to the net income of about 250 million yuan generated by the divestiture of Longxin Technology. Give a rating of "overweight".

(4) risk hints: railway investment is not as expected; urban rail investment is not as expected.