Main opinion: Cooperation with Ali marks a new expansion of the company's development strategy. The company announced that on July 11, 2014, the company signed cooperation agreements with CNOOC Container Transport Co., Ltd. (“CNOOC”) and Alibaba (China) Network Technology Co., Ltd. (“Ali”), focusing on building the world's leading e-commerce integrated logistics information service platform. The company said that in line with the principles of innovation, development and service for small and medium-sized enterprises, all parties will jointly explore a comprehensive e-commerce logistics service platform and cooperate to build a logistics service network with full container shipping and international logistics transportation services as the main body. In the project cooperation, a comprehensive service platform for international shipping will be built. Among them, customers from China and Alibaba can use the platform to check logistics freight rates online, complete logistics orders online, online consultation, online settlement, and online tracking of goods status. According to the company's development plan, in the next three years, while maintaining the steady development of the integrated business of intelligent transportation systems, the company will actively implement a value-oriented strategy for transportation and shipping informatization, and a strategy for vertical expansion of the intelligent transportation business chain and horizontal expansion of the industrial automation business. This cooperation between the company and various parties in the field of shipping informatization is another major strategic development after the company and China Shipping, the actual controller, signed the “China Shipping (Group) Corporation Phase I Development and Implementation Service Contract” in 2013. The company's traditional business is a highway intelligent transportation system integration business. Although there are trends that are conducive to the company's traditional business, such as urbanization, new developments in intelligent transportation industry technology, the Ministry of Transportation's active promotion of the national highway electronic toll (ETC) network, and the company's softwareization and BT model to increase the company's gross margin, the pattern will be more concentrated in the maritime logistics and informatization markets compared to the very scattered market pattern of integrated highway transportation systems. Moreover, the company also has important resource advantages from shareholders and other related parties. Therefore, the future market value of the shipping informatization business that the company is actively expanding may be higher than the company's traditional highway system integration business. Furthermore, from Ali's point of view, Ali is striving to build a logistics service network with full container shipping international logistics and transportation services as the main body. In addition to choosing CNOOC Transport, its partners have also chosen CNOOC Technology, which has just been involved in the field of maritime transport informatization. We believe that the future cooperation between China Sea Technology and China Sea Technology may not be limited to the field of maritime transport informatization. CNOOC is one of the first leading enterprises in China to enter the field of intelligent transportation systems, and Ali has recently continued to expand in the fields of intelligent vehicles and transportation informatization, so there may still be more room for cooperation between Ali and CNOOC in the future. Investment advice: Transportation and shipping informatization and technical services are a key entry point for the company to actively seek strategic expansion and leaps forward, relying on the new expansion of China Shipping Group. At the same time, the company claims that this transaction is a framework cooperation agreement, and the transaction price has not yet been agreed upon. All parties still need to further discuss the revenue sharing of integrated logistics information service platforms. This cooperation is not expected to have a significant impact on the company's financial situation or operating results in 2014. In 2014-2016, the company is expected to achieve a year-on-year increase in operating income of 10.28%, 12.64% and 13.84%, respectively; a year-on-year increase in net profit attributable to owners of the parent company of 11.35%, 20.54%, and 25.58%, respectively; and earnings per share (diluted according to the latest share capital) of 0.26 yuan, 0.31 yuan, and 0.39 yuan, respectively. Therefore, the company's investment rating for the next six months was raised to “increased holdings.” At the same time, note that the southwest market accounts for 77.97% of the company's main business revenue, so there is a risk that it depends too much on the single market.