January 15, 2019 Table of Contents

? Rail transit, railroad bottoming infrastructure, orders gradually pick up industry inflection point appeared (Pacific Securities)

? The market end demand has warmed up, the bottom of the blood products industry mild recovery (GF Securities)

? Policy-driven application of rapid landing, the Internet of Things industry into the fast lane (GZSC)

? Infrastructure power favorable construction machinery, national brands continue to increase market share (Soochow Securities)

? Intelligent energy platform steady growth, Shuangliang energy-saving flash business new highlights (Guolian Securities)

1. rail transit, railroad bottom infrastructure, orders gradually pick up the industry inflection point appeared (Pacific Securities)

In the fourth quarter of 2018, the Development and Reform Commission total **** approval of the key projects of 1.1 trillion yuan, the intensity of more than in 2017 since All quarters, and in the approved key projects, rail transit and railroad project investment amounted to 711.3 billion yuan and 429.3 billion yuan respectively, which is an important carrier of infrastructure stable growth. Pacific Securities pointed out that, in terms of region, the fourth quarter approved rail transit projects concentrated in provincial capitals, while 75% of the investment in railroad projects from the provinces of East China and South China, and the "Thirteenth Five-Year Plan" embodied in the East China and South China is the focus of the construction of railroads is basically consistent with the situation.

Recently, Shanghai Construction Engineering, Gezhouba disclosed the company's new orders in 2018. According to the calculation, Shanghai Construction Engineering in the second half of the building construction orders increased by 41.2% year-on-year, the growth rate is significantly higher than in the first half of 2018 (6.9% year-on-year growth); at the same time, Gezhouba in the fourth quarter of the total amount of domestic new contracts rose 52.8% year-on-year, the growth rate of the fourth quarter reversed negative to positive and rapidly rising. Pacific Securities believes that the two key companies order situation shows that in the second half of 2018, especially since the fourth quarter, with the infrastructure to make up for the short board tone of the determination and the end of the PPP clearance, the key companies new contracts quickly rebound, the industry inflection point gradually embodied.

In early January, China Railway Construction, China Chemical, Alcoa International, three central enterprises announced that they won the bidding for PPP projects with an investment of more than $10 billion, two of which are for highway construction, and one of which is for the comprehensive development of high and new tech zones. Pacific Securities believes that after the end of the clearance, PPP business model has gradually shown signs of warming up, the project landing rate steadily increased, but the market is still more concerned about the quality of PPP projects and the liabilities brought. First of all, as far as the three central enterprises signed contracts, the signed PPP projects have good cash flow support during the operation period, and secondly, when the key PPP company Dongfang Garden issued the first issue of corporate bonds in 2019, the term of the bonds was only two years and the right of resale was added at the end of the first year, and Pacific Securities believes that the above terms reflect investors' concerns about the quality of the company's PPP project cash flow and PPP investment The concern of increasing the company's liabilities. At the same time, it is also noted that the PPP individual project investment amount is gradually increasing, which will also benefit the leading enterprises with stronger capital strength.

Infrastructure plate, Pacific Securities recommended railroad construction leading tunnel shares (600820.SH), railroad leading and railroad construction leading enterprise China Railway (601390.SH); housing construction plate, Pacific Securities recommended market share stable increase in valuation of the construction industry leading China Construction (601668.SH) repair expectations.

2. Market end demand has warmed up, the bottom of the blood products industry moderate recovery (GF Securities)

GF Securities pointed out that the total amount of human blood albumin issued year-on-year growth of 12%, the proportion of imports has increased. According to the disclosure of the CIQ and local drug testing institutes, the total volume of domestic human albumin approved and issued (equivalent to 10g/vial) in 2018 was 47,039,300 vials, up 12% year-on-year, of which the volume of domestic human albumin approved and issued was 19,052,000 vials (up 7.4% year-on-year), and 27,987,300 vials of human albumin were imported (up 15.3% year-on-year), with the imported share increasing to 59.5%.The first quarter of 2018 was the low point of domestic human albumin batch issuance volume, and the batch issuance volume gradually rebounded in the latter three quarters, reflecting the market end-demand has picked up.

In 2018, the total volume of domestic human coagulation factor VIII was 1,591,700 bottles (equivalent to 200IU/vial), up 19.4% year-on-year, and it has maintained a rapid growth in recent years, in which Hualan Bio has ranked the first in terms of market share for many consecutive years. The total amount of fibrinogen approved and issued (equivalent to 0.5g/vial) was 889,500 vials, down 5.2% compared with the same period of the previous year, mainly due to the large decline in the year-on-year approval and issue of Shanghai Leshi; Boya Bio nearly doubled the amount of approved and issued throughout the year, and its market share was far ahead of other enterprises. The total volume of human prothrombinogen complex (PCC) approved and issued (equivalent to 200IU/vial) was 986,800 vials, basically the same as in previous years.

Immunoglobulin products batch issuance showed differentiation, the performance of wild immune bright. 2018 domestic static C to achieve the total number of batch issuance (equivalent to 2.5g/vial) 10.8304 million bottles, slightly lower than the same period in previous years. The concentration of static C market is high, of which Tiantan Bio, Taibang Bio, Shanghai Leslie, Hualan Bio market share is 25%, 15%, 12%, 10% respectively, located in the forefront of the domestic, and together occupy 62% of the domestic market share. According to the analysis of the financial reports of the listed companies, GF Securities found that the inventory pressure of serum C is relatively large in the segmented products of blood products. Among the special exempted products, the wild exempted products performed brilliantly, realizing the annual total volume of batch issue (equivalent to 200IU/bottle) of 7,937,500 bottles, up 60.3% year-on-year; B exempted products realized the annual total volume of batch issue of 1,821,900 bottles, up 27.4% year-on-year; the annual total volume of broken exempted products realized the annual total volume of batch issue (equivalent to 250IU/bottle) of 3,372,500 bottles, down 20.6% year-on-year. Human exempted from the annual realization of the total number of wholesale and issue (equivalent to 300mg/bottle) 639,900 bottles, compared with the same period of the previous year slipped significantly, a year-on-year decrease of 36%.

Guangfa Securities believes that, from the blood products related listed companies three quarterly report, the enterprise's blood products business income quarterly chain of steady improvement, net cash flow from operating activities than the substantial improvement in accounts receivable and notes and inventory gradually stabilized, indicating that the terminal needs and sales channels are gradually improving, so that the judgment of the blood products industry at the bottom of the mild recovery. We recommend focusing on Hualan Bio (002007.SZ) and Boya Bio (300294.SZ).

3. Policy-driven application of rapid landing, the Internet of Things industry into the fast lane (GSS Hang Seng)

GSS Hang Seng pointed out that the low-power wide area network is the fastest explosion of the number of connections in the next few years, and the local area of the Internet of Things is the largest number of connections in the field. In the future, in the 5G scenario, it will be able to support both high bandwidth and narrow bandwidth, low latency and high latency scenarios that are "polarized".

According to the "2018 China's Internet of Things Market Development Status Analysis and Development Trend Forecast for the Next Five Years" forecast, the global cellular connectivity compound growth rate of 24% from 2017 to 2022, 62% for LPWA, 18% for LAN, and the number of global Internet of Things (IoT) connections is close to 20 billion. Among them, China will become the world's largest IoT connectivity market (accounting for about 20% or more), and in 2022, the total number of IoT terminals in China is expected to reach 4.48 billion, with 300 million cellular IoTs (25%), 1.13 billion LPWAs (95%), and 3.05 billion LANs (29%). According to Techno Systems Research forecast, by 2020 global IoT communication module, 4G and NB-IoT module shipments continue to grow rapidly and gradually become mainstream, the two together will account for more than 50%.

The number of M2M connections in the public network is 31.8% from the target value at the end of the "13th Five-Year Plan" period, and the related applications will be promoted in the second half of the scale.

In January 2017, the Ministry of Industry and Information Technology released the "Information and Communications Industry Development Plan Internet of Things Subchapter (2016-2020)", which clearly points out that China's Internet of Things is accelerating into the "cross-border convergence, integrated innovation," the "Internet of Things" has become an important part of the global Internet of Things. "cross-border integration, integrated innovation and large-scale development" of the new stage. From the completion of the situation as of June 2018, GCSC expects the overall industry scale of China's Internet of Things to reach 1.2 trillion yuan in 2018, 80% from the end of the "Thirteenth Five-Year Plan" target value; the number of public network M2M connections*** counts 540 million, 80% from the end of the "Thirteenth Five-Year Plan" target value. "NB-IoT in the first half of the "13th Five-Year Plan" is in the network construction stage, the relevant applications will be in the second half of the scale to promote, is expected to show accelerated growth in the number of connections.

According to GCS, the IoT platform has become an important foundation for solving the fragmentation of IoT and improving its scale. According to the IoT whitepaper, device management platform (DMP): basically dominated by communication modules, communication equipment providers, currently forming Bosch BSI, DiGi, Nokia Impact, Sierra Wireless four mainstream DMP platforms, device management platforms are generally not provided separately, and more integrated with the end-to-end device management solutions. Connection Management Platform (CMP): Network management platform led by telecom equipment vendors, operators, the global formation of Cisco Jasper, Ericsson DCP, Vodafone GDSP three camps, two types of operating modes, one is represented by Jasper pure connectivity, i.e., the card management platform, is currently the largest, and the world's more than 100 carriers, 3,500 enterprise customers to carry out cooperation; The second is the connection management and core network bundling model represented by Ericsson DCP, which is significantly smaller than Jasper, and cooperates with more than 20 carriers and 1,500 enterprise customers around the world.

McKinsey categorizes IoT scenarios into nine categories, including factories, healthcare, external environments, worksites, vehicles, homes, human productivity, and offices. The maximum potential value of the nine applications can be as high as $11.1 trillion, and the average potential value is $7.4 trillion. IoT is expected to realize a CAGR of 25% to 50% in the next few years in such large segments as smart manufacturing, connected vehicles, public **** utilities, smart home, and wearable.

CSI Hengsheng highlights ZTE (000063.SZ), Fiberhome (600498.SZ), Optical Xunxun Technology (002281.SZ), Tongyu Communications (002792.SZ), Yilian Networks (300628.SZ), Gaoxin (300098.SZ).

4. Infrastructure power favorable construction machinery, national brand market share continued to improve (Soochow Securities)

Soochow Securities pointed out that in December 2018, excavator sales of 16,027 units, an increase of 14% year-on-year, an increase of 1%. Annual excavator sales of 203,420 units, far exceeding the 2011 annual sales of 178,352 units (the highest level in history), the fourth quarter of 2018 single-quarter excavator sales of more than 60,000 units (up 24% year-on-year) is also the highest level in history. According to grassroots research, in 2019, excavator sales may have a 10% to 20% decline, but small digging benefited from the rural labor shortage will continue to grow.

Since 2018, the year-on-year growth rate of excavator exports has remained above 70%, and exports are becoming a new growth point. Domestic manufacturers overseas layout for many years, superimposed on the "Belt and Road" along the engineering demand for excavator export pulling effect, Soochow Securities expects the future export sales still maintain high growth. Domestically, the eastern, central and western regions realized sales of 5,408, 4,441, 4,463 units, market share of 34%, 28%, 28% respectively, the east and central market share rose slightly, the western market share declined. In terms of tonnage sales analysis, the sales of small excavators, medium excavators and large excavators in December were 8,870 units, 4,980 units and 2,177 units, accounting for 55%, 31% and 14% respectively. Due to the 2017 sales growth rate in the large digging faster, higher base, the current sales growth in the large digging have slowed down, small digging strong momentum accounted for the continued expansion.

Soochow Securities believes that the downstream real estate investment growth rate slowed down slightly, the expected infrastructure power good construction machinery. real estate investment completion in November rose 9.3% year-on-year, January-November cumulative year-on-year rise of 9.7%; housing construction area in a single month year-on-year rise of 21.7%, January-November cumulative year-on-year rise of 16.8%, the growth rate of real estate investment has rebounded. 1-November Infrastructure investment rose 3.7% year-on-year on a cumulative basis. The recent policy relaxation, represented by transportation infrastructure infrastructure project approval significantly accelerated, infrastructure investment is expected to usher in a rebound.

In addition, environmental protection verification will accelerate the release of demand for renewal, national three switching national four standard is expected to promote the demand for renewal of early release, lengthening the boom cycle of the construction machinery industry. In addition, 1-November housing construction area cumulative year-on-year growth of 16.8%, and the growth rate of commercial real estate sales area (up 1.4%) to produce differentiation, it can be inferred that the developers in order to alleviate the pressure on the operation of the initiative to take the fast start, fast openings, fast return to the high turnover mode, Soochow Securities believes that this is the downstream demand continues to be one of the reasons for the strong.

Soochow Securities continues to recommend Sany Heavy Industry (600031.SH) and Hengli Hydraulics (601100.SH). It is recommended to pay attention to XCMG Machinery (000425.SZ), LiuGong (000528.SZ), China Lonking (3339.HK), Zoomlion (000157.SZ).

5. Intelligent energy platform steady growth, Shuangliang energy-saving flash business new highlights (Guolian Securities)

Shuangliang energy-saving (600481.SH) 1982 to bromine cooler to start, with the world's largest production base of bromine cooler, and then expand the heat exchanger horizontally, air-cooled, plus the size of the polysilicon reduction furnace, and gradually developed into the industrial field of energy-saving equipment. It has gradually developed into a system integrator of energy-saving equipment, water-saving equipment and new energy equipment for the industrial field. Guolian Securities believes that the future of the company will be rooted in the industrial sector, and vigorously expand the civil energy-saving market, from a single product manufacturing to the system integration and intelligent operation and maintenance business transformation, is committed to creating a leading comprehensive energy solutions provider.

The company's energy equipment is mainly bromine cooler, heat exchanger, air cooler and polysilicon reduction furnace. The bromine cooler has been gradually shifted from civil central air conditioning to industrial waste heat utilization, due to industrial energy consumption accounted for a large proportion of the recovery of industrial enterprises, the demand showed a resilient growth. The bromine cooler industry has a high degree of concentration, and the company has occupied a leading position in the industry. in 2018, Guolian Securities expects the bromine cooler to realize a revenue of 750 million yuan, a year-on-year growth of 30%. As for heat exchangers, its business has a wide range of downstream applications, with solid domestic demand, but more rapid export growth. At the same time, the company's air cooler business in the hands of a wealth of orders, water-saving effect is obvious, in the water scarcity of water areas is particularly applicable. Has the first domestic all-steel structure air cooling tower, leading technical strength, performance growth mainly from the release of orders. In addition, polysilicon reduction furnace currently has a high market share, polysilicon production rise driven by the output growth of the reduction furnace. Overall, energy equipment is rising steadily, and exports are the bright spot, according to the split forecast of Guolian Securities on the business, energy equipment is expected to realize revenue of 2.158 billion yuan in 2018, an increase of 36.66% year-on-year.

The company carries out the intelligent energy energy efficiency cloud platform business by setting up a wholly-owned grandson company Shuangliang Intelligent Energy, and also builds the Chaos Energy Efficiency Cloud Platform by joining hands with Aliyun, and keeps expanding to the public **** building energy efficiency business by adopting the mode of EMC, EPC or OC. Guolian Securities pointed out that the energy efficiency cloud developed by Intelligent Energy improves the energy saving effect through the functions of big data analysis, predictive reminder, remote monitoring, cloud backup, and remote expert diagnosis, and realizes O2O interconnection with energy-saving equipment, and real-time interaction with energy-saving equipment for real-time monitoring of energy consumption, energy plan management, energy load prediction and analysis, energy-saving tuning and control, and energy cost assessment and management, to achieve annual energy saving of 20%~35%. In addition, the company has more cases in the process of energy saving in public **** buildings, with obvious energy saving effect, short payback period and good economic benefits. In the future, the company will gradually realize the domestic leading comprehensive energy service provider through the continuous expansion of public **** building energy-saving business.

Guolian Securities expects the company 2018 ~ 2020 EPS were 0.15 yuan, 0.18 yuan, 0.21 yuan, corresponding to the PE were 23 times, 19 times, 16 times, in view of the company's energy equipment by the downstream industrial recovery and stable growth, the future of the public *** building energy-saving business is expected to be rapid volume, give "recommended "

Rating.