Key investment points: The integrated healthcare acquisition was accepted by the Securities Regulatory Commission. The company received the “Notice of Acceptance of the Administrative License Application from the China Securities Regulatory Commission” on September 3, 2014. The CSRC examined the company's “Approval for Issuance of Shares to Purchase Assets by Peking University Pharmaceutical Co., Ltd.” administrative license application materials, found that the application materials were complete and in accordance with the legal form, and decided to accept the administrative license application. A consumables distribution and service agreement was signed with Peking University People's Hospital, which won an annual bid amount of 88.88 million yuan. Beiyi Pharmaceutical, a wholly-owned subsidiary of the company's pharmaceutical distribution business, signed a “Long-term Service Agreement on Supply and Distribution of In Vitro Diagnostic Reagents and Consumables and Laboratory Process Optimization” with Peking University People's Hospital. (1) The agreement stipulates that Beijing Medical Pharmaceutical will supply and distribute in vitro diagnostic reagents and consumables to Peking University People's Hospital, including supply, storage, transportation, distribution and optimization services for hospital related departments. (2) Agreement amount: The total contract amount is RMB 88.88 million for the supply and distribution of in vitro diagnostic reagents and consumables for Peking University People's Hospital and the annual bid amount for laboratory process optimization projects. Supply chain business is combined with strong hospital resources, and integration is speeding up. (1) The company has built a complete industry chain layout for pharmaceuticals, pharmaceutical distribution, and medical services; among them, the pharmaceutical distribution/supply chain business plays an outstanding central role as a bridge and link between the three business sectors. The distribution and service agreement signed with Peking University People's Hospital marks the full launch of the company's pharmaceutical distribution/supply chain business and hospital business integration, and the acceleration of integration. (2) The company's intervention methods in the field of medical services are flexible. For-profit hospitals can be directly securitized and listed, and non-profit hospitals can obtain profits in the short term through supply chain business, etc. (3) The company relies on shareholders and is rich in hospital resources. Peking University Medical School has 8 top three hospitals (including Peking University People's Hospital) and 13 teaching hospitals. Peking University Medical has 5 hospitals including Peking University International Hospital, and our anticipated more than 30 ongoing hospital projects, plus the future “Peking University Oncology” specialist hospital network, all of which provide huge potential space for the company's future supply chain business expansion. It relies on shareholder resources to create a new generation of medical service leaders and maintain a rating of increased holdings. The company relies on the strong medical resources of shareholders Peking University, Peking University Fangzheng, and Peking University Medical Group to create a new generation of medical service leaders; as the group's hospital asset securitization platform, Peking University Pharmaceutical has a lot of room for future market capitalization and deserves long-term attention. We maintained the 14-16 EPS of 0.08 yuan, 0.10 yuan, and 0.13 yuan, a year-on-year increase of -35%, 18%, and 27%, corresponding to the predicted price-earnings ratio of 230 times, 195 times, and 154 times; if we consider integrated medical mergers and acquisitions, and in 2014 only the fourth quarter of the year, we maintained the 14-16 EPS of 0.09 yuan, 0.21 yuan, and 0.27 yuan, with year-on-year increases of -28%, 121%, and 31%, corresponding to the predicted price-earnings ratio of 208 times, 94 times, and 72 times; maintaining an increase rating.