The company announced its 2015 three-quarter report. In the first three quarters of 2015, the company achieved operating income of 994 million yuan, an increase of 31.12% over the previous year; the parent company's net profit of 78.86 million yuan, a year-on-year decrease of 19.91%; net profit after deduction of 59.21 million yuan, a decrease of 2% over the previous year; and EPS of 0.12 yuan. According to the quarterly situation, operating income for the third quarter was 366 million yuan, up 37.02% year on year; net profit was 18.59 million yuan, down 51.44% year on year; net profit after deduction of 10.5 million yuan, down 45.63% year on year. Main opinion 1. The platform structure is beginning to take shape, and fluctuations in investment returns affect performance expectations. Since 2013, we have noticed that the company's revenue side has maintained a rapid growth trend. As the leader in the domestic genetic diagnosis industry, revenue has maintained a growth rate of 25-30%, or even higher. However, net profit fluctuated quite sharply. In 2013, the company sold most of Anbiping's shares (FISH technology platform) and received huge investment income, with total investment income exceeding 80 million yuan; in 2014, the company replaced shares in its subsidiary Guangdong Dayuan with shares in Oasis Biochemical, and obtained investment income of 22.18 million yuan from this, and transferred Foshan Daan Medical, Foshan Dayi Biotech, and Taizhou Daan Medical. In addition, a number of new subsidiaries were established, generating a total investment income of more than 70 million yuan, of which the fourth quarter confirmed investment income Exceed 57 million yuan. The company has clearly proposed the function of an entrepreneurial platform in its previous regular financial report. Currently, the number of participating subsidiaries under the company has increased dramatically. By encouraging company employees to invest in the establishment of subsidiaries and listed companies to participate in the investment, it has an incentive effect on the company's executives and technical personnel. It is understandable, therefore, that while the company is maintaining stable and rapid growth on the revenue side, due to the sharp increase in the number of its participating subsidiaries, the adjustment of equity will inevitably affect the company's overall profit. 2. It is conducive to the long-term development of the company. The entrepreneurial platform built by the company is beginning to take shape. Future equity adjustments to participating subsidiaries will increase uncertainty about the company's performance expectations, but in the long run, we think the benefits outweigh the disadvantages. This year, Darui Biotech, a subsidiary of the company, was listed on the new third board. The company's performance has maintained rapid growth. Its main business is time-resolved fluorescence products for eugenics and nurturing, while continuously obtaining new product certificates in the field of chemiluminescence, including various reagent certificates for hepatitis B surface antigen, e-antigen, carcinoembryonic antigen, alpha-fetoprotein, and prostate-specific antigen. At present, the company has obtained more than 10 chemiluminescence product certificates, covering infectious diseases, tumors, and hormones. Although Dari Biotech's main business currently focuses on time-resolved fluorescence technology platforms, it is also likely to become a vital force in the field of chemiluminescence in the future. Taking Darui Biotech as an example, we judge that in the future, under the institutional arrangement of the company's startup platform, company executives may develop a number of excellent technology companies through years of accumulation on the frontline of the industry. They will enable Daan Gene to build a whole industry chain from the past with clinical genetic diagnosis as the core, and develop into an innovative platform company that touches on many new technology fields, which is conducive to long-term development. 3. The fixed increase plan shows confidence. The company resumed trading on October 14 and announced a fixed increase plan. This is the first financing since the company went public for more than 10 years. On the same day, we released the review report “Announcing a fixed increase plan and drastically increasing the construction of a genetic diagnosis technology platform”, which emphasizes our core views on this matter: First, financing at key points in the development of the industry. As a leader in the domestic genetic diagnosis industry, this financing is of great significance to both the company and the industry. Second, there is an increase in internal subscriptions for listed companies, executive and employee stock ownership plans, and real money participation in financing totaling 1.5 billion yuan. The lockdown period is 3 years, demonstrating firm confidence. Third, increase the construction of genetic diagnostic technology and R&D platforms to seize the core competitiveness of the IVD industry. The company's R&D investment has remained about 10% or more compared to previous years, built a technology platform that takes into account both depth and breadth, and consolidated the barriers to competition in the industry. Profit forecast and investment rating: Based on consideration of some fluctuations in the company's future investment income, for prudence, we adjusted the company's 2015-2017 EPS to 0.20 yuan, 0.24 yuan, and 0.30 yuan respectively (previously 0.26 yuan, 0.33 yuan, and 0.40 yuan), corresponding to the current stock price valuations of 278 times, 231 times, and 181 times. Based on our confidence in the industry and the company's position in the industry, we maintain a “highly recommended” rating and are firmly optimistic about the company's investment value for a long time. Risk Warning 1. Product development and marketing risks.