Incident: An overseas subsidiary company, XilongUSA, invested in Fulgent with its own capital of US$22.5647 million, and after completion, it took 15% of Fulgent's shares; invested 51 million yuan to establish Fujian Fujun Gene Technology Co., Ltd. with Shenzhen Fujin and Fujian Jinqiang Company, accounting for 51% of the shares. Fulgent has excellent qualifications and is a leading genetic sequencing company. The company mainly provides genetic diagnosis services (including sequencing, risk assessment, professional genetic counseling, etc.) to hospitals or scientific research institutions. Its advantages over other genetic sequencing and diagnosis companies are its authority (high recognition), large number of tests, wide coverage, and low cost. Fulgent has been certified by the US CLIA and CAP standards, and is the most highly qualified company in the world using next-generation sequencing technology for DNA sequencing and gene copy number analysis. Many of its core personnel are highly qualified (HanLingao is an industry leader and top expert in next-generation DNA sequencing technology), so it is highly recognized and developing rapidly in the market; Fulgent provides 4,637 single-gene tests and more than 170 multi-gene analysis and testing programs, mainly focusing on tumor genetic testing, and provides testing services for other rare diseases including hemophilia, lateral sclerosis, and brittle X The number of tests for chromosomes, childhood autism, etc. is in the leading position in the world, and its services also cover many countries and regions such as the United States, Canada, and Australia; Fulgent also has an advantage in terms of cost, reduces costs through independent research and development of analysis software and reagents, etc., and has improved price competitiveness. Fulgent's unaudited net profit in 2015 was US$4.213 million, which is at a relatively good level in the industry. Enter the field of genetic testing and promote strategic transformation. The company invested 15% of Fulgent's shares and funded the establishment of Fujian Fujun Genomics Co., Ltd., and entered the field of genetic testing. Genetic testing is the foundation of precision medicine. It can not only track infectious disease pathways, but also predict individualized disease risks, and effectively predict various diseases such as cancer, diabetes, and Down syndrome. It has broad development space (the market space for tumor genetic testing is at the level of 10 billion US dollars). By establishing a domestic genetic company, the company can introduce Gentle technology into the country and promote the company's business transformation. At the same time, the company has formed a collaboration with the existing in vitro diagnostic reagent business. On the one hand, the genetic testing business can be expanded through diagnostic reagent channels, and on the other hand, it is also further expanding the company's product line in the field of in vitro diagnostic reagents, enhancing the company's competitiveness in the field of in vitro diagnostic reagents. Valuation Rating: The company is a leading domestic chemical formulation enterprise, continuously optimizing the product structure and continuously improving profitability. The epitaxial approach has entered the blue ocean of the in vitro diagnosis industry, while laying out medical devices, developing e-commerce platforms, and entering the field of genetic testing to promote transformation. The long-term development is promising. It is estimated that in 15-17 EPS will be 0.49, 0.69, 0.90 yuan, PE will be 63, 44, 34 times, maintaining the purchase rating. Risk warning: Genetic sequencing services are progressing faster than expected, and e-commerce platforms are developing less than expected.