The company issued an announcement on the evening of August 1, 2016. The company received the “Approval on Approving Xinjiang Baihuacun Co., Ltd. to issue shares to Zhang Xiaoqing and others to purchase assets and raise supporting capital” from the Securities Regulatory Commission, approving the company's issuance of a total of 100,458,816 shares to specific targets to purchase related assets; approving the company's non-public offering of no more than 97,576,544 new shares to raise supporting capital for the asset purchase of this issue, the major asset restructuring was approved, enhancing market confidence. In March 2016, we launched the first in-depth company report in the market, “Baihuacun: Opening New Pharmaceutical Routes and Resuming the Sails of Revitalization”, which mentioned that “the company is optimistic about the future development prospects of the pharmaceutical industry and plans to place assets with weak profitability through major asset restructuring and inject high-quality pharmaceutical assets into Nanjing Warwick Pharmaceutical, kicking off the second transformation.” Market concerns indicate that in an environment where the Securities Regulatory Commission is increasingly strict about restructuring, there is a risk that the company's asset restructuring will not be approved. This major asset restructuring was approved, dispelling market concerns. The company placed the coal and other businesses with poor profitability and uncertain development prospects, and injected Warwick Pharmaceutical assets not only brought more than 100 million yuan in net profit assets to the listed company, but also realized the transformation of the main business of the listed company, which could fundamentally improve the company's business conditions. The development of the CRO industry is improving, and I am optimistic about the future development of Warwick Pharmaceuticals. Compared with mature foreign markets, China's CRO industry is characterized by a small base and rapid growth rate. The market size in 2013 reached 22 billion yuan, and the compound growth rate from 2006 to 2013 was 33%. In the past year, there have been frequent policies that favor the development of standards in the CRO industry: 1) Self-inspection of clinical trial data has become the norm, long-term favorable R&D enterprises, benefiting CRO companies; 2) Priority review and approval policies motivate enterprises to develop new drugs to seek greater profit margins, while the growth of the CRO industry is fundamental to the development of new drugs. Taking into account factors such as rising R&D costs and risk dispersion, the penetration rate of CRO will continue to increase; 3) The consistency evaluation of generic drugs has spawned 10 billion dollars of market space. The first batch of 292 chemical oral solid formulation base drugs needs to be completed by the end of 2018, with heavy tasks; 4) The transfer of pharmaceutical companies' R&D centers to domestic and multi-center clinical trials promotes the development of the CRO industry. We have long been optimistic about the development of the CRO industry. Warwick Pharmaceuticals focuses on pre-clinical research of new drugs. Since its establishment, it has developed nearly 250 pre-clinical projects, more than 70 Chinese invention patents, and 2 PCT international patents, creating a strict intellectual property bastion. The company has strong R&D capabilities and has a number of mature technology platforms, including chiral synthesis technology platforms, controlled sustained-release formulation technology platforms, and targeted drug delivery technology platforms. The company has established stable cooperative relationships with many well-known domestic and foreign enterprise groups and listed companies, and is highly recognized by the industry and customers. In 2013, 2014, and 2015, Warwick Pharmaceuticals achieved net profit after deduction of 16.404 million yuan, 36.132 million yuan, and 467.993 million yuan, respectively. The gross margin was stable at around 78%, and the company is in a period of rapid development. According to performance promises, the net profit achieved from 2016 to 2018 was not less than 100 million yuan, 123 million yuan, and 147 million yuan respectively, while the cumulative net profit for the above three years was not less than 370 million yuan, greatly improving Baihua Village's business conditions. The main risk risk faced by the rating is that Warwick Pharmaceutical's R&D failure, R&D results cannot be converted in a timely manner, and the overall CRO industry trend is improving, and Warwick Pharmaceutical's high growth. According to Warwick Pharma's performance commitment, it is expected that the 2016 EPS will be 0.28 yuan, maintaining the “buy” rating, and the corresponding target price will be adjusted from 22.4 yuan to 24 yuan