Incident: The company issued an announcement on October 17 stating that its wholly-owned subsidiary Guangdong Shangrong Engineering General Contracting Co., Ltd. and Shenzhen Zhongtai Huahan Architectural Design Co., Ltd. (consortium), a holding subsidiary of the company, won the bid for the Lanzhou New Area Traditional Chinese Medicine Hospital construction project, with a bid amount of 369 million yuan. The exact amount is subject to the final signed contract. Comment: The total number of projects in Lanzhou reached 2.5 billion dollars, which will have a positive impact on performance in the next few years. In the first half of this year, the company signed a strategic cooperation framework agreement with the Lanzhou New Area Management Committee. The company is responsible for preparing the overall plan for setting up health institutions in the Lanzhou New Area, the renovation and expansion of the New District People's Hospital, the New District Hospital for Traditional Chinese Medicine, the New District Emergency Center, and the overall construction of the New District Disease Prevention and Control Center and the New Area Maternal and Child Health Hospital. The total investment of the project is about 2 to 2.5 billion yuan, and it is expected to be completed in 5 years. The project framework calculation (based on 2.5 billion dollars) accounts for more than 30% of the company's 2015 audited operating income. The winning bid for the Lanzhou New Area Traditional Chinese Medicine Hospital construction project shows that the preliminary implementation of the entire Lanzhou public health project is progressing smoothly, which will have a positive impact on the company's business performance in the next few years. The entry threshold for the credit buying business is high, and the company's industrial advantage is obvious. The current Lanzhou New Area Traditional Chinese Medicine Hospital construction project will adopt a buyer credit model. Under normal circumstances, 70% of the project construction capital is funded by the company and the buyer's syndicated credit financing line is provided by the company. The company provides guarantees for this buyer's credit business, and the local government or hospital only needs to contribute 30%, greatly reducing the local financial burden. Buyer credit is the company's starting business. It has accumulated nearly 20 years of industry experience, and its entry threshold is high. Because it involves guarantees and offsite loans, banks require a high level of asset structure for listed companies (the debt ratio must not be too high, the capital scale must not be too small), and it is difficult to gain the trust of banks without a long-term cooperative relationship, so many enterprises involved in hospital construction projects are unable to carry out credit buying business. In addition, banks also have high qualification requirements for partner enterprises, and the company's complete qualifications can provide customers with overall solutions from initial planning, design, construction, and support to final turnkey, yet most enterprises in the market can only do one of these medical projects. Therefore, the company has a clear advantage in carrying out credit buying business. The implementation of the company's projects has accelerated, and the certainty of growth is high. The company currently has orders of 4.628 billion dollars (excluding PPP projects), and the amount of projects in the later stages (including audit and settlement stage, completion and acceptance stage, mechanical and electrical installation stages, etc.) has reached 1.46 billion; furthermore, in 15/16, there were many projects started, so performance release is expected, and performance is expected to increase by more than 40% in 2016. Profit forecast and valuation: According to the company's current business situation, we estimate that the company's EPS for 16-18 was 0.45, 0.68, and 0.93 yuan, respectively, corresponding to 52/34/25 times PE. Considering that the company's hospital PPP orders are sufficient and implementation is accelerated, the valuation is 34 times higher than in '17, and it is highly recommended. Risk warning: National PPP policy changes; contract execution time and ratio are lower than expected.