Investment advice. It was covered for the first time, and a “accumulation of holdings” rating was given. We are optimistic that the company will enter the medical and environmental protection markets through epitaxial expansion. We expect the company's revenue in 2016-2018 to reach 459 million yuan, 620 million yuan and 797 million yuan respectively, with net profit of 77 million yuan, 0.95 yuan and 123 million yuan respectively, corresponding to EPS of 0.17 yuan, 0.21 yuan and 0.27 yuan, with a target price of 16.54 yuan. Enter the 10-billion-level medical and environmental protection markets. ① Medical market: The equipment market is about 35.9 billion yuan; the company's MALDI-TOF-MS medical monitoring products have entered the small-batch trial production stage and participated in the A round of financing for Kangshande, an Internet medical startup. ② Environmental protection market: The market size of soil monitoring equipment is expected to reach 32 billion yuan, and the incremental market for water quality monitoring equipment driven by the “13th Five-Year Plan” for the establishment of a national surface water environment quality monitoring network is expected to reach 4.1 billion yuan; at present, the company has formed a complete gas, water, and soil monitoring product line, and has further obtained industrial resources through the acquisition of Tianrui Environmental. We have a strong base, and our historical expansion has been recognized by the market, and we look forward to the company's extended growth. ① The company has cash of 700 million yuan on hand, and the IPO overfunded balance is 500 million yuan; and the balance ratio is low (13.52%). ② The company plans to acquire 100% of Basie Biotech's shares and 40% of National Testing's shares. The price is reasonable. The underlying assets are involved in the medical and environmental protection fields, and have a synergistic effect with the company's external layout. The company has personnel and technical advantages. ① The company's core management team has been stable for a long time, and the implementation of the employee stock ownership plan binds the interests of core technical personnel, which is conducive to the accumulation of sales and R&D teams. ② The company relies on university resources and attaches importance to investment in scientific research, and R&D investment has always maintained a level of at least 10% of revenue. risk factors. There is still uncertainty about qualification approval; the upstream industry has a weak cycle.