The company announced on December 16 that it had signed the “Lanzhou New Area Hospital of Traditional Chinese Medicine Construction Project Financing and Construction Contract” and the “Shaanxi Ningchengcheng County Hospital Overall Relocation Project Financing and Construction Contract”. The total project investment was 457 million yuan and 600 million yuan, respectively, and the construction period was 24 months and 36 months, respectively. The company's credit purchase model helps achieve a win-win situation between the government and the enterprise. The current Lanzhou New Area Hospital of Traditional Chinese Medicine construction project is part of a strategic cooperation framework agreement signed between the company and the Lanzhou New Area Management Committee. The first phase of construction is divided into two phases: the first phase of the Lanzhou New Area Traditional Chinese Medicine Hospital is built according to the three-level standard, and the second phase includes rehabilitation buildings and staff dormitories. The total investment amount is 457 million yuan, and the project payment is made according to the progress of the project. Chengcheng County Hospital is the earliest, largest, and most fully functional grade II public hospital in Chengcheng County. It is operating well. The total investment amount for the overall relocation project is 600 million yuan, and payments are made according to the progress of the project. Both of the above projects are carried out using a financing agency model (that is, a credit purchase model). The company is responsible for raising 70-80% of the project construction capital by providing the buyer's syndicated credit line financing, and the company's pledge guarantee does not exceed 15% of the total loan amount. While reducing government financial pressure, it also helps the company to leverage large medical construction orders with lower capital costs and achieve a win-win situation between the government and the enterprise. The implementation of the medical construction project accelerated, and the 250 million refill aid project was successfully implemented. The Lanzhou project and the Chengcheng County project signed this time won bids on August 31 and September 1, respectively, and construction contracts were signed in less than 3 months. At the same time, our statistics found that the five previously signed projects were all in the preparation stage before commencement of construction or construction, indicating that the company's execution is strong and the project is progressing rapidly. Furthermore, in order to ensure the smooth implementation of the construction project, the company plans to raise 250 million yuan (total capital raised 840 million) to increase the overall construction business capital of the hospital by issuing shares to replace the company's five newly signed hospital construction projects: Anlong County People's Hospital, Weinan No. 2 Hospital in Shaanxi Province, Danfeng County Hospital of Traditional Chinese Medicine, Ningling County People's Hospital, and Ningling County Maternal and Child Health Hospital. Project implementation is expected to accelerate. In 2016, new contract orders exceeded 2 billion yuan (excluding PPP), new cooperation agreements exceeded 6.5 billion yuan, and the total annual order volume exceeded 8.5 billion yuan. The company has signed 7 contract orders this year (excluding PPP projects). Up to now, the company has signed 7 contract orders this year (excluding PPP projects), with a total of 2 billion yuan, which is equivalent to 120% of the operating income over 15 years, and there are plenty of orders in progress; in the future, it is expected that revenue will be confirmed one after another. Reserve orders are abundant, and the release of performance can be expected. Profit forecast and valuation: The company's performance growth in the first three quarters is expected, so we lowered the company's 16-18 EPS forecast from 0.45, 0.68, and 0.93 yuan to 0.37, 0.57, and 0.80 yuan, corresponding to 53/35/25 times PE. We remain optimistic about the future development of the company. Risk warning: National PPP policy changes; contract execution time and ratio are lower than expected.