Pharmaceutical business is currently the main business of the company, after the early business adjustment, the current pharmaceutical commercial income accounts for more than 93%. At present, the company has a layout in 9 provinces, although the number is small compared to the 13 provinces in the country, but the provinces with a large population base and mature development (such as Henan, Hubei, Shandong, etc.), the corresponding pharmaceutical market capacity is large, a single province can have hundreds of billions of markets. As a result, the company's business has enjoyed a high growth rate of about 20% in recent years, much higher than the industry average.

The current national policy supports large pharmaceutical commercial companies to continue to become bigger and stronger, and the two-vote system + business reform makes small commercial companies increasingly lose their foundation for survival, which in turn promotes them to be merged and acquired by large companies. Taking advantage of the policy, on the one hand, the company continues to accelerate its expansion in Shandong, Henan, Hubei and other provinces through mergers and acquisitions; on the other hand, it integrates its pharmaceutical commercial companies and sets up six regional group companies with the province as a unit. At the same time, we should adopt equity incentive and issue performance targets. If it can be successfully completed, the listed companies promise to buy back five years later and buy back at the price of 8-10 times the audited operating net income per share in 2021, which has greatly stimulated and successfully promoted the drive of all regions. Therefore, in the future, the company's business in Henan, Shandong, Hubei and other regions is expected to achieve high-speed or even double growth.

With the help of policy and financial advantages, the company is expected to continue the pace of mergers and acquisitions in the field of circulation in the future. In terms of policy, national policies such as the two-vote system promote large circulation enterprises, including companies, to move forward, reducing the obstacles to acquisition and the difficulty of negotiation, and even many small enterprises take the initiative to be acquired by large enterprises. therefore, in the future, the company is expected to continue to acquire small enterprises, and it is also possible to expand to other provinces other than 9 provinces. In terms of capital, the company has abundant funds: at present, an increase of 3 billion has been received, and it is also prepared to issue corporate bonds and other financing means such as short-term financing and winning votes, with a total scale of 2.1 billion. Abundant funds will help the company to continue mergers and acquisitions and expansion.

The company has demonstrated a strong integration ability in the past M & A history, even if the target is acquired on a small scale and the business volume is not high, it can also achieve rapid improvement after M & An integration. For example, after the company acquired Henan Dongsen, the revenue scale of the target increased from 344 million yuan in 11 years to 690 million yuan in 16H1, and the annual operating income increased more than three times. In the future mergers and acquisitions, the company will continue to pay attention to and inspect the target management team, agent varieties and hospital resources, and sign a gambling agreement after the merger to make requirements for the profitability of the target. Through this strengthening of management, the company will be able to continue its strong integration ability in the future and promote the rapid development of the target.