On the 24th, the company announced that it signed the “Guangdong Province Remote Medical Settlement Intelligent Review Service Agreement” with the Guangdong Provincial Social Insurance Fund Administration to carry out intelligent review of the provincial settlement of offsite medical treatment through cooperation on the Guangdong Provincial Offsite Medical Treatment Settlement Platform. In the past, in Guangdong Province, the company coordinated prefecture-level cities to carry out intelligent audit services. This time, the intelligent review of offsite settlement will integrate the business of various cities in Guangdong Province and form cross-city audit and settlement. By implementing an intelligent review service for offsite settlement, it will help every link in the company's card health insurance chain. According to the announcement, the company will provide Guangdong Province with a variety of services, including the establishment of a database of audit rules, intelligent review, medical insurance related information inquiry and management, analysis and data support of audit results, evaluation of drugs and medical consumables, and C-terminal services for patients. In terms of fees, there is no charge for this business for 3 years. Our mission is that this business will assume more of a basic service role; its strategic value is to expand coverage for other businesses and consolidate the company's dominant position in all aspects of PBM and healthcare. 1. The company is testing the waters for intelligent offsite settlement, which will expand the scope of the company's original smart health insurance audit service and form coverage of the province without dead spots in Guangdong Province; 2. Offsite settlement is a key task of the Ministry of Human Resources and Social Affairs in 2017, and the company's implementation of intelligent offsite settlement review services is in line with the needs of national policies. As a prelude to settlement, review is also one of the problems plaguing the development of offsite settlement. Currently, including Guangdong Province, offsite settlement reviews mostly rely on manual review. It is difficult to develop and apply audit rules, and even to verify the authenticity of audit documents. The business carried out by Haihong will effectively solve this problem; 3. Testing the waters in Guangdong Province will have a positive demonstration effect on the company's development of such business in other regions. Currently, Haihong's PBM business covers nearly 200 cities, and has a broad business base, and has a clear first-mover advantage in developing similar intelligent review services for offsite settlements; 4. It lays a solid foundation for the company to develop future businesses such as third-party services for health insurance funds, smart medical treatment, medical insurance payment prices, and health management for insured persons. On December 26, 2016 and January 3, 2017, respectively, the controlling shareholder of the company increased its stock holdings by about 950,000 shares through the secondary market; after the increase in holdings, the proportion of shares held by the company rose to 27.74% of the total share capital. In addition, the company is planning to launch the second phase of the employee shareholding plan, with a total scale of about 300 million shares; the total amount of capital raised by employees is about 150 million yuan, and the controlling shareholder guarantees the employee's subscription share. The second phase of employee stock ownership mainly comes from the company's share of the company's 2015 employee stock ownership plan. If there is any remaining capital, it is planned to obtain it through secondary market purchases, etc. The controlling shareholder and the company's series of actions show their confidence in the company's future development prospects and recognition of the company's value. On December 29, 2016, it was announced that the company received equity transfers totaling approximately RMB 152 million (HK$22 million +RMB 132.56 million), and is expected to achieve a total profit of about 90 million yuan, which will be included in 2016 profit and loss. As a result, the company's profit forecast for 2016 was raised. It is estimated that in 16/17/18, the company's net profit will be -0.4, 1.42, 554 million yuan, and EPS will be -0.02, 0.16, and 0.58 yuan (considering additional issuance). Maintain the target price of 83 yuan and maintain the “buy” rating.