The exclusive variety Lobo broke out in 2016 after completing early hospital expansion work, and is expected to continue to be increased after medical insurance restrictions are lifted; the company's products benefit from medical insurance catalogue adjustments: 4 new, 2 restrictions lifted, and 2 adjusted to category A, so there is huge room for follow-up; core managers have increased their holdings of the company's shares totaling 159 million yuan, showing firm confidence in the company's future development. We are optimistic about the closed-loop model of the company's oncology drug+doctor group+oncology hospital/treatment center. We expect the company to continue to distribute drugs benefiting from medical insurance and performance flexibility brought about by oncology medical services, and maintain recommendations. In 2016, sales of Lopab exploded, and it is expected that the volume will continue to increase after restrictions are lifted. In 2016, the exclusive variety Lobo achieved sales of 361 million yuan after completing early hospital expansion, an increase of about 80% over the previous year. The new medical insurance catalogue removes the original restriction of “limiting the ineffectiveness or intolerability of other platinum-type drugs” in the future. This product will compete directly with cisplatin and others in the future, which is beneficial to give full play to its advantages such as low side effects, and is expected to maintain a growth rate of more than 30% in the future. The catalogue of medical insurance benefits for various types of benefits has been adjusted. The medical insurance catalogue was adjusted in '17. Four new drugs, the company's products, Aiyu Capsule, Qi Activating Droplets, Dendengtong Brain Drop Pills, and Gynecological Dendengtong Droplets, and Gynecologic Medication Pills, entered the medical insurance catalogue. The medical insurance classification for Baogong Hemostatic Granules and Anti-Inflammation Capsules was adjusted from category B to category A. At the same time, Eddy's injections were not classified as adjuvant drugs. As the company's exclusive variety in the oncology field, Ai Yu is estimated to have a potential scale of over 500 million; the exclusive variety of Qi Activating Blood Droplets is expected to become the company's major cardiovascular product, with huge market potential. With the acquisition of Mianyang Fulin Hospital, medical service projects have been implemented one after another. The company has signed an agreement with Sichuan Fulin Industrial Group to acquire 90% of Fulin Hospital's shares for 135 million yuan after the latter completed the transformation of Fulin Hospital into a for-profit medical institution. The hospital is the company's first general hospital in the southwest region. It is of strategic significance to the company's medical service business in the southwest region. It is expected that the company will also launch a hospital/oncology treatment center project in the future, providing support for the high growth in medical service performance in 17 years. The increase in executive holdings shows confidence. Recently, 25 executives, including the chairman and general manager, increased their holdings of the company's shares by a total of 9.06 million shares, accounting for 1.14% of the total share capital, increasing their holdings by 159 million yuan at an average price of 17.50 yuan/share. The massive increase in holdings by core executives has fully demonstrated their high recognition of the company's development plans and prospects; at the same time, the bundling of interests is expected to stimulate further improvement in operating efficiency. Profit forecast: The company's net profit growth rate for 17 and 18 is expected to be 22% and 19%, and EPS is 0.59 yuan and 0.70 yuan respectively. We believe that the company's drug sales will be greatly promoted by this medical insurance catalogue adjustment. We are optimistic about the continued implementation of the company's oncology medical service business and maintain recommendations. Risk warning: risk of local drug policy; risk of price reduction in tenders; risk of medical service mergers and acquisitions not progressing as expected.