On March 1 of the incident, the company announced changes in the main products entering the 2017 edition of the National Health Insurance Catalogue. Among them, 4 new varieties were added (only 2 were sold), 2 varieties were removed from indication restrictions, 1 variety was increased, and 2 varieties were adjusted from category B to category A. The varieties where the restrictions on indications have been lifted are major varieties. This adjustment is conducive to improving performance. The varieties that have removed the restrictions on indications include compound canard capsules and loboplatin, all of which are the company's major varieties. Among them, the estimated sales revenue of compound cantharine capsules in 2016 is 242 million yuan, and similar competitive products include Huaxanin capsules, acacia bacteria, and ginseng 1 capsules. According to IMS data, the market share of compound cantharine capsules in 2016 was 66.85%, far higher than competitors; Lobab's estimated sales revenue in 2016 was 361 million yuan. Similar competitive products include oxaliplatin, neda platinum, cisplatin, and carboplatin. According to IMS data, the market size of platinum sample hospitals from January to June 2016 was 1.52 billion yuan, with broad market prospects. The lifting of indication restrictions this time will help the company's major varieties to broaden the scope of indications and improve performance. The impact of new varieties is small, and increasing the range with restricted indications is conducive to maintaining advantages. Of the 4 new products, only 2 are on sale now, and the scale is small, so the impact on the company's performance is limited. One of the varieties that have increased the restrictions on indications is Ginkgo biloba damo injection, with an estimated sales volume of 422 million yuan in 2016. According to PDB data, the market share of this product was 76.63% as of the first three quarters of this year, so increasing the restriction of indications is beneficial to the further cultivation of existing varieties. Investment Strategy We expect earnings per share for 2016-2018 to be 0.52 yuan, 0.71 yuan, and 0.87 yuan, respectively, and the corresponding PE is 37 times, 27 times, and 22 times, respectively, giving it a “recommended” rating. Risks indicate policy risks; new product development risks; medical safety incidents, etc.