Guide to this report: The company actively lays out the medical and environmental fields as a monitoring target for small market capitalization and light assets, and has high growth potential; historical expansion has been recognized by the market, so it is recommended to focus on the epitaxial layout. A “gain” rating was given, and the target price was 16.54 yuan. Investment Highlights: Investment advice. Covered for the first time, a “gain” rating was given. We are optimistic that the company will enter the medical and environmental protection market through epitaxial expansion. We expect the company's revenue in 2016-2018 to reach 459 million yuan, 620 million yuan and 797 million yuan respectively, with net profit of 77 million yuan, 0.95 yuan and 123 million yuan respectively, corresponding to EPS of 0.17 yuan, 0.21 yuan, and 0.27 yuan, with a target price of 16.54 yuan. Enter the 10 billion medical and environmental protection market. ① Medical market: The equipment market is about 35.9 billion yuan; the company's MALDI-TOF-MS medical monitoring products have entered small-batch trial production and participated in Series A financing of Kang Suntech, an Internet medical startup. ② Environmental protection market: The market size of soil monitoring equipment is expected to reach 32 billion yuan, and the incremental market for water quality monitoring equipment driven by the “13th Five-Year Plan” is expected to reach 4.1 billion yuan; at present, the company has formed a complete gas, water and soil monitoring product line, and has further obtained industrial resources through the acquisition of Tianrui Environmental. The family is strong, the historical expansion has been recognized by the market, and we look forward to the company's extended growth. ① The company has 700 million yuan in cash and an overfunded balance of 500 million yuan in the IPO; and the balance ratio is low (13.52%). ② The company plans to acquire 100% of Basie Biotech's shares and 40% of China Testing's shares. The price is reasonable. The target assets are involved in the medical and environmental protection fields, and have a synergy effect with the company's epitaxial layout. The company has personnel and technical advantages. ① The company's core management team has been stable for a long time, and the implementation of the employee stock ownership plan binds the interests of core technical personnel and is conducive to the accumulation of sales and R&D teams. ② The company relies on university resources and attaches importance to scientific research investment, and R&D investment has always maintained a level of 10% or more of revenue. risk factors. There is still uncertainty about qualification approval; the upstream industry is in a weak cycle.