Incident: The company announced on October 17 that its wholly-owned subsidiary Guangdong Shangrong Engineering General Contracting Co., Ltd. and its holding subsidiary Shenzhen Zhongtai Huahan Architectural Design Co., Ltd. (Consortium) won the bid for the Lanzhou New Area Traditional Chinese Medicine Hospital construction project, with a bid amount of 369 million yuan. The exact amount is subject to the final signed contract. Comment: The total amount of the Lanzhou project is 2.5 billion, which will have a positive impact on the performance of the next few years. The company signed a strategic cooperation framework agreement with the Lanzhou New Area Management Committee. The company is responsible for preparing the overall plan for the establishment of health institutions in the Lanzhou New Area, the renovation and expansion of the New District People's Hospital, the New District Hospital of Traditional Chinese Medicine, and the New District Emergency Center, as well as the overall construction of the New Area Disease Prevention and Control Center and the New District Maternal and Child Health Hospital. The total investment of the project is about 2 to 25 billion yuan, and is expected to be completed in 5 years. The average annual contract amount of the project calculation (based on 2.5 billion dollars) accounted for more than 30% of the company's audited operating income in 2015. The winning bid for the Lanzhou New Area Traditional Chinese Medicine Hospital construction project shows that the early implementation of the entire Lanzhou Public Health Project is progressing smoothly and will have a positive impact on the company's business performance in the next few years. The entry threshold for the credit purchase business is high, and the company's industrial advantage is obvious. The Lanzhou New Area Traditional Chinese Medicine Hospital construction project will adopt a buyer's credit model. Generally, 70% of the project construction capital is provided by the buyer's syndicated credit line. The company guarantees the buyer's credit business. The local government or hospital only needs to invest 30%, greatly reducing the local financial burden. Buyer credit is the company's starting business. It has accumulated nearly 20 years of industry experience. It has a high entry threshold. Because it involves guarantees and offsite loans, banks have high asset structure requirements for listed companies (debt ratios must not be too high, capital size must not be too small), and it is difficult to gain the trust of banks without long-term partnerships, so many companies that do hospital construction projects are unable to carry out credit buying business. In addition, banks also have high qualification requirements for partner companies, and the company is fully qualified and can provide customers with overall solutions from initial planning, design, construction, and support to the final turnkey, but most companies in the market can only do one of these medical projects. Therefore, the company has a clear advantage in developing a credit buyback business. The implementation of the company's projects has accelerated, and growth certainty is high. The company currently has orders of 4.628 billion yuan (excluding PPP projects), and the amount of projects in the later stages (including the audit and settlement stage, completion and acceptance stage, mechanical and electrical installation stage, etc.) has reached 1.46 billion; moreover, many projects started in 15/16, and performance can be expected to be released. The performance is expected to increase by more than 40% in 2016. Profit forecast and valuation: Based on the company's current business situation, we estimate that the company's 16-18 EPS was 0.45, 0.68, and 0.93 yuan, respectively, corresponding to 52/34/25 times PE. Considering that the company's hospital has sufficient PPP orders and accelerated delivery, it is highly recommended to give it a valuation of 34 times in 17 years. Risk Warning: Changes in national PPP policies; contract execution times and ratios fall short of expectations.