Investment highlights: Event: On August 11, the company released the 2016 semi-annual report, achieving operating income of 551 million yuan, an increase of 71.74% over the previous year; net profit of 153 million yuan, an increase of 75.18% over the previous year; net profit after deducting 147 million yuan, an increase of 69.57% over the previous year; and achieving an EPS of 0.23 yuan. Comment: The scope of consolidation has increased, and the report performance has increased significantly. The reverse acquisition completed in September 2015 led to an increase in the scope of the merger in the first half of 2016, the legal parent company's operating income and sales growth during the reporting period, and significantly increased the 2016 interim report results. Among them, the chemical business segment had revenue of 181 million yuan and net profit of 54 million yuan, which was basically the same as the same period last year; the pharmaceutical business segment had revenue of 369 million yuan, an increase of 14.80% over the previous year, and net profit of 92 million yuan, lacking comparable data for the same period last year. The growth rate of the industry has slowed, and sales of major products have increased or decreased. In terms of holding companies, Weiming Biomedical achieved net profit of 108 million yuan; Tianjin Weiming realized net profit of -156.29 million yuan, a year-on-year increase of 18.73% in losses. In terms of main products, rat nerve growth factor recovered revenue of 344 million yuan, up 18.27% year on year. This may be due to its long-term high market share, high drug market recognition and strong promotion; the restructured human interferon α2b Anfulon's revenue was 225 million yuan, down 18.20% year on year, probably because it faced pressure from imported long-term interferon and had a small market share. The performance of Beijing Kexing declined sharply due to the restructuring of the Class II vaccine channel. Beijing Kexing's revenue was 61 million yuan, a year-on-year decrease of 63.74%; net profit was -034 million yuan, a decrease of 211.50% year-on-year, mainly due to industry factors such as policy adjustments for type II vaccines and poor distribution channels. On June 8, the company's new EV71 vaccine was shipped and sold, and it is hoped that volume sales will be achieved in the future. Rat nerve growth factor indications broadened clinically. On August 10, an unknown biomedical was approved for a clinical trial with diabetic foot as the proposed indication. A diabetic foot means that the lower limb protective function of a diabetic patient's foot is reduced due to neuropathy. It is one of the most serious chronic complications of diabetes and the most expensive treatment. Currently, there are no neurogrowth factor-related products for treating diabetic foot on the market for sale at home or abroad. The continuous expansion of mouse nerve growth factor indications is an effective means of improving product competitiveness, opening up market space, and securing market share. Profit forecasts and investment advice. We are optimistic that the company has the dual main business of “Wanchang headquarters+unknown pharmaceuticals”, and has a solid layout in the field of biological products, and is fully motivated to expand new products in the future. Expecting an increase in sales brought about by the expansion of mouse nerve growth factor indications and an improvement in performance due to the restructuring of vaccine channels in the second half of the year, the 2016-2018 EPS is expected to be 0.62 yuan, 0.75 yuan, and 0.92 yuan, respectively. Referring to the valuation situation of comparable companies, the PE of 52X in 2016 was given, corresponding to the target price of 32 yuan. Maintain a “buy” rating. Risk warning: new product development and promotion risks, progress of Kexon's privatization, extension progress.