The company is expected to form four major divisions of “aluminum processing, clean engineering, medical equipment, and health services” in the future. We estimate that the net profit of the four major divisions is expected to reach 600 million yuan in three years, with a target market value of 24 billion yuan. Capacity transfer+product upgrade help increase net profit of aluminum processing, Baotou Changalu's “aluminum water - aluminum ingot - aluminum plate with foil” processing model is expected to reduce comprehensive costs and undertake low-end products such as air conditioning foil; Changshu headquarters and Shandong Xinheyuan product lines have developed in depth, and the share of automotive materials products is increasing year by year. The aluminum processing business has evolved from the original price per ton to a high value-added model based on price per kilogram. In the future, it is not ruled out that it will enter terminal products, and the added value is expected to continue to increase further towards per-piece pricing. In 2016, the company expects the aluminum processing business to achieve a total profit of 88 million yuan. The clean engineering will develop vertically and horizontally, expand and strengthen Shanghai Langmai as the main body, and horizontally form a “pharmaceutical factory clean+hospital clean+food cleanliness” business structure to disperse the risk of single downstream operations; vertically form an EPC package model of “pharmaceutical machine equipment+turnkey design+project construction” to increase the overall profit margin. According to performance commitments, Shanghai Langmai's net profit in 2016 is not less than 87.9 million yuan. At the same time, the annual report predicts that 2016 will achieve a total profit of 1.25 million yuan. There is a vast world of medical devices, and there is great potential to enter the high-end artificial joint market by applying for an FDA registration number, using Suzhou Youshi as the main body. The domestic market for three types of orthopedic devices is nearly 15 billion yuan, with artificial joints accounting for about 50%. Most of the company's orthopedic equipment business team are from first-tier foreign brands and have mastered channel advantages. Orthopedic devices are expected to become the main source of profit in the future. The medical service is based on the “center+satellite” development model. The company is currently actively exploring the “regional central hospital+peripheral satellite clinic” model, focusing on the field of specialty medical services. Valuation and ratings We believe that the company has entered an inflection point in its performance since 2015. The company's net profit for 2016-2018 is estimated to be 2.08 million, 3.04 and 533 million yuan respectively, corresponding to EPS of 0.29, 0.42 and 0.74 yuan, respectively. According to PEG=0.8, the compound net profit growth rate for the three years 2016-2018 was 60.07%, giving a valuation of 48 times that of 2016, corresponding to the target price of 13.92 yuan, maintaining the “buy” rating. Risk warning: 1. The structural upgrade and market expansion of alloy foil products fell short of expectations; 2. The offsite transfer of air conditioning foil production capacity fell short of expectations; 3. The price of aluminum fluctuated greatly; 4. The health transformation process fell short of expectations.