Key investment events: Recently, we exchanged views with company leaders on the company's business and strategy. Although financial expenses are dragging down the performance of the company headquarters in the short term, winning the new bid is expected to drive the rapid development of the company headquarters. In 2015, the company's wholly-owned cash acquisition of Shanghai Xinfeng generated 700 million M&A loans. Judging from the 2016 Q1 situation, it is estimated that the additional financial expenses will be around 10 million per quarter. With the funds raised in place, we believe that the impact of financial expenses is expected to be eliminated in the third quarter. Considering that since 2015, the company has participated in the bidding process for many provincial basic drug projects and non-basic drug projects, and won a total of 16 new bids in 16 provinces, we believe that the company's headquarters business will begin to develop rapidly in 2017, driven by the elimination of the impact of financial expenses and new winning bids. Wholly-owned holding of Shanghai Xingaofeng, CRO has become the company's main strategic business, and performance is likely to exceed performance promises. The CRO industry is at the core of the pharmaceutical R&D industry chain and is indispensable for the development of new drugs. Benefiting from the acceleration of consistency evaluation and approval of new drugs, the domestic CRO industry is expected to expand rapidly. We expect the domestic CRO market to reach 60 billion yuan by 2020, with a compound growth rate of over 20%. The company strategically entered the CRO industry at the end of 2015. The wholly-owned Shanghai Xingaofeng is a CRO enterprise that provides full-industry chain research services covering pre-clinical research and clinical research. The company has accumulated services for more than 550 projects, of which more than 450 are innovative drug CRO projects. The company has become one of the industry leaders in the field of innovative drug CRO services. The company's “government, industry, and medical research” combines a business model with high customer stickiness, which can guarantee a continuous stream of company orders; the company's GRDP service management system guarantees that the company can use outsourcing services to achieve streamlining operations and strong traceability, thus achieving low assets and high profit margins. Xinfeng promised that the net profit after deductions for 2015-2018 (excluding fund-raising projects) will not be less than 85 million, 106 million, 133 million, and 166 million yuan. Considering that the new peak achieved revenue of 380 million yuan in 2015, exceeded net profit of 120 million yuan (of which 0.2 billion yuan was non-recurring profit and loss), compounded by the impact of the new drug policy such as consistency evaluation, we think it is possible that the new peak's performance exceeded expectations. With the transformation and upgrading to R&D and high-end, valuations are expected to increase simultaneously. After the 2012 industry drug capsule incident, the company began an active transformation. The company first transitioned from antibiotics to non-resistance. Non-resistant business revenue and gross profit surpassed the antibiotic business in 2015 and 2013, respectively; at the end of 2015, the company transitioned from traditional generic drugs to new drug CRO through acquisitions; in the future, the company will also expand into high-value-added industries such as new drug development and high-end medical devices in the big health industry through mergers, acquisitions and restructuring within the industry to achieve the strategic goals of the company's industrial transformation and upgrading. We believe that the company's valuation is expected to gradually increase, and extension development can be expected. Profit forecasts and investment advice. The diluted EPS for 2016-2018 is expected to be 0.57 yuan, 0.86 yuan, and 1.16 yuan respectively, corresponding to the current stock price PE of 61 times, 40 times, and 30 times, respectively. Considering that the performance constraints of the company headquarters are expected to be lifted, the scalability of the new peak CRO business is strong, and the company may extend development expectations, we believe that the company's performance and valuation are expected to improve simultaneously. For the first time, we have given a “buy” rating. Risk warning: CRO business development or falling short of expectations, formulation bidding or price reduction risk, extension expansion or falling short of expectations.