Abstract: “Sunshine centralized distribution” gives full play to the scale effect, strengthens bargaining power with upstream industries, and broadens profit margins; closely cooperates with downstream medical institutions to implement “pharmacy co-management”, which not only increases the turnover rate of hospital pharmacies, but also increases the turnover rate of its own pharmacy. In the future, it will be further promoted separately with pharmaceuticals. In the future, Haiwang Galaxy will prioritize seizing a large number of pharmacy hosting services based on its experience in “pharmacy co-management”, and profit space has been further expanded. Haiwang's pharmaceutical service chain extension innovations include optimizing pharmacy management and professional pharmacy extension at two levels, as well as various service innovation models such as “pharmacy co-management,” in-hospital specialty pharmacies, and smart pharmacies. The company was able to obtain a large number of hospital prescriptions through in-depth intervention in the management and operation of hospital pharmacies. After Haiwang's pharmacy management extended business scale, entering the PBM field in the future has obvious resource advantages and industrial chain docking advantages. Neptune Biotech's pharmaceutical manufacturing margin has declined sharply in recent years, mainly due to the overall downside effects brought about by lower bidding prices and slower progress. The gross margin of the food and health products business also declined slightly, but remained at a high level. The gross profit of the food and health products business has surpassed pharmaceuticals. Considering the pioneering role of food and health products in the era of pharmaceutical e-commerce, the food and health products business still has some potential for growth in the next few years. The company plans to invest in the establishment of Shenzhen Haiwang Pharmaceutical Technology Research Institute Co., Ltd. and the Haiwang Pharmaceutical Consistency Evaluation Research Center. The company will invest in the US Provision Group, and Hairong International will jointly establish a joint venture subsidiary with ProvisionAsia in China. The joint venture will be the exclusive distributor of Proton Therapy systems in China, and will have exclusive rights to develop proton centers or oncology centers in China. Profit forecast: We expect the company's EPS for 2016-2018 to be 0.20/0.30/0.37 yuan respectively, covering the first time, and giving it an “increase in holdings” rating. Risk warning: 1) cumulative risk of accounts receivable; 2) epitaxial expansion falls short of expectations.