Incident: The company recently issued an asset purchase report. It plans to acquire 49% of Mijian Information's shares for 202 million yuan. Of these, it plans to issue shares to pay 162 million yuan, the issue price is 1,375 yuan/share; and 40376 million yuan in cash. It is proposed to raise no more than 97 million yuan in supporting capital from Houshi Investment, Rongtuo Investment, and CICA Investment by issuing shares to pay cash consideration, intermediary fees, and supplementary working capital. The acquisition of the minority shareholder interests of Mijian Information will further enhance its strength in the field of clinical medical informatization. Mijian Information is a medical informatization solution provider with core technology. Its main products include medical industry IT application systems and solutions such as clinical information systems and intelligent integrated cloud platforms; focusing on the application of clinical information systems in critical critical cases, it can provide customers with clinical information systems such as emergency clinical information systems (ECIS), intensive care clinical information systems (ICIS), and surgical anesthesia clinical information systems (AIMS) for use in hospital clinical departments. It also combines next-generation information technology such as cloud computing, big data, and the Internet of Things to provide customers with urgent risk Medical informatization solutions for hospital-wide, group hospitals, and regional applications, such as the Critical Care Cloud Platform and the Regional Emergency Care Collaborative Cloud Platform. The listed company acquired 51% of Mijian Information's shares at a price of 128 million yuan in September 2015. With this acquisition of its minority shareholders' equity, Mijian Information will become a wholly-owned subsidiary of the company, which will facilitate the company's control over Mijian Information, further strengthen the sharing of technology and market resources, and enhance the company's competitive advantage in the field of clinical care informatization. Performance increased by about 10%. The counterparty promised that Mijian Information's audited net profit for 2016-2018 will not be less than RMB 2327, 307, and RMB 40.56 million, respectively. If this acquisition is successful, considering the additional share capital and share ratio, the company's EPS will increase by about 10%, which will contribute to improving the company's profitability. The prospects for medical informatization are broad, and the company focuses on the fields of smart medicine and health data. According to IDC statistics, China's medical IT expenditure in 2014 was 22.31 billion yuan. It is estimated that the size of the IT spending market in the medical industry will reach 42.53 billion yuan by 2019. There is broad scope for future market development. The company takes the field of clinical medical informatization and medical big data as the key direction of future development, and strives to become a leader in the clinical application segment, a regional leader in the direction of data platforms, and an innovator in the field of healthcare big data. Profit forecast: Without considering this acquisition, we expect the company to achieve net profit of 71,83, 9028, and 10.49 million yuan respectively, EPS of 0.19, 0.23, and 0.31 yuan respectively, corresponding PE of 74, 60, and 45 times respectively. If this acquisition is successful and the merger is completed in 2016, we expect the company's EPS in 2017-2018 to be 0.27 and 0.35 yuan respectively, and the corresponding PE is 52 and 40 times, respectively. We are optimistic that the company will strengthen its competitive advantage in the clinical medical informatization segment through epitaxial mergers and acquisitions, and gradually develop into a leading enterprise in the fields of smart medicine and health data. First coverage, giving the company a “Recommended” rating. Risk warning: (1) market competition intensifies; (2) mergers and acquisitions do not meet expectations; (3) counterparty performance promises cannot be fulfilled.