1. Overview of the incident: The company released its 2015 annual report and 2016 quarterly report on the evening of April 21. In 2015, the company achieved operating income of 321 million yuan, an increase of 16.13% over the previous year; net profit attributable to common shareholders of listed companies was 45.44 million yuan, a decrease of 9.15% over the previous year. The growth rate of revenue and net profit was lower than expected. The profit distribution plan proposes to convert 10 to 10 and pay 1 yuan now. 2016 Q1 revenue was 85.88 million yuan, up 22.89% year on year; net profit attributable to shareholders of listed companies was 14.55 million yuan, up 9.73% year on year. 2. Analysis and judgment: Traditional industry monitoring demand is weak, and net profit declined due to a decrease in non-operating income. Net profit declined 9% year over year, mainly due to a 26.72% year-on-year decline in non-operating income, of which government subsidies decreased by 6.98 million. Affected by the macroeconomic slowdown, the company's demand for testing instruments for the consumer goods industry, industrial production quality control, and geology, minerals, etc. is weak. In 2015, the company sold a total of 2009 units of various instruments, a year-on-year decrease of 16.22%. MALDI-TOF-MS has entered the small-batch trial production stage, and the clinical testing market space is expected to open up. The MALDI-TOF-MS (Matrix-Assisted Laser Analysis-Time-of-Flight Mass Spectrometer) engineering prototype independently developed by the company won the 2015 BCEIA (Beijing Analytical Testing Academic Conference and Exhibition) gold medal. The machine has completed second-generation prototype development. It has now entered the small-batch trial production stage. It is actively preparing for CFDA certification, and is expected to complete approval and sales within the year. MALDI-TOF-MS mass spectrometers can be widely used in rapid microbial monitoring fields such as hospital clinical microorganisms, food industry microorganisms, animal and plant quarantine microorganisms, etc., and has the advantages of high speed, simple operation and good stability. The instrument has broad market prospects in the field of clinical testing in hospitals. With the mass production of the company's MALDI-TOF-MS mass spectrometer, the hospital clinical testing market space is expected to open up. With the acquisition of Tianrui Environmental and the capital increase of Zhongkang Suntech, the “Internet+ Big Health and Environmental Protection” strategic blueprint was formed. In April 2015, the company used an overraised capital of 135 million to acquire 100% of the shares in Wending Environmental Protection (later renamed “Tianrui Environmental”), expanding the scope of business from traditional monitoring to environmental management. In June, the company invested 46.25 million to hold 12.8% of Zhongkang Suntech's shares to expand its business into the mobile medical field, and lay out the company's new products to quickly enter the medical testing field in the future. At the same time, the company's various instrument products are used in the field of food safety monitoring. As the country's emphasis on food safety continues to increase, instrument products related to food safety monitoring will directly benefit. In the future, the company will focus on environmental protection, food safety, third-party testing, etc., and the “Internet+ Big Health, Environmental Protection” strategic blueprint will take shape. Cash flow on the books is sufficient, and expectations for extended mergers and acquisitions are strong. In the five years since the company went public, the progress of epitaxial mergers and acquisitions has fallen short of expectations. In June 2015, the company invested 60 million yuan to jointly establish the Oriental Tianrui M&A Fund with Dongfang Ruide to actively carry out epitaxial mergers and acquisitions in the fields of environmental protection, third-party testing, and life science instruments. The company currently has 783 million cash on its books, and sufficient cash flow provides strong financial support for the company's subsequent deferred mergers and acquisitions. The first phase of the employee stock ownership plan completed the stock purchase, and working together in the same boat strengthened confidence in development. On February 17, 2016, the employee stock ownership plan completed the purchase of 6.33 million shares, with an average transaction price of 16.82 yuan/share. The introduction of an employee stock ownership plan helps stimulate employees' enthusiasm for work, retain the company's core technical talents, and enhance the competitiveness of core talents. Risk warning: Mass spectrometer marketing falls short of expectations; traditional business risk of decline. 3. Profit forecast and investment recommendations The company's EPS for 16-18 is estimated to be 0.30 yuan, 0.35 yuan, and 0.41 yuan; corresponding to 16-18 PE, it is 68 times, 57 times, and 49 times, which is a “careful recommendation”.