Investment highlights: Hunan Development released its annual report today. In 2015, the company achieved sales revenue of 276 million yuan, an increase of 1.79% over the previous year, net profit of 129 million yuan, a decrease of 33.65% over the previous year, and net profit after deduction of 129 million yuan, a decrease of 33.58% over the previous year. The decline in corporate profits is mainly due to the fact that corporate income tax began to be paid in 2015, not due to non-operating factors. The company went public in 2012 under the umbrella of Yuanjinguo Industrial. After listing, the company did not pay corporate income tax in 12-14 due to profit needs to cover losses of Yuanjinguo Industrial. The company began to pay income tax in 2015 (about 37 million). If this influence is added, the company will achieve net profit of the same caliber of 166 million, a slight decrease of only about 10% from the previous year. The business volume of the Xiangya Pok Oi Rehabilitation Hospital is growing rapidly, and a rehabilitation chain platform is beginning to take shape. As the company's biggest point of interest, the development of the company's rehabilitation medical business is very encouraging. On the one hand, the flagship hospital, the Xiangya Pok Oi Rehabilitation Hospital, showed a rapid growth trend in business volume and achieved a profit of 16.21 million for the first time: in 2015, the number of discharges increased by 41.8%, the number of discharges increased by 40%, the number of outpatients increased by 54.7% and 76.7%, respectively, and achieved profit of 16.21 million for the first time, successfully fulfilling its performance promise. On the other hand, the construction of the company's rehabilitation chain platform has progressed steadily at the same time. By the end of 2015, the company had implemented a number of rehabilitation hospitals. Among them, the Changde Boai Rehabilitation Hospital had completed pre-approval for the establishment of medical institutions and was ready for trial operation after the renovation was completed. The pre-approval materials for the establishment of the Xiangxi Pok Oi Rehabilitation Hospital had been accepted by the Xiangxi Autonomous Prefecture Health Bureau. We believe that benefiting from Mr. Zhou Jianglin's rich industry resources and the company's state-owned enterprise background, the company is expected to develop into a rehabilitation medical chain platform company in Hunan Province. The hydroelectric power business is developing steadily, providing stable cash flow for the company's transformation. In 2015, the company's hydropower business revenue was 275 million yuan, an increase of 2.5% over the previous year, showing a steady growth trend. Currently, the company's hydroelectric power generation capacity is 220,000 kilowatts, including 140,000 kilowatts for Zhuzhou Avionics, 20,000 kilowatts for Bird's Nest, and 60,000 kilowatts for Python Power. The hydropower generation business will steadily bring in about 150 million dollars of cash flow every year, providing sufficient cash flow for the company's transformation. Profit forecast: We expect the company's net profit in 16-18 to be 152 million, 167 million, and 182 million yuan, respectively, and EPS of 0.33 yuan, 0.36 yuan, and 0.39 yuan respectively. The company's hydroelectric power generation steadily contributes 150 million dollars in net profit every year. At the same time, the rehabilitation medical business has significant advantages and has shown a chain platform development trend. The company's reasonable one-year stock price is 18 yuan, which is about 54 times the corresponding 16-year valuation. Maintain the company's “Highly Recommended” investment rating. Risk warning: rehabilitation chain expansion falls short of expectations; hydropower generation fluctuates beyond expectations; corporate governance mechanisms cannot be optimized