Core view: Incident: The company released its 2015 annual report and 2016 quarterly report forecast. In 2015, the company achieved operating income, net profit, and net profit after deduction of 1,465 million yuan, 177 million yuan, and 147 million yuan respectively, down 3.90%, 9.91% and 19.65% year-on-year respectively. EPS is 0.28 yuan, and a dividend plan with a cash dividend of 1.2 yuan for every 10 shares was announced. In the first quarter of 2016, the company expects to achieve net profit of 30.93 million yuan to 38.66 million yuan, a year-on-year decrease of 0-20%. The removal of traditional drug inventories is nearing completion, and the elimination of tablet workshop transformation factors has clearly dragged down revenue growth in the traditional business sector. The three core products, antiviral oral solution, orange red series, and banyan root granules achieved revenue of 411 million yuan, 187 million yuan, and 56 million yuan respectively, with year-on-year increases of -22.19%, +24.72%, and -36.59%, respectively. Anti-virus and Radix isandra are mainly affected by inventory removal factors. This factor is expected to be eliminated in the 2nd quarter of 2016. The winning price of the Orange Red series has increased, and channel coverage has deepened and continued to grow rapidly. In the tablet business, revenue in the first half of 2015 was 148 million yuan, down 10% year on year. GMP workshop transformation factors were eliminated in the second half of the year. Annual revenue was 395 million yuan, up 15.37% year on year, and endogenous month-on-month improvement was obvious. The merger and acquisition of the epitaxial company has landed in Tianji, promising a 10% compound net profit growth rate in the next three years, and is optimistic about the company's continued mergers and acquisitions in the popular beverage industry. The annual revenue of the direct sales business of health products was 62 million yuan, an increase of 41.83% over the previous year, and still maintained rapid growth. The second phase of the TCR project began, and several ongoing research projects progressed in an orderly manner. In 2015, the company invested 93.46 million yuan in R&D expenses, an increase of 37% over the previous year, accounting for 6.38% of revenue. The first phase of TCR has been completed, and the second phase is planned to enroll 36 cases to study the two symptoms of NSCLC and lung cancer. Other ongoing research projects, the small nucleic acid Kotrani has entered the rapid review channel of the Drug Review Center; the antiviral oral solution has obtained a natural health product certificate issued by the Canadian Health Service and has obtained mature market entry qualifications; the drug registration application in the UK has been accepted. Overseas registration of the main products will help win domestic bids and overseas sales in the long term, and open up new market space. The 16-18 results are expected to be 0.32 yuan/share, 0.38 yuan/share, and 0.44 yuan/share, respectively. The company's traditional business endogenous improvements, the tablet epitaxial industry integration, and TCR technology is comparable to international leaders. We expect the company's EPS to reach 0.32/0.38/0.44 yuan in 16/17/18 (EPS was 0.22 yuan in 2015). The current stock price corresponds to 49/44/38 times PE, maintaining a “buy” rating. Risks suggest that drug development progress is low in expectations; risk of mergers and acquisitions;