Incident 1: The company announced that the overseas subsidiary Xi Long USA, Inc., signed a framework agreement with Ming Hsieh, a shareholder of FulgentTherapeutics LLC, agreeing that Xi Long USA would invest in Fulgent with its own capital of 22,564,700 US dollars, receive 7.9054 million shares transferred by Fulgent shareholder MingxieH and others, and subscribe to 7.9054 million shares of newly issued D2 preferred shares by Fulgent. After the above transaction is completed, Xi Long USA will hold 158.08 million shares of Fulgent, accounting for 15% of its share capital. Incident 2: The company announced that it signed cooperation agreements with Shenzhen Fujin and Fujian Jinqiang. The company invested 51 million yuan, Shenzhen Fujin invested 30 million yuan, and Fujian Jinqiang invested 9.5 million yuan to jointly establish Fujian Fujun Gene Technology Co., Ltd. Invest in overseas genetic testing companies to improve the in vitro diagnostic reagent industry chain layout: Fulgent, which the company invests in this time, mainly provides comprehensive genetic diagnosis services (including single gene testing, multiple gene combination analysis, exon testing, cancer gene specific testing and other testing services) to hospitals or scientific research institutions. It is a standardized genetic testing service agency for clinical molecular diagnosis certified by the US CLIA and CAP, serving the United States, Canada, Australia, Europe, South America and many countries and regions in Asia. Fulgent diagnosis is also the highest application in the world A company that performs DNA sequencing and gene copy number analysis using next-generation sequencing technology, and provides professional genetic consulting services. In 2015, it had an operating income of US$9.6885 million and a net profit of US$4.21.27 million. We expect that with the Ministry of Science and Technology issued the “National Guidelines for Precision Medicine” in March 2016 and the inclusion of precision medicine in the “13th Five-Year Plan” major science and technology projects, precision medicine and genetic testing are expected to accelerate development during the “13th Five-Year Plan” period, breaking the bottleneck of industrialization, and the future market prospects are very broad. This investment is an important step for the company to move from the in vitro diagnostic reagent business to the more advanced field of genetic testing, and will help the company further improve the layout of the in vitro diagnostic reagent industry chain. The company learned the world's leading genetic testing technology from Fulgent through investment. In the future, Fujun Gene, a subsidiary established this time, will mainly carry out genetic testing and diagnosis business in China. Continued mergers and acquisitions, expanding from the field of chemical reagents to diagnostic reagents: see next page; in vitro diagnosis is expected to benefit medical reform, and will maintain relatively rapid growth in the future: see next page for specific analysis; build e-commerce for laboratory chemicals to create a large open chemical platform: see next page; actual controllers and company executives participate in a fixed increase, demonstrating confidence: see next page; endogenesis and epitaxial integration to maintain buy-A rating: The company has now initially formed a chemical diagnostic test and two reagents through continuous mergers and acquisitions Business model focusing on major fields At the same time, the transformation of business models is realized through e-commerce platforms. The company management clearly thinks about the future direction of the company's development, and the implementation of a series of mergers and acquisitions reflects the company's strong execution. The company's EPS for 15-17 is expected to be 0.39, 0.59, and 0.83 yuan respectively. The company's chemical reagent business is growing steadily, and the construction of a laboratory chemical e-commerce platform and epitaxial mergers and acquisitions to enter the high-growth diagnostic reagent industry will bring new growth points. This overseas investment will further improve the company's industrial chain layout and expand into the higher-end field of genetic testing, maintain a buy-A rating, and maintain a purchase-A rating, with a target price of 45 yuan for 6 months. Risk warning: Promised performance falls short of expectations.