Company News On March 10, the company released its 2015 annual report, and we are commenting on this. Incident reviews Driven by two main businesses, the performance increased dramatically. In 2015, the company achieved a cumulative total operating income of 3.809 billion yuan, a decrease of 18.55% over the same period last year, and realized net profit attributable to shareholders of listed companies of 136 million yuan, an increase of 288.90% over the same period last year. The chemical fiber business achieved a total revenue of 2,294 billion yuan and contributed 315 million yuan in operating profit, an increase of 47.52% over the previous year. The healthcare business achieved a total revenue of 1,515 billion yuan and contributed operating profit of 209 million yuan, of which the pharmaceutical logistics business achieved revenue of 835 million yuan and contributed 85.53 million yuan, a year-on-year decrease of 2.57%, while the medical services business achieved revenue of 680 million yuan and contributed 124 million yuan in operating profit, an increase of 14.25% over the previous year. The rise in the price of viscose staple fiber promotes increased profitability in the chemical fiber business. Due to the slowdown in the investment of new production capacity in the domestic viscose staple fiber industry and the discontinuation of production by some manufacturers that did not meet environmental protection standards, the decline in inventory in the viscose staple fiber market, and the increase in industry sentiment, prices have continued to rise since the beginning of 2015. After reaching a peak and falling in October last year, the market price of 1.5D viscose staple fiber has risen again this year, from 12,100 yuan/ton to the present, up 1,225 yuan/ton, while the price of raw material dissolved pulp has been relatively stable during the same period, and the company has implemented a relatively stable decline. efficiency gains, The company's production costs and period expenses have been effectively reduced. The gross margin of the company's viscose staple fiber business in 2015 was 13.75%, an increase of 6.45 percentage points over the same period last year. We expect that the price of viscose staple fiber will remain at 13,000-15,000 yuan/ton in the future, and that after the resumption of production by Manas Aoyang, the company's production capacity will increase. In the future, the profitability of the company's traditional chemical fiber business will continue to increase. The healthcare business is developing steadily. Medical services, integrated medical care, and precision medicine are the company's important future focus, and medical service is an important future development direction for the company. In addition to the existing Australian Ocean Hospital and its branch hospital, on February 16 this year, the company issued an announcement and signed the “Zhangjiagang New Phoenix Hospital Cooperation Framework Agreement” with the Fenghuang Town Government. The company plans to invest 42 million yuan to jointly build Zhangjiagang New Phoenix Hospital with the Fenghuang Town Government. The hospital is a second-level non-profit hospital with a construction scale of about 200 beds. The company's hospital expansion has gone one step further. In terms of rehabilitation chain projects, following the signing of the “Strategic Cooperation Framework Agreement” with Xuzhou State-owned Assets Investment and Management Group Co., Ltd. in December last year, the two sides formally signed the “Investment Cooperation Agreement for the Xuzhou Aoyang Huaan Rehabilitation Hospital Project” in February this year. The two sides jointly funded the establishment of Xuzhou Aoyang Huaan Hospital Co., Ltd., which is a for-profit second-level rehabilitation specialist hospital with a construction scale of about 157 beds. The company's rehabilitation chain project was officially launched. In addition, the company uses its own medical resources to develop collaboratively with pension assets under the Australian Ocean Group to create an integrated medical care model, and participate in Shanghai Jikai Gene to carefully lay out a detailed layout in the field of precision medicine and enter the healthcare business in all aspects. Risk warning company risks include, but are not limited to, the following: risk of price fluctuations in viscose staple fibers; risk of entering new fields. The investment proposal is to maintain the “prudent increase in holdings” rating over the next six months, and is expected to achieve EPS of 0.27 and 0.38 yuan in 16 and 17. Based on the closing price of 12.53 yuan on March 9, dynamic PE is 46.93 times and 32.78 times, respectively. The average price-earnings ratio predicted by listed companies in the adhesive industry in 2016 was 45.47 times and 37.13 times, and the average price-earnings ratio predicted by listed companies in the medical service industry in 2016 was 49.24 times and 42.09 times. The company's current valuation is close to the average of the adhesives industry and the medical services industry. The company's transformation into the dual main business of viscose staple fiber+healthcare has developed, and the medical services and pharmaceutical logistics business under Australia Ocean Construction Investment are operating well, becoming a relatively stable source of income and profit for the company. It is expected that in the future, it will usher in faster development by increasing investment in rehabilitation chains and high-end medical care; using its own medical resources to cooperate closely with the pension assets of the Australian Ocean Group to launch an innovative model of medical care integration, policy orientation, and consumer consumption upgrades, etc., it is expected that the traditional business will gradually recover; it is also expected that the price of viscose staple fiber market will rise and Manas Australia and Yang will resume production. We are optimistic about the company's development in the coming period and maintain a “prudent increase in holdings” rating.