Key Opinions 1. The combination of Desai Systems and Desai products is driving profit growth. In 2015, the company completed the issuance of shares to purchase part of Desai Diagnostic Systems and Desai Diagnostic Products, and the consolidated ratio increased to 70% from 25% and 31% in January-May. The profit level showed an upward trend compared to the same period last year. Desai has a leading market share in special testing programs such as HCV, special proteins, and cerebrospinal fluid. The number of dealers exceeds 300, and the coverage rate of the top 50 hospitals in the country is as high as 74%. The acquisition of Desai has further improved the company's biochemical diagnostic product line, increased market competitiveness, and formed complementary and synergistic effects. 2. Joint venture brand+self-developed chemiluminescence immunoanalyzer targets different customers and drives reagent sales. The company has been engaged in research and development of analyzers and supporting reagents for many years. Among them, the self-developed fully automated chemiluminescence immunoassay analyzer CI1000 was launched in October 2014. The target customers are level 1 and 2 hospitals. The IDS-iSys analyzer cooperated with IDS combines various testing items such as chemiluminescence, biochemistry, and coagulation. In particular, it is leading the world in special items such as bone metabolism, and is positioned as a level-III hospital or above. Chemiluminescence products are one of the important points of interest of the company in the future. Due to the use of a closed system, the sales volume of instruments and equipment is an important leading indicator of future sales of consumables. We expect the company's sales volume of chemiluminescence equipment in 2015 to be at the level of several dozen units. In terms of consumables, the current 31 chemiluminescence reagents can be applied to CI1000 and IDS instruments. 3. Cooperate with ENIGMA to lay out the fields of molecular diagnosis and POCT. Through a joint venture, the company entered the field of molecular diagnostics by commercializing Enigma ML equipment systems and related diagnostic kits. The Enigma ML automation platform integrates multiple detection processes such as nucleic acid extraction and real-time quantitative PCR, and also combines fully automated solutions for data processing, data analysis, and data transmission, and has the advantages of high-sensitivity detection and POCT products. 4. Focus on the expansion path of biochemical leaders Leadman is a leader in the domestic biochemical diagnosis industry, and is a first-tier supplier in China along with companies such as Kehua Biotech, Diri Medical, Mike Biotech, Meikang Biotech, and Zhongsheng Beikong. The biochemical diagnosis industry has a large stock market, is relatively mature, and the growth rate is low, so it is difficult for the industry to give leading companies room to continue to grow rapidly. Therefore, we see that the leaders in the biochemical field are basically expanding horizontally in technology platforms and business lines. Fields such as chemiluminescence, molecular diagnosis, and independent medical laboratories are all the directions they have chosen. Chemiluminescence is currently the largest market segment in the domestic clinical IVD industry. At the same time, the growth rate has maintained a high level, with an average annual average of about 20-25%. The market share is highly monopolized by foreign investors. Under the general logic of import substitution, we judge that the current investment logic of the chemiluminescence industry must depend on implementation. In this process, reliability in technology and quality is paramount, and price advantage comes second. The first-mover advantage of domestic chemiluminescence suppliers such as Sino-Singapore Industry, Beijing Kemei, and Beiaikang is quite obvious. Mike Biotech's chemiluminescence business has begun to take shape. Compared to that, Leadman has been in the chemiluminescence business for a short time. Currently, it is still in a relatively early stage. Judging from the current company's business progress, equipment sales have begun, and the reagent product hierarchy is constantly improving. Combined with the company's market positioning, we think it is very likely that Leadman will copy the growth path of other companies. 5. Profit forecast and rating: The company's performance is in line with expectations, and we are optimistic about the company's future development direction: Desai Systems and Desai products improve the company's biochemical diagnostic product line and form a strong synergy effect; CI1000 and IDS chemiluminescence analyzers target different customers, and listing sales will drive the sales volume of the company's independent development of supporting reagents; entering the field of molecular diagnostics through the commercialization of Enigma ML equipment. We expect the company's 2015-2017 EPS to be 0.35 yuan, 0.42 yuan, and 0.48 yuan, respectively, and the corresponding PE is 39 times, 33 times, and 29 times. First coverage, giving a “recommended” investment rating.