The company announced the 2015 three-quarter report. In the first three quarters of 2015, the company achieved operating income of 994 million yuan, an increase of 31.12%; the parent company's net profit was 78.86 million yuan, down 19.91% year on year; net profit after deduction was 59.21 million yuan, down 2% year on year; EPS was 0.12 yuan. In a single quarter, revenue for the third quarter was 366 million yuan, up 37.02% year on year; net profit was 18.59 million yuan, down 51.44% year on year; net profit after deduction was 10.5 million yuan, down 45.63% year on year. Key takeaways 1. The platform structure is beginning to take shape, and fluctuations in investment income affect performance expectations. Since 2013, we have noticed that the company's revenue side has maintained a rapid growth trend. As a leader in the domestic genetic diagnosis industry, revenue has maintained 25-30%, or even higher growth. However, net profit fluctuated quite drastically. In 2013, the company sold most of the shares in Anbiping (FISH Technology Platform) and received huge investment income of more than 80 million yuan; in 2014, the company replaced the shares of its subsidiary Guangdong Dayuan with shares in Oasis Biochemical, which obtained investment income of 22.18 million yuan, and transferred Foshan Daan Medical, Foshan Damai Biotech, and Taizhou Daan Medical, plus the establishment of several new subsidiaries in the fourth quarter, which generated a total investment income of more than 70 million yuan. Confirmation of return on investment More than 57 million yuan. The company has clearly proposed the function of an entrepreneurship platform in its previous regular financial report. Currently, the number of participating holding subsidiaries under the company has increased dramatically. By encouraging the company's employees to invest in the establishment of subsidiaries, listed companies participate in the investment, which has an incentive effect on the company's executives and technical personnel. Therefore, it is understandable that while the company maintains steady and rapid growth on the revenue side, due to the drastic increase in the number of its participating holding subsidiaries, equity adjustments will inevitably affect the company's overall profit. 2. It is beneficial to the long-term development of the company. The startup platform built by the company is beginning to take shape. Future equity adjustments to participating subsidiaries will increase uncertainty over the company's performance expectations, but in the long run, we think the benefits outweigh the disadvantages. This year, Darryl Biotech, a subsidiary of the company, was listed on the new third board. The company's main business is time-resolved fluorescence products for eugenics and nurturing. At the same time, it has continuously obtained new product certificates in the field of chemiluminescence, including multiple reagent certificates for hepatitis B surface antigen, e antigen, cancer embryo antigen, alpha-fetoprotein, and prostate-specific antigen. At present, the company has obtained more than 10 chemiluminescence product certificates, involving infectious diseases, tumors, and hormones. Although Dari Biotech's main business currently focuses on time-resolved fluorescence technology platforms, it is also likely to become a vital force in the field of chemiluminescence in the future. Taking Dari Biotech as an example, we judge that in the future, under the institutional arrangement of the company's startup platform, company executives may emerge through years of accumulation in the industry. They will enable Daan Gene to build an entire industry chain with clinical genetic diagnosis as the core, and develop into an innovative platform company that touches on many new technology fields, which is conducive to long-term development. 3. The fixed increase plan shows confidence. The company resumed trading on October 14 and announced a fixed increase plan. This is the first financing in more than 10 years since the company went public. On the same day, we released the review report “Announcing a Fixed Expansion Plan to Dramatically Increase the Construction of a Genetic Diagnosis Technology Platform”, which emphasizes our core views on this matter: First, financing at key points in industry development. As a leader in the domestic genetic diagnosis industry, this financing is of great significance to the company and the industry. Second, the listed companies' internal subscriptions were increased, and executives and employees participated in financing totaling 1.5 billion yuan in real money. The lockdown period was 3 years, demonstrating firm confidence. Third, increasing genetic diagnosis technology and R&D platform construction to seize the core competitiveness of the IVD industry, the company maintained about 10% or more investment in R&D compared to the whole year, built a technology platform that takes into account depth and breadth, and consolidated the competitive barriers in the industry. Profit forecast and investment rating: Based on the consideration of some fluctuations in the company's future investment income, we adjusted the company's 2015-2017 EPS to 0.20 yuan, 0.24 yuan, and 0.30 yuan, respectively (previously 0.26 yuan, 0.33 yuan, and 0.40 yuan), corresponding to the current stock price valuation 278 times, 231 times, and 181 times the current stock price. Based on our confidence in the industry and the company's position in the industry, we maintain a “Highly Recommended” rating and have been steadfastly optimistic about the company's investment value for a long time. Risk tips 1. Product development and marketing risks.