1. Event Overview Recently, we surveyed the top 100 groups and exchanged views with company executives on strategic planning and transformation business development. 2. Analysis and judgment cooperate with Zhejiang Cancer Hospital to build an international medical center company and Zhejiang Cancer Hospital to sign the “Zhejiang Xizi International Medical Center Cooperation Agreement” to jointly provide services in the entire cancer treatment industry chain. Zhejiang Cancer Hospital has strong strength. It is the only top three oncology hospitals in Zhejiang Province, ranking 7th in the country. Zhejiang Cancer Hospital currently has 1,500 beds, which is far from meeting actual demand. Therefore, in addition to providing the company with personnel and technical resources quickly, this cooperation can also effectively distribute patients and relieve the pressure of insufficient medical resources in public hospitals. Laying out the entire oncology industry chain, revenue is expected to grow rapidly. The company's plan to establish a cancer treatment center is progressing steadily, and it is expected to be put into use in 2017. The first and second phases have invested 500 million yuan, and it is planned that a total of 800 beds (300 beds in the first phase) will be put into use step by step. In terms of profitability, international medical centers are positioned in the middle and high-end, and the cost of cancer treatment is high compared to other major diseases, and the annual income for each bed is about 700,000 to 1 million yuan. The estimated annual revenue for the first phase of the 300-bed phase is 210 million yuan. If all 800 beds are put into use, the annual revenue is 560 million yuan, contributing about 67 million yuan in net profit. Traditional business operations are stable. Hangzhou Department Store, a subsidiary of a marginal company that provides high quality property security, entrusts management to Yintai Department Store. The operation is stable and guarantees an annual profit of 100 million yuan. The company's properties, including Hangzhou Department Store, Hangzhou Grand Hotel, and Xizi International Medical Center (30% equity), are all located in prime locations in Hangzhou, with an equity area of 260,000 square meters and a conservative revaluation value of about 9 billion yuan. The corresponding company currently has a market value of 6 billion yuan, which has a certain margin of safety. 3. Profit forecasting and investment recommendations The company's traditional business is stable, well-funded, and has a high margin of safety. We are optimistic about the company's transformation in the medical direction, and the cooperation with Zhejiang Cancer Hospital has greatly shortened the cultivation period of Xizi International Medical Center. The company's 2015-2017 EPS is expected to be 0.40 yuan, 0.44 yuan, and 0.49 yuan, and the corresponding PE is 46.7 times, 42.17 times, and 38.28 times, respectively. First coverage, giving a “Highly Recommended” rating. 4. Risk warning: Transformation projects are not progressing according to expectations.