Incidentally, the company announced a non-public offering plan. The plan is to raise 1.5 billion yuan in capital through the non-public offering, with a fixed price of 32.38 yuan/share. The number of shares to be issued is 46.324,900 shares. The target of the issuance is for company executives (chairman, general manager, deputy general manager, financial director) and employee stock ownership plans. Main opinion General view: As a leader in the domestic genetic diagnosis industry, Daan Gene has been financing for the first time in more than 10 years since it went public, which is of extraordinary significance. Genetic diagnosis is the most promising field in the IVD industry. High-throughput sequencing and individualized diagnosis and treatment technology are in their infancy and will bring huge market growth to the genetic diagnosis industry. Therefore, we judge that the investment logic of the genetic diagnosis industry may depend more on market value over a long period of time, and high valuation premiums will continue for a long time. The company's financing at a critical point in the development of the industry, and the participation of executives with real money in fixed increases will greatly enhance the market's confidence in the company's future long-term development in the genetic diagnosis industry. Specific comments: 1. All fixed increase plans are digested within the company, demonstrating firm confidence in the company's development. All of the current private offering plans were aimed at the company. Chairman He Yunshao, general manager Zhou Xinyu, and Deputy General Manager Cheng Gang each subscribed for 11.62 million shares, with a corresponding amount of 376 million yuan; Deputy General Manager Zhang Bin and Chief Financial Officer Zhang Weijie each subscribed for 4.63 million shares, with a corresponding amount of 150 million yuan; and the employee shareholding plan subscribed for 2.19 million shares, with a corresponding amount of 71.08 million yuan. The total amount was 1.5 billion yuan, and the total number of shares issued was 46.32 million. The lockdown period was 36 months. The company's executives and employees participated in this fixed increase, demonstrating great confidence in the company's long-term future growth. 2. Significantly increase the construction of genetic diagnosis technology platforms. Looking at fund-raising projects, there are three main ones, including fluorescence PCR product line expansion, R&D center construction, and supplementary working capital. The proposed investment amounts for the three projects are 490 million yuan, 440 million yuan, and 570 million yuan, respectively. (1) The company is a leader in the field of clinical PCR in China, pioneered the development of fluorescence PCR products in China, and is used for classification and quantitative testing of viruses. Judging from the development of the application side, in addition to being applied to virus detection, fluorescence PCR technology has now also become one of the main technical methods for clinically guiding individualized drug use. The company also obtained genetic mutation detection reagents such as EGFR and HER2 a few years ago. We believe that in the next 3-5 years, this field will usher in a period of rapid growth with the widespread application of targeted cancer therapy (monoclonal antibodies, small molecule targeted drugs, cell therapy, etc.). At the same time, the concept of individualized medication is gradually deepening in clinical practice, and treatments in other fields will also achieve individualized drug use based on genetic diagnosis technology (the application of anticoagulants is already combined with genetic diagnosis technology, and there will be more such fields in the future). Daan Gene has an obvious advantage in the field of fluorescence PCR. At the same time, it is currently Daan Gene's main source of profit. The construction and investment of the product line will provide the company with an impetus for long-term development. (2) Research and development is essential for IVD companies. In particular, building an in-depth technology platform will enable the company not to be eliminated from the market when new technology is replaced. Looking at the development of Daan Gene, basically every technology-advanced company has taken the lead; this is inseparable from the company's huge investment in research and development. From 2006 to now, the company's R&D investment has grown from about 10 million to close to 120 million yuan. The company's R&D investment has remained around 10% compared to the whole year, which is a high level in the IVD industry. Of this fixed increase, 440 million yuan will be used for the construction of an R&D center. Undoubtedly, this further strengthens our confidence that the company will be in a leading position in technology in the future. 3. The approval process takes a certain amount of time. The fixed increase plan needs to be approved by the Ministry of Education and the Ministry of Finance before it is passed by the Securities Regulatory Commission and the shareholders' meeting. The company's previous equity incentives have gone through the same process, and it is expected that the approval process for this fixed increase will not take too long. 4. The market fluctuated during the suspension period, and the long-term outlook was firm. From a market perspective, the company suspended trading on July 20, and the Shanghai Composite Index was 3,992 points on the same day. During the company's suspension, the Shanghai Stock Exchange index fell by about 18% cumulatively. The company's stock price was 43.9 yuan when trading was suspended, and there is a risk that the stock price will fluctuate after resuming trading. We are unable to grasp the market operation in the next few days, so the timing of the company's intervention also needs to be further observed. However, in the long run, we are firmly optimistic about the investment value of Daan Gene, so we will not change the highly recommended investment rating for the company. Profit forecast and investment rating: We maintain our 2015-2017 earnings forecast of 0.26 yuan, 0.33 yuan, and 0.40 yuan per share, corresponding to the current stock price valuation of 162 times, 134 times, and 110 times. The company currently has a total share capital of 659 million shares, which is about 705 million shares after the issuance. The total share capital increased by about 7%, and the dilution effect is not obvious. We maintain a “Highly Recommended” rating. Risk warning 1. Product development and marketing risks.