Incident: On July 3, 2017, the company issued an announcement: using its own capital of 4.94 million yuan to increase the capital of Coredy, and to acquire Yuan Mingli's 24.52% shares with 4.89 million yuan, Guan Wei with 2.4 million yuan to acquire Guan Wei's 12.04% shares, and Wang Chen to hold 0.75% of Coredy's shares with 150,000 yuan. After the transaction was completed, the company held 62.08% of Coredi's shares, and Coredy became a holding subsidiary of the company. Comment: Acquiring a hemodialysis consumables manufacturer in central China to break geographical business restrictions: The target of the acquisition, Coredi, is mainly engaged in the production and sale of hemodialysis powder. The current market is mainly concentrated in Hunan, Hubei and surrounding provinces and cities. In 2016, Coredy achieved revenue of 4.6957 million yuan. After acquiring Coredi, the company completed the layout of the hemodialysis consumables production base in central China, effectively shortening the transportation radius of hemodialysis consumables in central China. At this point, the company has basically completed the layout of hemodialysis powder manufacturing bases in South China, East China, Central China, North China, Northeast China, Southeast China, etc., and the layout of hemodialysis consumables is getting better and better. The company's entire hemodialysis industry chain layout is becoming more and more perfect, and the leading position in the industry is gradually becoming apparent: focusing on “product manufacturing+channel construction+medical service”, the company lays out the entire industry chain for the hemodialysis industry. On the upstream production side, the company has deployed hemodialysis machines, dialysis machines, hemodialysis powder, hemodialysis lines, disinfection products, etc. Among them, hemodialysis powder has basically completed the layout of production bases nationwide; midstream distribution companies have continued to promote marketing channel layout. Recently, the company acquired 49% of the shares of subsidiary Shenbao Medical; downstream service-side companies have completed acquisitions such as Qingyuan Kanghua Hospital and Xiantao Tongtai Hospital, etc., and the hospital is currently running well. Overall, the layout of the company's entire industry chain is progressing steadily, and its leading position in the industry is gradually becoming apparent. The dual main business of “hemodialysis business+monitoring business” will drive the company's high internal growth of 30% in the future: the company's main business is mainly divided into two major parts: hemodialysis and monitoring. Among them, the hemodialysis business has benefited from the industry's high growth of more than 30% and the company's entire industry chain layout. It is expected that the company's hemodialysis business will maintain higher growth than the industry; monitoring business companies are expected to maintain steady growth through reasonable expansion of maintenance business and overseas markets. Driven by the two main industries of “hemodialysis and guardianship”, the company is expected to maintain high endogenous growth of more than 30% in the future. Profit forecast and valuation: According to our estimates, the company's EPS in 17-19 was 0.70, 0.95, and 1.29 yuan, respectively, corresponding to 40, 29, and 21 times PE. Considering performance growth and the scarcity of the entire blood penetration industry chain layout, the company was given 50 times PE, with a target price of 35 yuan, maintaining a “highly recommended” rating. Risk warning: The implementation of the company's extension fell short of expectations, and the risk of changes in national policies; market competition intensified.