Incident: Celis released its three-quarter report. From January to September 2017, the company achieved operating income of 617 million yuan, an increase of 34.8% year on year; realized net profit of 55 million yuan, up 11.2% year on year; realized net profit deducted from mother 51 million, an increase of 2.2% year on year. In the third quarter, the company achieved operating income of 257 million yuan, a year-on-year increase of 56.77%; realized net profit of 0.183 million yuan, an increase of 33.52% over the previous year, and realized net profit without deduction of 175 million yuan, an increase of 28.7% over the previous year. Comment: In the third quarter, the company achieved relatively rapid growth in revenue and profit thanks to the combination of external mergers and internal growth. We estimate that the company's endogenous revenue growth has remained around 20%, which is basically the same as the previous quarter, and the pace of the company's business expansion has remained stable. Compared with the same period of previous years, the company's profit-side growth rate in the first three quarters was under pressure. The main reason for this was the rapid rise in operating costs (up 38.0% year on year), sales expenses (up 46.5% year on year) and management expenses (up 42.8% year on year). The company's operating profit margin for the first three quarters (13.1%) declined significantly compared to Q3 2016 (16.0%). Due to the nature of the inspection and distribution service industry where the company is located (profit level is low), slight changes in the cost and expense ratio will have a big impact on profit growth. We believe that the pressure on profit growth mainly comes from terminal price reduction pressure in some of the company's core business regions. In the future, as the company gradually shares the pressure of price reduction upstream, we believe there is a possibility that the company's profitability will improve. The trend of changes in inspection channels is unstoppable, and the company still has scarce value. We have discussed many times in our previous report that the intensification and serviceization of testing distribution channels is an irreversible trend, and IVD distribution service companies with intensive service capabilities are scarce in A-shares. The company is a leading enterprise in the domestic inspection intensive service area. With the implementation of its national layout and the results of extended cooperation being reflected on the performance side, we believe that the company can benefit from major trends in industry changes, gradually increase the scale of its business, and the company has room for improvement in market value. Investment recommendations and profit forecasts: We consider the increase in performance brought about by the combined revenue of newly established subsidiaries in various regions. If the business of each subsidiary can develop normally, the average EPS for 2017-2019 is 1.07, 1.31, and 1.61 yuan, with a year-on-year increase of 11%, 22%, and 23%. Maintaining the “Accumulation” Rating Risk Warning: Business expansion falls short of expectations, and the promotion of intensive services has led to a decline in the company's profit level