Key investment points: 1. The company announced the 2017 three-quarter report: the first three quarters achieved revenue of 617 million yuan, a year-on-year increase of 34.81%; realized imputed net profit of 55,386,600 yuan, an increase of 11.17% over the previous year, and net profit attributable after deduction of 508.818 million yuan, an increase of 2.20% over the previous year. Slightly below expectations. 2. The company announced an investment of 9 million yuan to transfer 18% of the shares in Guangdong's major supply chain. Ping An's view: Business scale continues to increase, price reduction factors have moved downward, and gross margin has rebounded: Celis Q3 achieved revenue of 257 million yuan in a single quarter. The scale of business continued to expand by nearly 60 million yuan compared to Q2, and the promotion work was effective. Equally important, the decline in gross margin caused by hospital fee price cuts in the first half of the year eased somewhat in Q3. The gross margin for a single quarter reached 34.34%, up 2.77PP from Q2. We think this may be related to the further downward transmission of price reduction factors, and it is expected that Q4 gross margin will rise further. The expense ratio increased during the first three quarters. Among them, the sales expense ratio was 8.48%, up 0.68PP year on year; the management fee rate was 7.57%, up 0.43PP; and the financial expense ratio was 1.04%, down 0.29PP year on year. Participate in Guangdong Yida Supply Chain and cooperate to promote the SPD system: the company invested 9 million yuan to transfer 18% of Guangdong Yida Supply Chain Company's shares. A comprehensive and systematic hospital logistics extension management system (SPD system) with the core products of the large supply chain as a set of comprehensive and systematic hospital logistics extension management systems (SPD systems). The SPD system can surpass traditional hospital software such as HIS to manage, track and trace hospital consumables, and achieve comprehensive consistent management between hospitals and suppliers, departments and departments. According to the company's promise, in 2018-2020, non-net profit from large supply chains will reach 250,350,000, and 4.9 million yuan. In other words, the SPD system will be marketed at a growth rate of not less than 40% and will be deeply tied to hospitals. The national distribution continues to advance, and contracts have been signed in many places: since listing for a year, the company has always been committed to national expansion and distribution, and has now set up bases in more than 10 provinces and cities across the country, including: Shandong, Jiangxi, Henan, Fujian, Chongqing, Guangdong, Heilongjiang, Tianjin, Guangxi, Beijing, Jiangsu, Chengdu and Henan. Among them, Shandong, Jiangxi, Guangxi, and Beijing have already received orders. As medical reform progresses, many hospitals at different levels form medical consortia, and hospitals share laboratory departments, and the clinical examination center model to achieve mutual recognition of test results has been piloted in many places. Celis has also won bids to build local inspection centers in Huangshi, Hubei, Jiaozhou, Shandong, and Qingdao, Shandong. Give full play to the company's advantages in medical information construction and upgrade the packaging of the hospital laboratory department to the packaging of the medical consortium laboratory department. The intensive IVD layout provider has steadily expanded throughout the country and maintained its “recommended” rating: the company started in the Lianghu region and is leading the country in using intensive supply methods to provide various types of reagent consumables for hospital laboratory departments. The company promptly completed its IPO in the midst of IVD channel integration and began a path of national expansion. Currently, it has deployed in more than 10 provinces and cities, and packaging orders from major hospitals have been placed over time. We believe that the IVD channel is still very scattered, and there is still huge room for integrated development. The company is expected to accumulate and become one of the leaders in the industry. Due to capital dilution factors, the 2017-2019 EPS forecast was adjusted to 1.26, 1.69, and 2.23 (previously 1.76, 2.36, 3.12) yuan to maintain the “recommended” rating. Risk warning: Channel expansion falls short of expectations, policy risks.