The board of directors of the incident company approved the second phase of the equity incentive plan and plans to grant a total of 5.4 million shares of equity to incentive targets, accounting for 1.05% of the company's total share capital at the time the plan was signed. The total number of incentive recipients is 53, covering the company's senior management, middle management, and core technical (business) personnel. The exercise price for stock options granted by the incentive plan is $13.49, and the grant price for restricted shares is $6.75. The review performance has gradually recovered, and future increases can be expected: according to the company's performance report, the company's performance continued to recover in the fourth quarter of 2017, and revenue and net profit increased by 32% and 18%, respectively. For the whole year, the company achieved revenue of 1.61 billion yuan, an increase of 15% over the previous year; net profit of 219 million yuan, a decrease of 6% over the previous year; and net profit of the company's net profit of 207 million yuan, a decrease of 4% over the previous year. We believe that judging from the quarterly data, the company's revenue growth rate has rebounded and the decline in profit has narrowed, indicating that the company's business is improving continuously after active adjustments; the company's winning bid for new contracts such as Guizhou biochemical instrument procurement will bring about more costs and expenses in the current period, and its reagent procurement performance reflects a delay effect; in 2017, the company actively laid out high-quality channel resources, and has completed the holding of Xi'an Shenke, Guangdong Xinyou, Guangzhou Kehua, Nanjing Yuanheng, and Jiangxi Kerong, further increasing its influence on terminals. It is expected that there will be a double increase in performance and collaborative testing in the future. Increment. The release of the equity incentive plan effectively stimulates the subjective activism of the team: with the stability of the executive team and the company's operations, the company promptly put equity incentives on the agenda. We believe that the current equity incentive plan covers a wide range of coverage, and that the performance targets (100% completion in 18-20, which requires revenue and profit growth rates of 10%, 25%, and 45%, respectively, compared to 17, respectively, while personal performance is assessed) are set reasonably. Currently, stock prices are at a low level. We believe this incentive is expected to achieve good results. This incentive is expected to enhance team stability and cohesion, coordinate the interests of shareholders and the core team, stimulate the team's subjective activism, and enhance the company's pioneering ability in the field of in vitro diagnostics. Investment recommendations As the effects of the company's adjustments become apparent, and the stability of the core team and incentives are in place, the company's ability to grow is expected to recover. Based on the above assumptions, we forecast the company's 2017-2019 EPS to be 0.43, 0.50, and 0.57, with year-on-year growth of -5%, 17%, and 14%. If the merger company's performance increases strongly, there is a possibility that it will exceed expectations. Maintain the “Overweight” rating. Risks suggest that the biochemical and enzymatic exemption business market as a whole has entered a bottleneck period, and growth is weak; chemiluminescence and molecular diagnostics businesses are growing less than expected; the overall price reduction risk of the industry; the increase in the share of distribution and channel businesses has led to a decline in profit margins and an increase in account periods