Key investment points: Optimistic about national expansion and business innovation announcement: 2017 revenue, net profit from the mother, and non-net profit withheld from the mother were 142.39, 2.64, and 264 million yuan, up 29.78%, 18.17%, and 19.60% year-on-year. Among them, revenue for the fourth quarter, net profit attributable to the mother, and non-net profit withheld by the mother were 40.17, 0.63, and 58 million yuan, up 31.76%, 19.49%, and 11.21% year on year. High revenue growth, Beijing accelerates growth, and profit is slightly lower than expectations. In 2017, the company's revenue, net profit, and non-net profit attributable to mother increased by 29.78%, 18.17%, and 19.60%. We estimate that benefiting from the new round of Sunshine procurement and distribution company selection in Beijing, the company's grass-roots distribution business is growing rapidly; at the same time, pharmaceutical and device wholesale continues to grow at a high level, and the pharmacy chain is relatively stable. Pharmaceutical wholesale revenue was 13.939 billion yuan, up 30.44% year on year, gross profit margin 9.22%, down 1.03 pp year on year; pharmaceutical chain 145 million yuan, up 0.95% year on year; pharmaceutical distribution was 152 million yuan, up 9.56% year on year. Among them, revenue in the Beijing region increased by 27.05% year on year, and revenue in the Beijing region increased by 10.67% in 2016, and the growth rate was faster than in 2016. In 2017, the company acquired Zhejiang Jiashi Tonghan and Zhejiang Jiashi Shangyang and entered IVD distribution. It also acquired Sichuan Jiashi Rongjin, and drug distribution entered Sichuan. The three companies had combined revenue of 569 million yuan in 2017 and a combined net profit of 1.53 million yuan. Among subsidiaries, high-revenue companies such as Shanghai Jiashi Minglun, Shenzhen Jiashi Kangyuan, Shanghai Jiashi Jiayi, Anhui Jiashi Yicheng, Sichuan Jiashi Xinshun, Beijing Jiashi Weizhong, and Shanghai Jiashi Guorun have maintained rapid growth. The financial indicators are sound... The company's gross sales margin was 9.70%, down 1.21pp year on year, sales expense ratio was 3.17%, down 0.57pp year on year, mainly due to low gross profit margin, low sales expense ratio, rapid growth in grass-roots distribution business, and Chengdu Rongjin. The management expense ratio was 1.13%, which was basically the same as the same period last year, and the financial expense ratio was 0.76%, a slight increase over last year. Net operating cash flow declined sharply, mainly due to high-value consumables, pharmaceuticals, and new hospital advances and security deposit payments. Monetary capital was 1,124 billion yuan, an increase of 41.24% over the previous year, mainly due to the company's strengthened accounts receivable management and increased recovery payments during the reporting period. Accounts receivable were 5.105 billion yuan, an increase of 25.12% over the previous year, slower than revenue growth. Optimistic about national expansion and commercial innovation. As a pioneer and model in expanding the distribution business of high-value consumables throughout the country, the company excels in business innovation and expansion. Chengdu Rongjin was acquired in the first half of last year, and a “strategic cooperation framework” was signed with the Sichuan Investment Promotion Bureau. With the brand advantages of state-owned listed companies and the resources of terminal professionals, the company actively cooperated and supported the platform bidding work of local device companies. Jiashi Jiayi, Jiashi Jiacheng, and Jiashi Jijian won the centralized distribution of hospital consumables, increasing the cooperation and stickiness of upstream and downstream customers; Jiashi Minglun, Jiashi Jiayi, and Jiashi Guorun actively sought national general products to deal with the two-vote medical reform in advance; and acquired two high-quality enterprises, Jiashi Shangyang and Jiashi Tonghan, entered the IVD industry. Profit forecasts and investment advice. We expect the EPS for 2018-20 to be 1.30, 1.65, and 2.03 yuan respectively. Referring to comparable company valuations, we gave the company 26 times PE in 2018, with a target price of 33.86 yuan, and a “increase in holdings” rating. Risk warning. The bid price reduction may have a certain impact on the company's business, the risk of unanticipated expansion, the risk of changes in circulation policies, and the risk of equity diversification.