Event: The company released its 2018 semi-annual report. The company achieved operating income of 8.52 billion yuan in the first half of the year, an increase of 30.4% over the previous year, net profit of 185 million yuan, an increase of 29.8% over the previous year, and realized net profit of 182 million yuan after deduction, an increase of 23.5% over the previous year. At the same time, the company expects the company's net profit range for the first three quarters of 2018 to be 200 million to 260 million, an increase of 0% to 30% over the previous year. Comment: The company's performance was in line with expectations, the overall operating conditions were good, and the second quarter performance was outstanding. The company's gross profit margin for the first half of the year was 9.93%, which remained stable compared to the same period last year; the company's financial expenses rose 103% year on year, but marketing and management expenses were well controlled. The combined cost rates of the two fell 32 bps from the same period last year; the company's accounts receivable turnover days and net operating cycle days were 117 and 90 days, respectively, which remained stable compared to the same period last year, highlighting the company's good management ability in the face of the overall extension of downstream accounts in the industry; 2018Q2 revenue and net profit increased 35% and 36% year-on-year respectively, significantly faster than the 25% and 23% growth rates in the first quarter. The performance of the endogenous sector was good, and the business growth in the Beijing region was rapid: in the second half of 2017, the company achieved a merger of three companies, Sichuan Rongjin Pharmaceutical, Zhejiang Shangyang, and Zhejiang Tonghan. The first half of 2018 achieved a total net profit contribution of 14.7 million yuan. After deducting this influence, the revenue and net profit growth rates of the company's endogenous portion were 19.5% and 19.5% respectively. Currently, the growth rate of the pharmaceutical business industry is less than 10%, and the company's endogenous growth has greatly outperformed the industry average. Referring to the company's parent company's profit statement, the parent company, which mainly distributes pharmaceuticals in Beijing, achieved a 23% increase in revenue. We believe that the sharp increase in grass-roots distribution business volume and the number of distribution types after Sunshine procurement was the main influencing factor in the high growth. The leading position of high-value cardiology consumables continues to be consolidated: in the first half of 2018, the total revenue of the company's 16 cardiology consumables businesses was nearly 4.7 billion dollars (with some internal offsets), and revenue increased by more than 20% year-on-year. Among them, the two device platform companies Jiashi Weizhong and Jiashi Guorun achieved 33% and 62% growth respectively; in the first half of the year, Jiashi Guorun and Johnson reached a partnership to become the only agent for electrophysiology products in the country, which is expected to increase the company's annual sales revenue by more than 1.5 billion yuan; at the same time, the company is also actively promoting cooperation with Medtronic and Abbott for intracardiac consumables Appropriate. Profit forecast and investment advice: We expect the company's earnings per share in 2018-2020 to be 1.36 yuan, 1.73 yuan, and 2.13 yuan respectively. We gave the company a PE of 20-25 times that of 2017, corresponding to the target range of 27.2-34 yuan, maintaining the “buy” rating. Risk warning events: the progress of business development in foreign port regions has not met expectations, and the risk of equipment price reduction due to industry policies;