Incident: On the evening of August 27, the company released its semi-annual report. In the first half of the year, it achieved operating income of 14.529 billion yuan, an increase of 0.41% over the previous year, realized net profit of 840 million yuan, an increase of 26.41% over the previous year, and realized net profit deducted by 771 million yuan, an increase of 20.52% over the previous year. The performance was in line with expectations. Key investment points: Improving the profitability of industrial, commercial and trade businesses. The industrial sector achieved revenue of 2,867 million dollars, an increase of 64.99% over the previous year, and realized net profit of 368 million yuan, an increase of 33.39% over the previous year. Zhongjian Company is officially in operation, and industrial sales resources are well integrated. Sales of major drug varieties, Ruisu and atorvastatin, increased by 7% and 22%, while sales of APIs and antibiotic injections declined. The commercial sector achieved revenue of 8.917 billion yuan, a year-on-year decrease of 7.05%; achieved net profit of 260 million yuan, an increase of 18.77% year-on-year. After the promotion of the two-vote system in each province, low-margin allocation business declined, the share of pure sales business increased, and gross margin increased by 2 percentage points over the previous year. During the reporting period, the company acquired Zhuying Pharmaceutical, Jinlun Pharmaceutical, and Zhongrui Pharmaceutical, and Zhongrui Pharmaceutical, expanding their pharmaceutical commercial market share in Liaoning, Hebei, and Heilongjiang respectively. The international trade sector achieved revenue of 3.26 billion yuan, a year-on-year decrease of 5.99%, and a net profit of 429 million yuan, an increase of 43.56% over the previous year. Part of the medical device business is in the phase of alternating between old and new varieties, leading to a short-term decline. Maintain recommendation ratings. The company's share of pure commercial sales has increased and market share has been expanded through acquisitions. The industrial business is expected to grow rapidly as the consistent evaluation of core pharmaceutical varieties unfolds. The recent acquisition of some shares in Shanghai Xinxing and Great Wall Pharmaceutical has enhanced profitability while solving competition issues in the industry, and is optimistic about the company's development over the long term. Without considering the investment income of Unicom Group's capital reduction, the 2018-2020 EPS is expected to be 1.48, 1.73, and 2.05 yuan respectively, corresponding to the closing price on August 27. PE is 12, 10, and 8 times, respectively, maintaining the “recommended” rating. Risk suggests that the consistency evaluation of varieties such as atorvastatin calcium fell short of expectations; commercial expansion fell short of expectations