Semi-annual results remained stable. In the first half of 2016, the company achieved revenue, net profit after deduction of mother, and net profit after deduction of 7.62, 1.15, and 84 million yuan, respectively, year-on-year increases of -6.20%, 0.44%, -11.49%, and EPS of 0.11 yuan, continuing the trend of the first quarter and remaining stable. Gross margin was basically the same. High expenses during the period affected performance by business. Looking at performance by business, the company's formulation variety grew steadily: cephalosporin drug revenue increased 9.76%, gross margin declined slightly, gastrointestinal revenue increased by 12.45%, and gross margin increased slightly. The company's pharmaceutical products overcame pressure, achieved good bid results, and maintained a good price system in the context of lower prices in tenders. The API and intermediates business declined 17.68% due to the impact of the industry environment. The company's overall gross margin was relatively stable, but high expenses during the period had an impact on net profit. The company's sales expenses, management expenses, and financial expenses totaled 205 million yuan during the reporting period, accounting for 11.65%, 8.88%, and 5.82% of revenue, respectively, and was at a high level overall. Approval has been obtained for the company's non-public offering of shares to launch a new phase of Internet healthcare with fixed increases, and related inquiries are currently being carried out. The proposed non-public offering will raise no more than 3 billion yuan, and the holding shareholder Dongfang Tongzheng's subscription amount will not be less than 1.6 billion yuan, demonstrating confidence in the company's development. The main project of this fixed increase is telemedicine, which will be carried out in Chongqing, Sichuan and other places. The company will continue to develop high-quality medical resources, collaborate with the relevant experience and resources of Chongqing Yade and Jinshengda Air Hospital, vigorously carry out telemedicine at the grassroots level in line with the major trend of hierarchical diagnosis and treatment, and at the same time actively participate in the restructuring of public hospitals, further expand health services and seize excellent medical resources to help the company's “pharmaceutical+medicine” two-wheel drive strategy, and open a new chapter in the company's development. First coverage, the “increased holdings” rating was given. The company's 2016-2018 EPS is expected to be 0.22, 0.28, and 0.34 yuan respectively, and the corresponding PE is 62, 50, and 41 times, respectively. As a leading explorer of Internet healthcare, the company has found a good profit model and should be given a certain valuation premium. Based on 65-70 times PE in 2017, the reasonable price range for 6-12 months is 18.16-19.56 yuan, and the first target price is 19 yuan. For the first time, it covered the “increased holding” rating. The risk suggests that progress in the distribution of medical services is falling short of expectations.