Incident: The company announced on March 14 that it will sign a “Cooperation Agreement on Joint Investment and Establishment of Fujian Fujun Gene Technology Co., Ltd.” with Shenzhen Fujin Gene Technology Co., Ltd. and Fujian Jinqiang Investment Partnership (Limited Partnership). The company invested 51 million yuan, Shenzhen Fujin invested 30 million yuan, and Fujian Jinqiang invested 9.5 million yuan to jointly establish Fujian Fujun Gene Technology Co., Ltd., with a shareholding ratio of 51%; in addition, the company's overseas subsidiary Xi Long USA will invest about 24.56 million US dollars with its own capital FulgentTherapeutics LLC received 15,810,810 shares of the target company, accounting for 15% of the total shares of the target company. Develop genetic testing and diagnosis services and enrich the variety of in vitro diagnostic products. With the development of human genomics, genetic testing is one of the fastest growing segments of the in vitro diagnosis industry in recent years. Genetic diagnosis can not only track the pathways of infectious diseases, but also predict the risk of individualized diseases, effectively predict various diseases such as cancer, diabetes, and Down syndrome, thus providing effective help for later prevention and treatment. Therefore, as an important development direction in the country, genetic diagnosis plays an extremely important role in the prevention and diagnosis of diseases, and has good market prospects and development space. This foreign investment business is one of the important steps in implementing the company's strategic transformation. It will help the company break through the existing in vitro diagnostic reagent business type and advance into the more advanced field of genetic testing. It will play an important role in forming a complete in vitro diagnostic reagent industry chain and enhancing the company's competitiveness in the field of in vitro diagnostic reagents. Full entry into the field of in vitro diagnostic reagents. The company has entered the field of in vitro diagnostic reagents through epitaxial mergers and acquisitions, continuously enriching product types and industry segments. In 2015, the global in vitro diagnosis industry was 58.8 billion US dollars, and the compound growth rate in 2011-2016 was 5%, while China's in vitro diagnosis market is about 50 billion yuan. The average growth rate for the next five years is expected to be 15%-20%. China's population accounts for about 20% of the world's total population, yet the in vitro diagnosis market size accounts for only about 10%. Diagnosis costs in developed countries account for 20% -30 of the total medical expenses, while China's economy is growing at less than 10%. The per capita usage of in vitro diagnostic products in developed countries is only 1/16 of the per capita use of in vitro diagnostic products in developed countries. With development, rising income levels, and population aging, there is huge room for growth in China's in vitro diagnostic industry in the future. E-commerce platforms support the company's performance growth in the short to medium term. The company established an e-commerce division in 2015, and built two e-commerce platforms, “Dr. Mao” laboratory chemical reagents and “paid network” chemical raw materials, and put into operation within the fourth quarter of last year. The two platforms operate in self-operated B2C and B2B platforms, complementing and complementing each other. They will integrate the company's channel resources with warehousing and logistics distributed in major cities to create a comprehensive online and offline sales system for the company, supporting the company's performance growth in the short to medium term. The market size of laboratory chemical reagents in China is about 10 billion yuan, and life science experimental reagents are about 10 billion yuan. They are all major markets for online shopping platforms for chemical reagents. The company is expected to replicate Sigma-Aldrich's successful path of epitalization and e-commerce. Valuation and ratings. We predict that the company's 2015-2017 EPS will be 0.43 yuan, 0.64 yuan and 0.82 yuan respectively, corresponding to the closing price of 30.66 yuan on March 14, 2016. The PE is 72X, 48X and 37X respectively. The company continues to enter the field of in vitro diagnostic reagents through epitaxial mergers and acquisitions, and continues to enrich and optimize product types and structures. In the future, it will continue to benefit from the huge growth space of the industry. At the same time, the endogenous e-commerce platform will effectively hit the “pain points” of laboratory reagents, and is expected to replicate industry giant Sigma- in China Aldirch's path to success has consolidated its leading position in the domestic industry and maintained its “buy” rating. The target price for 6 months is 40.00 yuan. Risk warning. Risk of entering the field of genetic diagnosis falling short of expectations; risk of e-commerce platform business development falling short of expectations; risk of sluggish demand in downstream markets