Investment highlights Investment events: The company announced the 2020 quarterly report forecast: it is expected to achieve a revenue growth rate of 5%-7%; net profit of the mother is 17.2781 million yuan to 25.9172 million yuan, down 40%-10% from the previous year. Business progressed steadily in the first quarter, with positive revenue growth. The company's overall operations remained stable in the first quarter of 2020. Revenue increased by 5%-7% year on year, business progressed steadily, and revenue grew positively. On the profit side, net profit is expected to fall by 40%-10% year on year, and the median value is expected to fall by 25%. The significant year-on-year decline in profit scale was mainly affected by equity incentive expenses. The company's equity incentive expenses during the reporting period were about 4.73 million yuan, compared to 0 yuan in the same period last year. If equity incentive expenses were simply added back, the net profit for Q1 in 2020 was about 20.081 million yuan to 306.472 million yuan, an increase of about -23.57% to 6.43% over the previous year, with a median value of -8.57%. Both revenue and profit data indicate that the company's business progressed steadily in the first quarter of 2020. Demand for the smart healthcare business is strong, and rapid restorative growth began in March. The company is a high-quality enterprise in the medical IT industry. The COVID-19 pandemic has brought good development opportunities to the industry and is beneficial to the company's business development. The market expansion of the three major platforms launched by the company, including an intelligent open platform based on clinical data, a common open platform for the Internet of Things, and an artificial intelligence platform, is expanding well. The market share of related products has increased in various ways, and the company is actively expanding the medical community market and opening up new market fields. Judging from orders, the company's smart medical business orders have achieved restorative growth since March. After the peak period of COVID-19 prevention and control, business demand began to pick up. In 2020, the medical IT industry was in a period of high prosperity and market demand was strong. The company's smart medical business is expected to achieve rapid growth throughout the year. Convertible bonds have been approved by the Securities Regulatory Commission, and the company will accelerate product development innovation and marketing channel construction. The company plans to issue convertible bonds, with a total amount not exceeding $817 million. Fund-raising projects include Internet+artificial intelligence medical innovation operation service projects, marketing system expansion projects, next-generation smart medical application research and development projects based on artificial intelligence and microservice cloud architecture, and supplementary liquidity, with investments of 339 million yuan, 131 million yuan, 170 million yuan, and 177 million yuan respectively. Most of the capital raised in convertible bonds this time will be used for new product development and marketing system construction. The implementation of the fund-raising project will enrich the company's product system, enhance the company's marketing service capabilities, and drive the company's long-term sustainable development. Investment advice: The company expects EPS of 0.25/0.35/0.51 yuan in 2019/2020/2021, corresponding to PE about 49.24/34.90/24.06 times, giving it a “buy” rating. Risk warning: business development falls short of expectations