Incident: The company signed a “Stock Acquisition Intent Agreement” with Guowei Dahui Fund, the controlling shareholder of Beijing National Health Reproductive Hospital. The company plans to acquire no less than 20% of the shares of Guowei Dahui Fund held by Guowei Dahui Fund. At the same time, on June 18, 2020, the company received the “China Securities Regulatory Commission Administrative License Application Acceptance Form” issued by the China Securities Regulatory Commission to acquire not less than 20% of the shares in China's Health and Breeding Hospital in cash, and assisted reproduction went to another city. The company plans to acquire no less than 20% of the shares of Guowei Dahui Fund in Guowei Reproductive Hospital and pay in cash as consideration. Beijing National Health Reproductive Hospital is a shareholding enterprise of the Institute of Science and Technology of the National Health Commission. It is a research result transformation base and clinical medical center of the research institute, and has a strategic cooperative relationship with the National Key Laboratory of Male Reproductive Health. The main business directions are infertility treatment, reproductive health care, gynecological diseases, male diseases, and health services. As of January to May 2020, the company achieved a total sales revenue of 165,000 yuan, net profit of 1,034,000 yuan, total assets of 21.1019 million yuan, and net assets of 175.314 million yuan. (The above data has not been audited). We believe that this acquisition is an important layout of the company's assisted reproduction strategy, and that the Beijing National Health Reproductive Hospital is of great significance to the company's overall assisted reproduction industry chain in terms of scientific research capabilities and brand value. The emergency first aid platform started the company's new growth, and hand anesthesia and intensive care developed steadily. 1) Under the pandemic, intensive care resources are tight, and it is imperative for the ICU system to improve efficiency. Under the epidemic, ICU intensive care resources are tight, and the clinical information system for intensive care auxiliary diagnosis has outstanding capabilities in improving efficiency and saving manpower. 2) The country accelerates the first aid platform based on the “five major centers”, and the “531” benchmark project highlights competitive advantages. The policy requires that by 2020, all parts of the country gradually establish a critical illness system based on the “five major centers”. The Suzhou model regional smart first aid platform has become a benchmark project. It is replicable and promoted throughout the country. The company participated deeply in the construction of the “531” project in Suzhou and contributed to the construction of emergency first aid. The company undertook the project construction of a business support platform for the medical rescue emergency command platform in Jilin Province and won the bid for the “Kunshan Regional Integration Platform (including emergency care, five major specialties, and specialist data application systems)” project, winning a bid amount of 15.6 million yuan, deepening the exploration and application of specialist data. Enter the blue ocean market with high barriers to assisted reproduction and build an ecosystem for the entire industry chain with sufficient capital. 1) The infertility rate continues to rise, and assisted reproduction has become a blue ocean market. According to iResearch's statistics, it is estimated that by 2023, the prevalence of infertility in China will reach 18.2%, the number of infertile couples will reach 50 million, the penetration rate of China's assisted reproduction market in 2018 was 7%, and the penetration rate of the US market during the same period was over 30%. As the penetration rate increases in combination with China's population base, assisted reproduction has become a blue ocean market. 2) Assisted reproduction licenses set a high threshold, and high-quality private institutions have potential for development. The assisted reproductive services market in China is strictly regulated, and the number of licences is limited, making it difficult to apply for a new application. In the future, when the market penetration rate rises and licenses are issued in accordance with national regulations, the supply of top public hospitals will be in short supply, and there will be an increase in ranking time, and some high-quality private institutions will unleash their great potential for development. 3) Hainan Mary Hospital and Beijing National Health Breeding have been acquired one after another to create an ecosystem for the entire assisted reproduction industry chain. The company acquired 51% of the shares of Mary Hospital and 20% of the shares of Beijing National Health and Reproductive Hospital to enter assisted reproduction. In the future, it will continue to increase the number of cycles and expand the market size, and expand the market size, and extend to the middle of the industry chain to provide pre-pregnancy and eugenics services. At the same time, it also uses its own informatization advantages to create a national assisted reproduction cloud platform to provide more possibilities for derivative services. We believe that sufficient capital strength will accelerate the company's industrial chain layout in the assisted reproduction market and expand the scale of the assisted reproduction cycle with assisted reproduction medical institutions as the center. Maintain a “buy” rating. We forecast that the company will achieve revenue of 4.60, 603, and 749 million yuan in 2020-2022, with a year-on-year increase of 38.2%, 30.9%, and 24.3%, and net profit of 1.37, 1.81, and 247 million yuan, and a year-on-year increase of 192.3%, 32.4%, and 36.0% over the previous year. Maintain a “buy” rating. Risk warning: Assisted reproduction business is progressing below expectations; the national construction process for emergency care and first aid falls short of expectations; and there is a risk that key assumptions may be wrong.