Incident: The company signed an “Stock Acquisition Intent Agreement” with Beijing Guowei Dahui Medical Industry Fund to purchase no less than 20% of Guowei Dahui Fund's shares in Guowei Dahui Fund through cash payment. Key investment points: It is conducive to improving the company's assisted reproduction technology level and expanding the assisted reproduction business in Beijing. The full name of Guowei Regenerative Medicine Hospital is Beijing National Health Specialist Hospital Co., Ltd. Guowei Dahui Foundation holds 96.95% of the shares, and the Institute of Science and Technology of the National Health and Health Commission holds 3.05% of the shares. The Research Institute of the National Health and Health Commission is an authority on assisted reproduction in China. It has a license to operate artificial insemination with fuzeng/sperm donation, and is one of the 27 human sperm banks approved by the state. China Health Reproductive Hospital is a research results transformation base and clinical medical center of the Research Institute of the National Health and Health Commission. It has a strategic partnership with the National Key Laboratory of Male Reproductive Health. Its main business direction is infertility treatment, reproductive health treatment, gynecological diseases, male diseases, etc. Currently, it has 22 physicians and 50 operating beds. We believe that the National Health and Reproductive Medicine Hospital is backed by the National Health and Health Commission's research institute. This extension will further enhance the company's level of assisted reproductive technology, while also helping to expand the company's industrial layout in the field of reproductive health services. Continue to be optimistic about the company's ability to integrate assisted reproductive resources. The epitaxial merger and acquisition of reproductive medicine online and offline resources is the company's development strategy. This transaction is a further epitaxial breakthrough in the field of assisted reproduction after the company acquired Haikou Mary Hospital. According to the company's 2020 business plan, the company plans to cooperate with medical institutions such as Shenyang Oriental Jinghua Hospital. The methods of cooperation include but are not limited to the establishment of joint ventures and the establishment of Internet hospitals. Assisted reproduction is a blue ocean market. On the demand side, the national infertility rate is 12%-15%, and the number of patients exceeds 50 million. Of these, 20% require artificial assisted reproductive intervention. China's stock is estimated to have a potential audience of about 10 million people. Currently, the penetration rate of assisted reproduction technology in China is only 7%, far lower than 30% in the US, and the long-term market space for assisted reproduction is over 100 billion dollars. On the supply side, as of the end of 2018, there were 498 assisted reproduction licenses nationwide, the vast majority of which were public hospitals. It is estimated that the number of licenses has basically reached the upper limit. The future focus is on tapping the service potential of existing medical institutions. We are optimistic about the development potential of the assisted reproduction industry and continue to be optimistic about the company's ability to integrate resources in this field. Profit forecast and investment rating: Maintain a “buy” rating. We believe that this extension is another major breakthrough in the field of assisted reproduction for the company, and is of great significance for the company to improve the level of assisted reproduction technology and expand the company's industrial layout. We expect the company's EPS for 2020-2022 to be 0.85/1.11/1.36 yuan respectively (not considering the impact of share acquisitions and fixed increases on the company's performance and share capital), corresponding to the current PE price of 59/45/37 times, respectively, to maintain a “buy” rating. Risk warning: 1) the risk of the company's epitaxial acquisition failure; 2) the risk of uncertainty in the implementation of the company's fixed increase; 3) the risk that the company's performance falls short of expectations; 4) systemic risk.