Incident: On July 21, Huawei and the company signed a cooperation agreement at the Kuantajima base of the Huawei Suzhou Research Institute and jointly released the “HUAWEI & Maddie” smart medical platform — cloud surgery, cloud severe illness, and cloud first aid solutions. Launched the “Huawei & Maddie” smart medical platform to enable emergency and critical care solutions to the cloud. The “Huawei & Maddie” smart medical platform is a smart solution deployed on HUAWEI CLOUD based on the HUAWEI CLOUD architecture planning and design, combined with Medi Technology's industry experience in smart operating rooms, smart critical care, and smart first aid, including cloud severe illness, cloud first aid, and cloud surgery. Currently, the platform's joint solution has completed compatibility verification at OpenLab's Suzhou headquarters in China. Through verification, the HUAWEI CLOUD platform can complete adaption with Medi Technology's Smart Cloud Critical Care, Regional Medical Quality Control Cloud Platform, and Smart First Aid Platform. The first aid platform and intensive care began the company's new growth, and the hand numbness business developed steadily. 1) Intensive care resources are tight under the epidemic, and it is imperative for the ICU system to improve efficiency. Under the epidemic, ICU intensive care resources are tight, and the critical care auxiliary clinical information system has outstanding capabilities in improving efficiency and saving manpower. 2) The country has accelerated 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 an emergency and critical care system based on the “five major centers”. The Suzhou-model regional smart first aid platform has become a benchmark project. It can be replicated and promoted nationwide. The company is deeply involved in the construction of the “531” project in Suzhou to promote emergency first aid construction. The company undertook the construction of a business support platform for the medical rescue emergency command platform in Jilin Province and won the bid for the “Kunshan Regional Integrated Platform (including emergency care, five major specialties and specialist data application systems)” project, which won the bid amount of 15.6 million yuan, deepening the mining and application of specialist data. Enter the blue ocean market, which has high barriers to assisted reproduction, and have sufficient capital to build an ecosystem for the entire industry chain. 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%, and the number of infertile couples will reach 50 million. In 2018, the penetration rate of the assisted reproduction market in China was 7%, and the US market penetration rate was over 30% during the same period. As penetration increases, combined with China's population base, assisted reproduction has become a blue ocean market. 2) Assisted reproduction licenses create a high threshold, and high-quality private institutions have potential for development. The assisted reproductive services market in China is strictly regulated, the number of licenses is limited, and new applications are difficult. When the market penetration rate increases in the future and licenses are issued in accordance with national regulations, the supply of top public hospitals will be in short supply. There will be an increase in ranking time, and some high-quality private institutions will unleash great potential for development. 3) Successive acquisitions of Hainan Mary Hospital and Beijing National Health Reproduction to create an ecosystem for the entire assisted reproduction industry chain. The company acquired 51% of the shares of Mary Hospital and 20% of Beijing National Health Reproductive Hospital to enter assisted reproduction. In the future, it will continue to increase the number of cycles and expand the market size, centered on assisted reproduction medical institutions, and expand to the middle of the industry chain to carry out pre-pregnancy and eugenics services. At the same time, it uses its own advantages in informatization to build 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 in 2020-2022, the company will achieve revenue of 4.60, 6.03, and 749 million yuan, up 38.2%, 30.9%, 24.3% year on year, and achieve net profit to mother of 1.37, 181, and 247 million yuan, up 192.3%, 32.4%, and 36.0% year on year. Maintain a “buy” rating. Risk warning: The promotion of assisted reproduction business fell short of expectations; the national emergency first aid construction process fell short of expectations; there may be a risk of errors in key assumptions.