The core view is that the growth rate of performance in the third quarter picked up, and the growth rate for the whole year is relatively certain. Affected by factors such as medical insurance fee control and bid price cuts, the company achieved revenue of 1,396 billion yuan in 2015, a year-on-year decrease of 13.89%. Revenue for the first quarter, half year, and first three quarters of '16 was 4.31/8.85/1,193 billion, respectively, with a year-on-year growth rate of -6.10%/0.22%/4.17%; net profit corresponding to net profit of 0.90/1.96/263 million yuan, a year-on-year growth rate of -1.03%/4.78%/5.67%; revenue and net profit gradually stopped falling and rebounded. Considering that the company's revenue and net profit base was small in the fourth quarter of '15, the company's annual performance is expected to rebound significantly and enter an upward channel. Phlegm Heqing will form a series of products to promote the growth of the company's performance. The company creates a series of products around phlegm clearing injections, including capsules, oral liquid, children's 5ml dosage forms, and nebulization studies. Among them, phlegm heqing capsules have been marketed and sold in 2015, oral liquid is in phase III clinical research, and supplementary approval opinions are being refined for children's dosage forms. The introduction of multiple products will effectively fill the current gap in the market and thus promote the growth of the company's performance. The variety under development is getting richer, and the use of anti-tumor drugs may enter the harvest period. Through purchasing and cooperative development, the company has successively obtained new drugs under development, such as bear bile drops, butadiene oil softgels, wind relief and pain relief capsules, and Huadan Anshen, etc., and the product line under development is even richer. At the end of '15, the company increased capital in Shanghai Yizhong Biotech and cooperated to develop “paclitaxel micelles for injection”; in August '16, the company increased its capital in Shanghai Gobaid Biotech and obtained priority purchasing rights for “duranamine for injections”. Currently, these two anti-tumor drugs are in the late clinical stage, and it is likely that they will enter the harvest period on the market relatively soon. Financial forecasting and investment recommendations We expect the company to achieve net profit of 3.06/3.26/343 million yuan in 2016-2018, corresponding to EPS of 0.37/0.39/0.41 yuan. Referring to the average valuation level of comparable companies, the company was given a price-earnings ratio of 31 times over 17 years, corresponding to the target price of 12.09 yuan, maintaining the company's “buy” rating. Risk warning If the company's new drug development and approval progress falls short of expectations, it will have a certain impact on the company's long-term development. If there are adverse reactions in the clinical use of traditional Chinese medicine injections, it will adversely affect the sales of the company's phlegm heqing injections.