The company's announcement on the matter received a “Transaction Notice”, which determined that Daan Gene was the transaction supplier for the “Kaili City Level 3 A General Hospital Equity Cooperation” competitive negotiation procurement project, with a transaction amount of 868 million yuan. Key points 1. The company's medical investment business segment has gradually realized, and various models have opened up the medical services market. On August 25, 2015, it was announced that the “Bazhong Enyang District People's Hospital Cooperation Framework Agreement” was signed with the Enyang District Government of Bazhong City. The company is Party B and plans to invest 300 million yuan with its own capital, with a shareholding ratio of not less than 51%. Party A's Enyang District People's Government invests in land assets; the construction scale is designed according to the scale of a tertiary general hospital, and the construction period is 2 years. Recently, the company announced that it has received a “Transaction Notice”, which determines that Daan Gene is the transaction supplier for the “Kerry City Level 3 A General Hospital Equity Cooperation” competitive negotiation procurement project. The transaction amount is 868 million yuan. The project purchaser is the Kaili Health and Family Planning Bureau, and the supplier is Daan Gene. Among them, the purchaser holds 35% of the shares and the supplier holds 65% of the shares. This contract is higher than the previous project in terms of hospital size and investment amount. Since it was first announced in the first half of 2014 that a hospital investment management company will be established, the two cooperation agreements signed so far can be seen that the company's business in the hospital investment sector is gradually beginning to be implemented; from the perspective of cooperation models, the company's layout and cooperation models in the field of hospital investment are flexible and diverse. 2. Taking advantage of the medical service industry, technology+service has opened up huge market space. Drug prices continue to decline, and the zero bonus rate model is likely to spread across the country. At the same time, the policy side clearly favors fields such as old-age care, rehabilitation, and hierarchical diagnosis and treatment, so in this context, we judge that 2016 will be a big year for the medical service industry. In terms of models, in addition to equity cooperation, what is more important is whether high-value-added medical service projects can be grafted onto existing medical service business platforms to meet hierarchical medical needs. This will be an important factor in determining future medical service business market space. Daan Gene is a leader in the field of clinical genetic diagnosis in China. Through participating in holding subsidiaries, the company has gradually realized the entire industry chain layout in the domestic precision medicine industry. From R&D and production of upstream raw materials and products, to downstream sales and service, combined with independent medical laboratory business, the company's advanced genetic diagnosis technology can become a stepping stone in opening up the special testing service market. Daan Gene is one of the few companies in the field of high-throughput sequencing in China that also has product certificates and service qualifications. Furthermore, in addition to genetic testing, the company has also expanded in other fields of medical technology through shareholding companies. These medical technologies will all become future projects for the company to achieve high added value on the medical service business platform. Therefore, on the one hand, we are optimistic about the company's progress in the field of hospital investment, and on the other hand, it is more important. We are optimistic about the company's future “technology+service” model, which is in line with our judgment on future investment strategies in the pharmaceutical industry. 3. Pay attention to the promotion of the company's fixed growth plan. The company announced a fixed increase plan after the company resumed trading. Our opinion can be taken from the research report “Announcing the fixed increase plan, greatly increasing the construction of a genetic diagnosis technology platform”. The main focus of this fixed increase plan is: first, all company executives and employees will subscribe to the stock ownership plan; second, greatly increase the construction of the genetic diagnosis technology platform. At this point in industry development, increasing investment in technology platforms and strengthening the company's original technical advantages will guarantee the company's leading position in the industry in the future; third, this increase needs to be approved by the Ministry of Education and the Ministry of Finance, so you can pay attention to the progress of approval, or the company. The stock price generated an eventful stimulus. Profit forecast and investment rating: We expect the company's 2015-2017 EPS to be 0.20 yuan, 0.24 yuan, and 0.30 yuan respectively, corresponding to the current stock price valuation of 278 times, 231 times, and 181 times. We continue to strongly recommend that in the short term (or half a year), the company's stock price is expected to reach a new high (above 70 yuan). The main reasons for this judgment given to the company include the following: First, the genetic diagnosis industry is a long-term investment hot spot for the future pharmaceutical industry. This industry has high professional barriers and relatively high concentration, so it should invest in the lead. Daan Genomics itself has a strong foundation, and continuing to strengthen technology platform construction through fixed increases will further strengthen the company's leading position. Second, we believe that the future genetic diagnosis industry will have several anticipated incentives. They include: 1. Changing the transitional regulatory system such as pilot licenses into general laboratory quality evaluation system certification, similar to certification for general genetic diagnosis programs, such as PCR, etc. For the vast number of companies with independent medical laboratory qualifications, this will give them more opportunities to carry out high-throughput sequencing services in a legal and compliant manner, and will also drive the application and promotion of this technology. 2. With the full liberalization of the two-child policy, some high-throughput sequencing programs and genetic diagnosis programs will be applied more to the field of new screening to facilitate eugenics and excellent childbearing. Some provinces have previously issued notices to include NIPT and some neonatal (genetic testing) screening programs in the scope of government payments. We speculate that other provinces will make similar actions in the future. 3. Investments in the primary market in this field are still active, and their entry into the capital market will continue to drive investment enthusiasm in this sector in the future. Third, the medical investment business has begun to gradually materialize, opening up another channel to the blue ocean market. We judge 2016 to be a big year for health services. Meanwhile, the application of advanced medical technology will provide more high value-added projects for the medical service business. The company's “technology+service” model is the most promising. Risk Tip 1. Product development and marketing risks.