Event: We recently researched Shixuan Technology and communicated with the company's management on issues that investors are concerned about. Transaction Overview: Zhongyuan Huadian acquired 100% of Shixuan Technology's shares by paying 160 million yuan in cash and issuing 45.41 million shares, at a transaction value of 690 million yuan. The acquisition was approved by the Securities Regulatory Commission on September 15, and the underlying shares were transferred on September 29. Shixuan Technology promised that the net profit for 2015-17 will not be less than 46.875 million yuan, 58.594 million yuan, and 73.242 million yuan, respectively. Investment points The medical informatization industry is far from reaching its ceiling, and there is still plenty of room for development: 1. Huge customer base: Currently, there are more than 2,000 tertiary hospitals in China, and the demand for medical informatization in county-level hospitals will gradually begin in the future, and the customer base will gradually begin; 2. The degree of informatization continues to deepen: the development of hospital informatization can be divided into three stages - hospital management informatization HIS system, clinical management information (CIS) stage, and regional health service (GMIS) stage. Currently, China's overall medical informatization is in the second stage of development. The market space for clinical medical technology systems for various departments is huge. For example, system sales for a single department of ophthalmology have reached 700-1 million. Demand for the information platform data center business is strong, driving the company's rapid growth: the company adjusted its product structure in 2012, and the information platform and data center business became the focus of the company's business development. In May of this year, the Ministry of Health issued a document promoting the interconnection of information systems in hospitals, which will stimulate the explosion of demand for information platform data center services. Currently, this business accounts for about 50% of the company's business. The company has plenty of orders in hand. The total amount of new contracts added this year has already exceeded 200 million, and is expected to reach 24—250 million for the whole year. Revenue growth is far better than last year. Cooperate with the government to explore commercialization models for regional medical platforms: The commercialization potential of regional medical platforms is huge. The company is actively exploring commercialization models for regional medical platforms. Currently, cooperation models are being discussed with local governments, and it is expected that a business model will be implemented this year. The company believes that commercial development of regional medical care is more valuable than using a platform, and will not rule out expanding regional platform business through the delivery platform+commercial development model in the future. Layout of 2C medical services: Currently, the pressure on institutional care for old-age care is increasing. Using informatization means for home care, integration of medical care is the general trend. In the field of old-age care, the company is currently cooperating with hospitals under the civil administration department to promote medical products and services. In terms of the development model of the 2C business, the company will adopt the B2B2C model; improve the product through the 2B method first, and lay a good foundation for the future transition to the 2C model.