Revenue continued to grow at a high rate of 47.5% in the first three quarters of 2018, and net profit increased by 18.7% after deducting non-net profit. The company's revenue for the first three quarters of the year was 24.56 billion yuan, an increase of 47.5%, net profit of 8.3 billion yuan, an increase of 15.4%, a net profit of 8.3 billion yuan, an increase of 18.7%, and an EPS of 0.554 yuan, an increase of 15.4%, which was slightly lower than expected. Mainly due to the implementation of the ABS program for accounts receivable in Q3, the one-time confirmation of financial expenses of about 60 million yuan in the current period led to a significant increase in the quarterly financial expenses rate. Furthermore, in the first quarter of last year, the implementation of accounting changes that lowered the one-time bad debt calculation standard led to an increase in profit. Excluding the impact of this factor (the impact was about 110 million yuan), net profit after deducting the impact of this factor (which affected about 110 million yuan) increased by 41% in the first three quarters. The third quarter achieved revenue of 9.05 billion dollars in a single quarter, an increase of 44.6%, net profit of 253 million dollars, an increase of 21.5%, and net profit of 250 million dollars after deducting non-net profit, an increase of 28.7%. In addition, the company announced its full-year performance forecast for 2018. It is estimated that the company's net profit for the full year of '18 is 1.11 billion to 1.27 billion yuan, which is expected to increase 10-26% year-on-year. The company gradually changed from a regional pharmaceutical distribution company to a national distribution company, using the SAP system to accelerate endogenous integration. After rapid acquisition and expansion in 2017, the company achieved full coverage of 31 provinces (municipalities directly under the Central Government) across the country, with a total of more than 200 subsidiaries within the company. Judging from the regional distribution, the share of revenue from outside Shandong Province is close to 55%, and the revenue contribution has increased markedly. The company has set up 24 profit contribution divisions, and each department implements vertical management. With the full launch of the SAP system, the operating conditions of each subsidiary can be monitored in real time, including cash flow, sales payback, etc., to help the company accelerate the integration of its subsidiaries while rationally allocating resources to improve overall operating efficiency. With the medical industry's supply chain financial instruments, accounts receivable and cash flow are expected to continue to improve. In the first three quarters of 2018, the company actively strengthened the management of accounts receivable through various means. In addition to increasing collection efforts, the company is also collaborating with various financial institutions to actively explore the application of supply chain financial instruments, accelerate capital flow efficiency in the industrial chain, and effectively improve the company's repayment period and operating cash flow. At the end of November last year, the company set up a special asset support plan for accounts receivable phase 1, and at the end of August this year, the China Merchants Wealth - Ruikang Pharmaceutical Accounts Receivable Phase II Asset Support Special Plan was officially established; in October, it was announced that it plans to transfer accounts receivable of no more than 5 billion yuan to open source securities through the ABS plan; at the end of October, it cooperated with Minsheng Bank to automatically “exchange” the company's accounts receivable pool into a lendable amount. With the help of various financial instruments, the company's accounts receivable and cash flow are expected to continue to improve. Gross margin increased 2.4 percentage points in the first three quarters of '18, and operating cash flow for the Q3 quarter was sharply corrected. The company's gross profit margin was 19.7% in the first three quarters of 2018, an increase of 2.4 percentage points, mainly due to a significant increase in the share of the high-margin equipment business. The period expense ratio was 12.6%, an increase of 2 percentage points, of which the sales expense ratio was 6.6%, a decrease of 0.05 percentage points, the management expense ratio was 4.09%, an increase of 0.84 percentage points, and the financial expenses ratio was 1.89%, an increase of 1.21 percentage points. The rapid increase in the financial expense ratio was mainly due to the increase in overall market financing costs and the company's implementation of the ABS plan for accounts receivable at the end of August (total amount of 1.25 billion yuan). The one-time financial expenses confirmed in the current period were about 60 million yuan, which led to an increase in the financial expense ratio for the Q3 quarter to 3.23%. Through strengthening account management and comprehensive application of supply chain finance and other tools, the company added 780 million yuan in accounts receivable in Q3, with obvious payback management results. At the same time, Q3 operating cash flow in a single quarter was +1,498 billion yuan, which was drastically corrected. While revenue in a single quarter reached a record high, the company achieved positive cash flow from operating activities in a single quarter for the first time since 2016. To build “Sinopharm Holdings” in the device sector, the current price still faces major investment opportunities. We believe that the company's nationwide device layout, which began in 2015, will create “Sinopharm Holdings” in the device field. The market is still insufficient for Ruikang's nationalized business model, strategic opportunities, and potential value. We believe that the market still faces significant investment opportunities based on the 2018 valuation. According to the full-year performance forecast and considering that the company is in the national platform integration stage, we lowered our 18-20 EPS forecast to 0.82 yuan, 1.04 yuan, and 1.3 yuan (previously 0.89 yuan, 1.16 yuan, and 1.49 yuan), up 23%, 26%, and 25% year-on-year. The corresponding predicted price-earnings ratios were 10 times, 8 times, and 7 times, respectively, maintaining the buying rating.