Guiding 20-25% revenue growth in 2016
　　Management is guiding mid-teen organic growth and 5-10% growth fromM&A, for the three business segments including drug manufacturing, hospitalsand medical devices. We highlight the management incentive programindicated revenue and net profit growth of around 15% in 2016 and 2017. Onthe policy headwinds, management believes the stringent R&D regulatory,requirement of BE studies, as well as the implementation of two-invoicesystem are positive for leading players as those policies are likely to wipe outsmall companies.
　　On drug manufacturing
　　As 85% of the company’s drug portfolio are generic drugs which are facingpricing pressure from tenders, management highlight the continuous launchesof new drugs as an efficient way to absorb price erosion as well as maintain astable GM. The sales of Aodejin has returned to a normal level from March.
　　Management does not expect too much impact from the inclusion ofsupportive drug list as Aodejin has already been treated in this way byphysicians. In addition, management reiterated the timeline for Rituxan mimicto be launched in 2018 and Herceptin mimic in 2019.
　　On hospital business
　　Management expected limited contribution in near term from the existingprojects in Suqian, Guangji, Taizhou and Qingdao. Meanwhile, they are activelyseeking mature hospital projects in coastal area where has strong demand forpremium services and high proportion of out-of-pocket expenses.
　　Management highlighted the out-of-pocket ratio is around 60-70% for thecurrent hospital portfolio.
　　Recent bidding for Gland Pharma
　　On May 9, Fosun announced that the company had made a non-bindingproposal for 96% equity share of Gland Pharma, which is owned by thefounders and KKR. Management believes the deal will largely improve itsability and capacity on research and manufacturing of injectable drugs. GlandPharma, founded in 1978, is mainly engaged in developing and manufacturingof injections. It is the first Indian pharmaceutical company who obtained FDAapproval for injections in the US.