Management guided 20% growth in 2016
　　The company provided guidance of 20% sales growth in 2016, includingorganic growth of 10% and another 10% from M&A. For the ongoing business,sales growth guidance for China, Europe, US, and Australia is 10%, 6-8%, 10-15%, and 3-5% respectively. Management indicated that organic growth islargely on track. In 2016, the company increased ASPs in Europe, China, HK,Australia, and US by 2%, 5%, 3.5%, 3%, and 0%, respectively. Managementalso indicated that there is a change in product mix towards high-end productssuch as Zirconia prosthetics.
　　Updates on M&A
　　We expect US would be the key target of M&A in the near-term as thecompany announced the letter of intent in March. We believe the companytargets to achieve a national presence through the acquisition. Additionally,Europe is likely to be the next target as the company would like to penetratefurther. As a reminder, the acquisitions in the past were based on a valuationof 7x EV/EBITDA for large deals and 4-6x for smaller deals. We believe thesewould be the reference for the future acquisitions.
　　Other key takeaways
　　Management expects the phase 1 project of its new facility in Dongguan tostart in June this year and finish by the end of 2017. There would beapproximately 2,000 technicians in the new facility, compared withapproximately 3,000 the company has at present. The phase 1 project wouldcost approximately RMB100m. The company also plans to have a phase 2project but it is likely to start in 2020.