I. Overview of events
The company released its semi-annual report on August 29, 2021, with an operating income of 780 million yuan, an increase of 44.85% over the same period last year, and a net profit of 76.5446 million yuan, an increase of 50.64% over the same period last year.
II. Analysis and judgment
Focus on professional segmentation brings high income, short-term investment is conducive to the long-term development of income, continue to cultivate subdivided areas to achieve high growth. In the "2020 Bank of China Ltd. Industry IT solution Market share Analysis report" published by Sadie consultants, the company ranks first in credit card and risk management, second in customer relationship management, third in credit system, business intelligence and transaction bank, and continues to expand the market by relying on segment advantages, with revenue growth exceeding 40 per cent. At the same time, the company's contract liabilities increased by 117% compared with the end of the first quarter, or to a certain extent, the company's demand is good.
On the profit side, short-term investment brings profit margin pressure, which is conducive to long-term development. The company realized deduction of non-net profit of 35.4054 million yuan, an increase of about 11% over the same period last year. The reason why the profit growth rate is lower than the income growth rate is due to the large increase in R & D expenses. We believe that the company's investment in R & D will increase the cost rate in the short term, which will help to enhance the company's market competitiveness and promote long-term development.
The cooperation between large banks continues to deepen and lay the foundation for development, and in the future, the company is expected to benefit from trends such as financial innovation. The company has established good cooperative relations with more than 300 customers in the financial industry. It covers 100% of the central bank, policy banks, state-owned banks and national joint-stock banks, and covers 96.15% of the banks with more than 300 billion assets.
In 2020, the company landed a number of large bank projects, including the credit system projects of China Construction Bank Corporation, Postal Savings Bank of China, China CITIC Bank Corporation, Ping an Bank and other banks, and the credit card core projects of China CITIC Bank Corporation, China Construction Bank and other banks. In the future, large banks will be the main force in the transformation of financial information innovation, financial technology and other IT. The continuous cooperation of large bank customers will help to undertake more financial technology construction needs in the future.
III. Investment suggestions
The company is a leader in the field of financial IT, and is expected to benefit from the development of financial innovation, digital currency and other fields. at the same time, its cooperative relationship with large banks continues to deepen, and long-term growth is expected. It is estimated that the EPS of the company from 2021 to 2023 is 0.89,1.20,1.58 yuan respectively, and the corresponding PE is 35x, 26x and 20x respectively. Select Hang Seng Electronics, Changliang Technology and China Information, the leaders in the field of financial IT, as comparable companies. The average PE (Wind consensus expectation) of the relevant companies in 2021 is 36X, the company valuation is slightly lower than the industry average valuation, and the "recommended" rating is maintained.
Fourth, risk tips:
Fourth, competition in the IT field of banks has intensified, and the progress of financial innovation has been less than expected.