Event: 2015 Quarterly Report: Achieved operating income of 308 million yuan (+25.15%), net profit loss attributable to parent company of 63.09 million yuan (loss of 58.1 million yuan in the same period last year), and diluted earnings per share -0.26 yuan. Comment: An established financial informatization manufacturer with outstanding competitiveness in the software business (especially the banking core system), benefiting from the huge business opportunities brought by localization, we believe that 1. The company is one of the top ten major solution providers for the domestic banking industry, has developed a number of self-branded application software products and solutions, implemented more than 1,000 financial application software product solutions and computer application systems, and has 50,000 application outlets. It is a software system supplier for the five major state-owned banks, the vast majority of joint stock banks, and many urban commercial banks and agricultural credit unions. 2. The Postbank project completed by the company in 2014 innovated the banking system of small computers to replace mainframes based on open platforms and cloud computing technology, marking the successful nationwide switching and launch of the postal savings logic centralized system. After the system is launched nationwide, it will support the operation of 39,000 branches of the Postal Savings Bank of China across the country and support nearly 100 million bank transactions every day. This is currently the core business system of banks with the largest processing volume established on an open platform in the world. Help the Postbank achieve the goal of being autonomous and controllable while reducing maintenance costs. We believe that (1) it took more than three years for the company to successfully complete the postal storage project, which not only showed the company's outstanding business capabilities in the bank's core system, but also built a high barrier to technological competition. (2) In recent years, in order to meet the needs of business development and market competition, domestic commercial banks have accelerated the pace of construction of a new generation of core banking systems. A new round of core banking system upgrading activities has gradually become the main theme of recent commercial bank informatization construction. The market demand for core business systems is high, and the trend of rapid growth will not change in the next 5-10 years. Especially in the context of localization, it is hoped that the company will use the Postbank project as a template to copy it to other financial institutions. In the 2015 plan, the company focuses on the software business and strives to develop a number of software products, including core banking systems. The company has seen huge business opportunities brought about by industry trends, and we are looking forward to this. Endogeny+Extension accelerates the deployment of Internet finance 1. The company entered the private finance field as early as 2013 and drew up a blueprint for the “Nantian Microfinance Development Plan” to provide complete business consulting, integrated construction, software development, system launch, and overall operation and maintenance services for private Internet finance enterprises with different business needs. The “Nantian Online Investment and Financing Platform” software product launched realizes various functional modules including a trading platform, an external network portal, a settlement system, risk control, operation and maintenance management, customer analysis, and regulatory reporting. As of December 2014, the company has successfully provided overall solutions for 4 private financing registration service type customers, and completed system development and official launch operation, ensuring that customers start business on schedule. 2. The company announced on March 20: It intends to subscribe to the Shanghai Huifu Internet Financial Information Service Venture Equity Investment Center (Limited Partnership) for a 12% partnership share, with an amount not exceeding RMB 30 million. The focus will be on unlisted companies with competitive advantages, rapid growth capabilities, and good market prospects for their services and products in related fields such as Internet financial product trading platforms, big data development and applications, P2P online loans, crowdfunding, and supporting computer software, etc., and new third board or GEM enterprises in the early to medium term. 3. We believe that (1) Internet finance is the general trend, and it is also the industry where we think the industrial Internet was first launched. The company is inherently a leading domestic enterprise in informatization construction in the financial industry. With high-quality customer resources and rich business accumulation, the transformation of Internet finance has become an inevitable trend. It has a positive effect on optimizing the company's business structure, innovating business models, and expanding business areas. (2) The company can utilize the superior resources of its partners to improve extension efficiency and reduce investment risks through cooperation. (3) Partnering with high-quality companies in the financial sector, such as Remittance World, will help the company to rapidly expand Internet financial services and form a win-win situation with complementary advantages. The majority shareholders continue to support, focusing on incentive system reform. Yunnan is one of the provinces where the country focuses on promoting the reform of state-owned enterprises. In September 2014, the Yunnan Provincial State-owned Assets Administration Commission announced the “List of the first batch of mixed ownership enterprises in Yunnan”. Cooperation methods include equity transfers, capital increases and stock expansion, establishment of joint ventures, strategic cooperation, cooperative management, and cooperative development. The Yunnan Provincial State-owned Assets Administration Commission expressed the hope that by launching this batch of projects, it will accumulate experience for the next step in developing a mixed ownership economy and strive to basically complete the equity diversification reform of state-owned enterprises throughout the province by 2020. With the exception of a very small number of enterprises that maintain sole state-owned ownership, the rest will develop into mixed ownership enterprises. The company is a financial IT enterprise owned by the Yunnan Provincial State-owned Assets Administration Commission. It is one of the few high-quality financial informatization enterprises in the southwest region. The majority shareholders have always given active support and assistance to the company's business development, innovation and development, and are willing to work with the company to build Nantian into a famous information technology service enterprise. We believe that although the company is not on this list, it can still focus on the reform expectations of state-owned enterprises in the future to improve the incentive mechanism. Giving a “buy” rating We expect the company's earnings per share from 2015 to 2017 to be 0.16 yuan, 0.41 yuan, and 0.65 yuan respectively, and the corresponding PE is 199.5 times, 80.4 times, and 50.6 times, respectively, covering the first time, and giving it a “buy” rating. Risk warning that the growth of the software business fell short of expectations; the development of the Internet financial business fell short of expectations. The incentive system cannot be solved.