I. Overview of events
From January to September 2014, the company achieved operating income of 895 million yuan, an increase of 11.73% over the same period last year, and realized net profit of 31.1368 million yuan for shareholders of listed companies, an increase of 67.86% over the same period last year. The company expects the net profit of shareholders belonging to listed companies to increase in advance from January to December 2014, with a year-on-year increase of 40-70%.
Second, analysis and judgment.
After deducting non-profit, the growth comes from the expansion of sales scale and the increase of gross profit margin.
During the reporting period, benefiting from the increase in sales scale and the increase in gross profit margin, the company's performance improved significantly. The net profit after deduction was 26.451 million yuan, an increase of 77.48% over the same period last year, and the return on net assets increased by 1.62 percentage points over the same period last year. The expense rate remained stable during the company period, and the internal management was further improved.
The connectivity meeting of the Ministry of Housing and Construction is being held, and 17 new interconnection cities are being added.
It is reported that this year's connectivity meeting of the Ministry of Housing and Construction was held in Zhengzhou on October 30 and 31, and the verification work of urban one-card connectivity across the country was officially launched, involving 17 cities, including Zhengzhou and Jinhua, plus the 35 cities that have already realized interconnection. Nearly 60 cities across the country will achieve interconnection. Chenglian, a subsidiary of the company, is responsible for the operation of the first-level TSM platform of the Ministry of Housing and Construction. With the further promotion of interconnection, the company is expected to obtain sustained operating income through platform transaction sharing and application services.
Firm platform strategy, relying on city couplet to create urban one-card multi-application ecology.
The application scenario of urban all-in-one card is extending from public transport to government services such as parks, libraries, health insurance and business alliance consumption. From the perspective of industry trend, expanding the application of financial payment has become a consensus in the development of urban one-card, mainly in the following ways: 1) urban one-card company applies for a prepaid card license, such as Tianjin City one-Card Company; 2) City one-card company has been acquired by the licensee, such as the acquisition of Hefei one-card by Bank of China. We judge that by creating an open and cooperative multi-application platform with more than 100 million potential platform users, and through the introduction of partners and extension to create an application template, we will further integrate all parties in the industrial chain and further enrich the platform ecology.
Third, profit forecast and investment advice.
Taking into account the decline in the amount of software tax rebates, we appropriately reduce the company's EPS to 0.26 and 0.44 yuan from 2014 to 2015, corresponding to PE of 64 and 38. The company's city couplet platform is still in the investment period, and we are optimistic about the high growth of the city couplet platform and maintain a "highly recommended" rating.
Fourth, risk tips:.
1) the competition in the smart card market is intensified; 2) the promotion of city couplet is blocked; 3) systemic risk.
