Unique point of view: 1. The company is the core credit / risk management system supplier in the financial industry, with strong customer, industry and business model scalability. 2. The company's "one horizontal and one vertical" development model is in line with the characteristics of the industry, the company's resource endowment, and has good growth.
Credit / risk management system supplier with strong expansibility. The company is a domestic financial IT solution provider focusing on credit asset / risk management of financial institutions, with unique business characteristics, and strong expansibility in three aspects: customer, industry and business model:
Customer expansion: the company currently has more than 140 customers in the financial industry, of which commercial banks are the core customer areas. By the end of 2013, there are 3949 financial institutions in China's banking industry (145urban commercial banks, 468agricultural commercial banks, 133rural cooperative banks, 1803 rural credit cooperatives). The IT construction of small and medium-sized commercial banks lags behind relatively, and the company has huge room for customer expansion in the future. Industry expansion: at present, the company's business is distributed in banks, trusts, securities firms, financial companies and other fields, of which banking customers account for about 85%. With the development trend of the integration of the financial industry, the demand for asset / risk management in non-bank industries will be greatly increased. therefore, there are broad prospects for the expansion of the corporate industry. Model expansion: at present, the company is mainly the role of product suppliers, there can be two modes of business development in the future: 1, "product + service" model: on the basis of products, the front end expands consulting services, and the back end expands operation and maintenance services. 2. "Product + service + business" model: on the basis of products and services, according to the company's profound industry knowledge in the field of credit and risk, big data accumulated, it can cooperate with small and medium-sized financial institutions (agricultural commercial banks, village banks, etc.) and new entry institutions (such as those involved in Internet finance) at the business level.
The development model of "one horizontal and one vertical" has good growth. 1. Horizontal customer development. According to IDC data, the market scale of IT solutions in China's banking industry will grow at an average annual rate of 21.7% from 2013 to 2017. China's financial industry is in the stage of integration and innovation, with a large number of small and medium-sized financial institutions and innovative business entities emerging, which will maintain a sustained strong demand for the company's main credit / risk management system and BI. 2. Vertical business extension. Develop from product to "product + service + business" model (see previous section).
With people and money in place, the company has entered the stage of accelerated development. In 2013, the company added nearly 200 employees, a total of 1100; IPO raised 169 million yuan to invest in four major fund-raising projects. With the increase of the company's business volume and the improvement of the sharing degree at the bottom, the per capita output is expected to gradually increase from the current 200000 yuan (Donghua Software 2013 per capita output is 860000 yuan), and the company has entered the stage of accelerated development. Stock price catalyst. The extension is advancing smoothly; the customer, industry and business model are developing smoothly.
Profit forecast and valuation. It is estimated that the net profit attributed to the parent company from 2014 to 2016 is 63.87 million yuan, 82.31 million yuan and 103.35 million yuan, and the EPS is 0.93,1.20 and 1.50 yuan, corresponding to 42, 32 and 26 PE. The "cautious recommendation" rating is given for the first time, with a target price of 42 yuan.
Risk Tip: customer, industry expansion is not as expected.