Relying on the advantages of COS core technology, it has become a pioneer in the field of smart card. The company is a high-tech enterprise specializing in the research, development, production, sales and service of information security products based on identity authentication. it is in a leading position in the three fields of network identity authentication, software copyright protection and smart card operating system, and has significant technical advantages in the field of COS (embedded operating system). In 2015, the company displayed a series of brand-new products such as card-style OTP tokens, Feitian Integrity EMV video cards, Bluetooth personal transaction cards and so on at the Paris Smart Card Industry Exhibition. The company also cooperated with Shanghai Walt Disney to become the only card dealer in China that can use the classic images of Walt Disney Company Marvel, Lucas and Pixar as transportation card design elements, realizing the perfect integration of modern technology and fashion in the field of public transport. The company's annual revenue and return net profit in 2015 were 912 million yuan and 184 million yuan respectively, down 15.63% and 30.56% respectively from the same period last year, mainly due to the serious decline in profits of USBKey, OTP dynamic tokens and other companies' main products as a result of the increase in bidding behavior.
There are basically no new bidding projects in 2016, and the company's traditional gross profit margin is expected to reverse the downward trend.
Increase the investment in technological research and development of "blockchain" and seize the strategic highland. With Ping An Insurance becoming the first Chinese company to enter the international blockchain alliance, blockchain has set off an investment boom in the Chinese market. According to its characteristics of decentralization and security, blockchain technology has a wide application prospect in the fields of Internet finance, artificial intelligence, big data and cloud computing. The company has always paid close attention to the technological development of this industry. at present, there is a certain technical reserve and research in blockchain technology, and the company will actively participate in digital currency and other blockchain technology industries in the future. starting from the virtual / digital currency and private chain platform, strive to make blockchain technology become a new growth point of the company's business.
To open up the civil market, M & An is expected to be strong. The strong development power of the traditional business is insufficient, and the market competition increases. At the same time, the company is trying to break through the boundaries of the financial field and expand its business to the civilian field. M & A has become an efficient choice for the company to develop innovative business, absorb new technology and enhance competitiveness. In 2016, the company will comprehensively consider factors such as matching with the company's main business and producing synergy effect according to the needs of business development. Prudently seek M & An opportunities for high-quality enterprises in the industry, promote upstream and downstream and cross-border cooperation, and work together to achieve a win-win situation.
Valuation and rating. We estimate that the diluted EPS of the company from 2016 to 2018 will be 0.50,0.58 and 0.70 yuan, respectively. In 2016, the company will be valued at 70 times PE, with a target price of 35 yuan, with a "overweight" rating for the first time.
Risk tips: smart card business promotion may be less than expected risk; blockchain technology research and development progress may be less than expected risk.