1. Event

The company released its third quarterly report for 2016 on the evening of October 25:

In the first three quarters, revenue reached 326445316.36 yuan, up 37.93% from the same period last year; net profit belonging to shareholders of listed companies was 6158199.73, down 28.56% from the same period last year.

Third quarter: realized revenue of 177130239.07, up 97.16% from the same period last year; net profit belonging to shareholders of listed companies was 21350372.27, up 53.31% from the same period last year.

two。 Our analysis and judgment

(1) the three-quarter report turns losses into profits, and revenue growth is mainly due to consolidated statements.

According to the third quarterly report, operating income in the first three quarters increased by 37.93% compared with the same period last year, mainly due to the acquisition in 2015 or the merger of newly established enterprises into the company's financial statements, which gradually led to an increase in operating income. Through the analysis of the situation of the parent company and various subsidiary companies, we believe that the company acquired in 2015 should mainly refer to the holding subsidiary Beichende, which holds a 55% stake and is included in the consolidated statement in the fourth quarter of 2015; while the newly established enterprise, the company set up a third-tier subsidiary "Tangbao Community E-commerce" in the disclosure announcement on December 9, 2015.

The three-quarter report turned losses into profits, in line with expectations. The company's results increased in the third quarter compared with the same period last year, and the company disclosed in its three quarterly results notice that the main reason is that due to the change in the scope of the merger, the commodities issued by the subsidiaries included in the merger scope in the first half of 2015 completed installation, commissioning and acceptance in the current quarter, resulting in a corresponding increase in revenue and profit. According to our analysis, the main reason should be the combination of morality and morality in Beichen. Due to seasonal factors, the performance of Beichende in the third quarter has begun to make efforts. In the first half of the year, the installation and commissioning of commodities were completed and passed the acceptance inspection in this quarter, and the related revenue gradually entered the recognition stage, resulting in a substantial increase in revenue and profits in the third quarter.

(2) the decline in the year-on-year growth rate of net profit is mainly due to the fact that some subsidiaries newly brought into the scope of consolidated statements are in the period of market development and promotion and have not yet produced benefits.

The net profit belonging to the shareholders of the listed company decreased by 28.56% compared with the same period last year, and the company disclosed in the performance forecast of the third quarterly report, mainly because some subsidiaries newly included in the scope of the consolidated statements are in the period of market development and promotion, and have not yet produced benefits and are in a state of loss. Through the analysis of the business situation of various subordinate enterprises of the company, we think that it should be mainly due to the fact that the third-tier subsidiary "Tangbao Community E-commerce" is still in the promotion period.

(3) the increase in expenses is mainly due to consolidated statements, increase in personnel costs, investment in research and development, promotion of new products and amortization of expenses, and gross profit margin has increased slightly compared with the same period last year.

According to the China News, sales expenses increased by 72.75% over the same period last year, mainly due to the increase in the scope of consolidation; the increase in personnel costs and the increase in the promotion of new products correspondingly increased sales expenses; and the management expenses increased by 61.89% over the same period last year, mainly due to the increase in the scope of consolidation, personnel costs, R & D expenses and depreciation amortization expenses. The overall gross profit margin of the company's products was 45.26%, a slight increase compared with 43.12% in the same period last year. According to our analysis, the slight increase in gross profit margin is mainly caused by Beichen Germany, where the gross profit margin of the VTS product series is relatively high.

(4) the business continues to advance, and the annual performance is expected to grow steadily.

The sales of various series of products in the company's traditional business and the holding subsidiaries of the two major epitaxial mergers and acquisitions, Tangdi Technology (51%) and Beichengde (55%), continued to promote business. Tangdi Information launched intelligent robots, intelligent community intelligent terminal products, and so on. Beichende is a leading enterprise in VTS, and the current lightweight, intelligent and autonomous transformation of bank outlets is the trend of the times. Big banks such as Agricultural Bank Of China, ICBC and CCB, as well as many small and medium-sized banks are promoting the transformation of their outlets (especially Agricultural Bank Of China promoted VTS in the bank in 2015). Beichende has a comprehensive leading edge in business, technology and other aspects. For the whole year, we expect the company's full-year performance will still achieve steady growth.

3. Investment suggestion

The revenue growth in the three quarters is mainly due to the consolidated statements; the decline in the growth rate of net profit compared with the same period last year is mainly due to the fact that some subsidiaries newly included in the consolidated statements are in the period of market development and promotion and have not yet produced benefits; the increase in expenses is mainly due to consolidated statements, increased personnel costs, investment in research and development, new product promotion and amortization of expenses, and gross profit margin increased slightly compared with the same period last year. Business continues to advance, and the annual performance is expected to grow steadily. It is estimated that the company's EPS for 16-18 years will be 0.23,0.34 and 0.49 yuan respectively, maintaining a "cautious recommendation" rating.

4. Risk hint

Business progress fell short of expectations; competition intensified.