Main points of investment
Event: the company released its 2016 annual report, with an annual operating income of 1.385 billion yuan, an increase of 28.70% over the same period last year, and a net profit of 112 million yuan, an increase of 25.56% over the same period last year.
The non-recurrent profit and loss decreased significantly, and the performance increased steadily. The company's net profit belonging to shareholders of listed companies in 2016 was 122 million yuan, an increase of 1.3% over 2015. The slow growth rate was mainly due to the large decline in government subsidies, investment income and other non-operating income and expenditure during the reporting period, with non-recurrent profit and loss totaling 11 million, down 66.72% from the same period last year. After deducting non-recurrent profit and loss, the company's net profit was 112 million yuan, an increase of 25.56% over the same period last year, and the performance achieved steady growth.
The horizontal expansion of software business is a drag on the formation of hardware business. During the reporting period, the revenue from the sales of software products and software services developed by the company was 211 million yuan and 630 million yuan respectively, an increase of 124.94% and 34.81% over the same period last year. In 2016, the company is actively expanding into pan-financial institutions and overseas financial markets, which is conducive to the further development of its traditional software business. In other businesses, sales of hardware products decreased by 31.33% compared with the same period last year, which was a drag on the revenue growth of the main business to a certain extent.
Extension helps endogenesis, and the new kinetic energy grows rapidly. During the reporting period, the "Micro-craftsman O2O aggregation Cloud" of the company's holding subsidiary Shanghai Keshan realized the expansion of channels and the improvement of operation capacity in the mode of SaaS service, with a net profit of 45.1193 million for the whole year, which effectively promoted the overall net profit growth of listed companies. In addition, the company has successively participated in 35% of interest chain Technology and 30% of Harmony Cloud Technology, promoting the integration of its financial software, block chain underlying technology and container cloud technology.
Profit forecast and investment advice: we give the company EPS of 0.33,0.41 and 0.49 yuan respectively for 2017-2019, maintaining the "overweight" rating.
Risk hint: new business expansion is blocked; market competition intensifies.