The performance is in line with expectations. The company announced that its operating revenue in 2016 was 1.385 billion, up 28.70% from the same period last year, while the net profit belonging to listed companies was 123 million, up 1.3% from the same period last year. Of this total, the IT business achieved revenue of 1.023 billion, an increase of 28.37% over the same period last year, while the environmental protection industry achieved revenue of 352 million, an increase of 31.01% over the same period last year. The company acquired in August 2015 achieved operating income of 183 million yuan and net profit of 45 million yuan in 2016. The extension integration was smooth, which contributed to the growth of performance. At the same time, the company announced the establishment of Pan-Thai Company, investment in interest chain Technology and Harmony Cloud Technology, the establishment of Financial big data Research Institute, the exploration of new business models such as consumer financial cloud platform, and the layout of new technology areas such as big data, blockchain and container cloud, continuously adding Fintech.

Dig deep into the field of financial IT, the Internet and mobile terminals help financial informationization. The company has been deeply engaged in traditional financial IT business for 20 years, and mainstream products such as process banking, electronic banking and image archives continue to lead the market, constantly innovating and upgrading to build a solid foundation. In the Internet financial business, it has successfully developed products in the areas of bank credit information and asset trading, launched a supply chain financial cloud platform that provides full-process services, and invested 12.8 million yuan to set up Pan-Thai Technology, which is involved in consumer finance, to achieve diversified innovation and obvious synergy. On the mobile side, relying on subsidiary technology craftsman information into the field of mobile finance, successfully signed Pudong Development Credit Card and Ping an Bank app, the development of bank mobile clients and online shopping malls, continue to extend the original banking business. Making use of the accumulation and precipitation in the field of financial IT and the multi-point layout of the company to promote financial informatization, it has basically achieved full coverage of financial IT business and outstanding card position advantages.

Continue to add Fintech to promote the research and development of technologies such as big data, cloud computing and blockchain. Big data field, set up Finance big data Provincial key Enterprise Research Institute, complete financial big data value mining for rich scenarios; in the field of cloud computing, invest in Harmony Cloud Technology, relying on SEL Lab of Zhejiang University, using container cloud products and technology to help financial customers improve their technical capabilities and promote their business development in the field of Fintech. Block chain technology field, participate in interest chain technology, build China Zheshang Bank digital mobile bill platform, and explore a new Internet business operation model. The company continues to increase its Fintech, actively promoting the research and development of advanced technologies such as blockchain, big data, cloud computing and its application in financial business areas such as risk control, precision marketing and asset trading, which is expected to significantly increase the company's performance as synergy appears in the future.

Investment suggestion: the company ploughs the financial IT field, the extension integration is smooth, the multi-point layout, has basically realized the financial IT business full coverage, the card position advantage, promotes the performance growth. Continue to increase Fintech, invest in Harmony Cloud Technology and interest chain Technology, establish Financial big data Research Institute, and promote the research and development of technologies such as big data, cloud computing and blockchain. With the full opening of synergy in the future, the performance is expected to increase. It is estimated that the company's EPS from 2017 to 2018 will be 0.32 yuan and 0.37 yuan respectively, maintaining the "buy-A" rating, with a six-month target price of 22 yuan.

Risk hint: industrial integration is not as expected; financial IT business development is not as expected.