Main viewpoints
1. Qian Jing was promoted to president, and Shaoshuai took over, leading Hengbao to rise again. Hengbao shares were founded and developed by Mr. Qian Yunbao, the former chairman of the board. Mr. Qian Yunbao could not continue to perform the duties of chairman and president of the company due to personal health reasons, so he resigned as chairman and president of the company. The board of directors nominated Mr. Qian Jing, Ms. Hu Zhaofeng and Mr. Lu Daoru as candidates for the sixth board of directors. The board of directors decided that Qian Jing, vice president, would act as president.
Qian Jing, the son of Mr. Qian Yunbao, has studied abroad and has a compound education background of master of law and bachelor of accounting and finance. he has joined PricewaterhouseCoopers, one of the four major accounting firms, as the new helm of the company. with professional accomplishment and rich overseas experience. We are optimistic that the Young Marshal will take over and is expected to lead Hengbao to resplendence.
two。 Hengbao shares: focus on payment The main businesses of domestic leading financial information service providers include: smart cards (financial IC cards, citizen cards, social security cards, health cards, transportation cards, ETC, road transport permits, electronic business licenses and other smart card products), terminals (Internet payment terminals, mPOS, intelligent POS, tax control panels and other terminal products), mobile payment security products (eSE, Bluetooth cards and wearable devices, HCE Cloud Flash, TEE-TA, etc.) System platform (one card system, online and offline integrated receiving system, air card issuing system, TSM system) and other electronic authentication, data security and mobile payment services and merchant member marketing services, third-party financial and merchant services and so on.
3. A model of private enterprises, based at home and abroad.
The company's business covers three major application areas of communications, financial payment and government public utilities, with outstanding market, technical and service capabilities, is the three major communications operators, major commercial banks, the Ministry of Housing and Construction, the Ministry of Communications, the Ministry of Health, the State Administration of Taxation, the railway company and other important customers of the main suppliers of related products. At present, the company is one of the enterprises with the most qualifications in the domestic smart card industry, which is a necessary condition for smart card enterprises to enter important market segments.
The company established Hengbao International Co., Ltd. in Singapore in February 2010. through the continuous exploration of overseas international business, the company's overseas market business has increased greatly, and the company will continue to strengthen the development of overseas markets in the future. expand the development of overseas markets into a new profit growth space for the company.
4. Short-term performance pains and long-term steady development:
(1) Smart card business: at present, the company is the main source of revenue, and the main raw material for intelligent IC card products is CPU chip. The company obtains card issuing qualifications and orders by participating in the public bidding of customers such as commercial banks, operators and Urban one Card, and sells them to customers according to the price and order quantity determined by bidding. The main performance driver of the business is the range of changes in card sales prices. In 2016, due to the month-on-month decline in domestic financial IC card issuance, the real-name management of bank cards and the sharp decline in product sales prices caused by intensified competition in the industry, the company's full-year profit declined year-on-year.
(2) Terminal part: continuously invest in new product research and development to meet the era of mobile payment. Internet payment terminal is a mobile terminal that is convenient for cardholders to pay and deposit IC cards anytime and anywhere in the era of mobile Internet. Internet POS products such as mPOS and intelligent POS are the replacement of traditional POS in the mobile Internet era.
The tax control panel is a necessary tax control equipment for value-added tax taxpayers stipulated by the State Administration of Taxation, and the sales price is determined by the National Development and Reform Commission. The main performance drivers of the company's terminal products are product sales and cost control.
(3) system platform: move towards the financial information service provider on the basis of one card.
Mobile payment security products provide end-to-end secure payment solutions for mobile terminals such as smart phones. The company works closely with industry chain partners to provide mobile payment security solutions suitable for different application scenarios. The company has a certain first-mover advantage in product technology, application expansion, industrial chain cooperation and so on. At present, the company's all-in-one card system, online and offline integrated receiving system, air card issuing system, TSM system) and other electronic authentication, data security and mobile payment business and merchant member marketing services, third-party financial and merchant services-based services.
Jiangsu Yunbao Financial Information Service Co., Ltd., a wholly-owned subsidiary of the company, mainly relies on the corporate customer resources and channels of small and micro banks to carry out financial and merchant service business. The company has completed the construction and testing of TMS and POSP platforms, and MPOS products and solutions have been shortlisted for related banks and related projects.
5. Investment suggestions:
The company is currently one of the enterprises with the most qualifications in the domestic smart card industry. We are optimistic about the company's leading position in the industry. It is expected that the EPS in 2017 and 2018 will be 0.24,0.29, respectively, and the corresponding PE will be 41x and 35x, maintaining the recommended rating.
6. Risk tips:
Prices continue to decline; the development of mobile payments is lower than expected