Event: the company released its 2016 annual report, with revenue of 1.385 billion yuan, an increase of 29% over the same period last year. Net profit belonging to shareholders of listed companies was 122 million yuan, up 1.3% from the same period last year. Net profit after deducting non-recurring profits and losses was 112 million yuan, an increase of 26% over the same period last year.
Deep ploughing in the field of financial IT, the performance growth rate increased significantly. The company provides IT software products and services for financial institutions, has accumulated more than 20 years of financial IT business experience, and has an in-depth understanding of international and domestic financial business trends. In 2016, the business volume provided to financial institutions accounted for more than 70% of the total business volume, and the income and net profit deducted from non-return increased significantly.
The advantage of customer resources is outstanding. The characteristic of financial customers is that the stability of financial IT products is very high, so customers are more cautious in changing IT products, the barriers of the industry are relatively high, the moat is relatively wide, and there are fewer new competitors. After more than 20 years of continuous operation, the company has gained the understanding of customer business and accumulated the ability to provide comprehensive and complex customer service, forming a strong core competitiveness.
Continue to add Fintech. Through the combination of endogenesis and extension, the company explores the transformation from a financial IT provider to a financial technology service provider. The "Micro Carpenter O2O aggregation Cloud" of the holding subsidiary Shanghai Science and Technology Co., Ltd. integrates "marketing tool system", "account stored value, payment system" and "ingenuity" WeChat account. After full SAAS, it has realized the expansion and operation capacity of multiple merchants across channels, including Pudong Development Credit Card Wechat and APP, Ping an Bank APP and other customers. In 2016, the company invested in the establishment of Hangzhou Xinyada Pan-Thai Technology, which is located in the consumer financial technology platform, and has developed storage platform, data aggregation platform and so on. The Financial big data Research Institute was awarded the provincial key enterprise research institute, and the company quickly penetrated the cutting-edge technologies such as blockchain and cloud computing by participating in Hangzhou fun chain and Hangzhou Harmony Cloud Technology.
Investment suggestion: the company has outstanding resource advantages in the field of financial IT and the layout of cutting-edge financial technology, which is expected to benefit from the outbreak of domestic financial technology. It is estimated that the company's net profit growth rate in 2017-2019 is 22%, 20% and 21% respectively, and the pencil EPS is 0.34,0.41 and 0.50 yuan respectively. Maintain the "overweight" rating.
Risk hint: the risk that financial regulation tends to be strict.
