1. Event

The company announced its semi-annual report on the evening of August 17: the company realized operating income of 149.3151 million yuan, an increase of 1.69% over the same period last year, and realized a net profit of-15.1922 million yuan belonging to shareholders of listed companies.

two。 Our analysis and judgment

(1) the overall revenue remains stable, and the reported losses are mainly due to the seasonal characteristics of the business, the decrease of downstream software projects of subsidiaries over the same period last year, the phased changes of downstream procurement and the recognition of income.

Revenue in 2016 increased by 1.69% compared with the same period last year. In the same period in 2015, operating income increased by 94.60%. The reason for this gap is that the company just went public in 2014, and Tangdi Technology was listed in the report in 2015. as a result, the growth rate of China report last year was higher than that of the same period last year. In the first half of this year, although the company presented Beichende, but because the company's traditional main business and Beichende customers are mainly bank customers, through the analysis of banking IT procurement and revenue recognition and other aspects, mainly affected by downstream procurement stages, business reform and increase, more shipments and relatively less revenue recognition in the first half of the year, Tangdi information customers for banks, third-party payments, etc., face the same similar problems. In addition, through the grass-roots research on the downstream bank IT, Tangdi Technology software projects decreased in the first half of this year compared with the same period last year, while the new business intelligent robot and community O2O projects are still in the stage of investment and promotion, and have not yet produced performance. Due to the seasonal characteristics of the above-mentioned business, the year-on-year reduction of downstream software projects of subsidiaries, the phased mode of downstream procurement and revenue recognition and other factors, resulting in reported performance losses.

From the perspective of business separation, binding equipment decreased by 36.87% compared with the same period last year, and binding equipment decreased by 23.87% compared with the same period last year. These two items belong to the company's traditional products, which are mainly affected by the stage characteristics and seasonal factors of downstream procurement. Self-service series increased by 69.82% compared with the same period last year, and we believe that it should include the company's traditional independent series and holding subsidiary Beichen de VTS and other independent series. Software development services and sales decreased by 60.31% compared with the same period last year, which we believe should be mainly due to the reduction of subsidiary Tangdi Information in downstream banking projects. Other products increased by 37.29% year-on-year, which we believe should include some new products that cannot be classified as traditional bundling, Zhang Ding and self-help series. (2) 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 the gross profit margin is basically the same as that in the same period last year.

According to the report, sales expenses increased by 67.64% over the same period last year, mainly due to the increase in the scope of consolidation; the increase in personnel costs and the corresponding increase in sales expenses for the promotion of new products; and the increase in management expenses by 55.85% over the same period last year, mainly due to the increase in the scope of consolidation. Personnel costs, research and development expenses and depreciation amortization expenses increased.

The overall gross profit margin of the company's products is 37.67%, which is basically the same as 38.01% in the same period last year.

From the gross profit margin of product separation, binding equipment, binding equipment, self-service series, software development services and sales, and other products increased or decreased by 0.02%,-1.42%, 26.05%,-9.43%,-4.59% respectively compared with the same period last year. Among them, the main reason for the 26.05% increase in gross profit margin of independent series compared with the same period last year should be the consolidation of Beichengde VTS product series, which has a higher gross profit margin than the company's traditional self-help products.

(3) the business continues to advance, and it is expected that the performance will turn from loss to win from the third quarter, and the annual performance is expected to increase 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 the leading enterprise of VTS, and the current lightweight, intelligent and autonomous transformation of bank outlets is the general trend. 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 whole bank in 2015). Beichende has a comprehensive leading edge in business, technology and other aspects. We expect the company's performance to turn to a loss from the third quarter, Wei Ying, and will continue to achieve steady growth this year.

3. Investment suggestion

The overall revenue remained stable, and the reported losses were mainly due to the seasonal characteristics of the business, the year-on-year reduction of downstream software projects of subsidiaries, the phased changes of downstream procurement and revenue recognition, etc. The growth was mainly due to consolidated statements, increased personnel costs, R & D investment, new product promotion and expense amortization, and the gross profit margin was basically the same as that in the same period last year. The business continues to advance, and it is expected that the performance will turn from loss to win from the third quarter, and the annual performance is expected to grow steadily. It is estimated that the company's EPS for 16-18 years will be 0.45,0.68,0.97 yuan respectively, which will be "cautiously recommended".

Rating.

4. Risk hint

Business progress fell short of expectations; competition intensified.