Incident: On June 21, 2016, the company announced an investment of 20 million yuan in Suzhou Boyuan Rongtian, accounting for 15% of the shares, vertically deepening its layout in the post-railway service market. On August 1, the company issued another announcement stating that its participating company Boyuan Rongtian was listed on the national SME share transfer system.
Comment:
Boyuan Rongtian is a leading enterprise in the field of post-railway service software development. Relying on the rich resources of Yicheng Co., Ltd. and Tsinghua University, the company has formed two core products through intensive work in railway projects over the years, an integrated service management platform system for travelers and a smart station integrated management system for workers. Take the passenger service system management integrated platform as an example. The platform integrates functions such as integrated display, broadcasting, monitoring, help request, clock, query, etc., and is interconnected with systems such as fire alarms and building automation to achieve intelligent and integrated passenger services. The company's core products have a coverage rate of 85% in the passenger service systems of 18 railway administrations across the country, and are in an absolute leading position in the industry.
The participation in Boyuan Rongtian is a key part of the company's entry into the post-railway service market. Boyuan Rongtian has an absolute leading position within its business scope, and has a solid foundation, paving the way for the company to enter the field of post-railway services. Its business performance was very impressive. In terms of performance, the company's traditional main business was constrained by fluctuations in the railway investment cycle, which opened up a lot of room for growth in the company's medium-term profits. At the same time, Boyuan Rongtian is also an upstream company of EasyWeixun that was previously acquired by the company. The three complement each other in terms of business, achieving the company's complete layout in the field of post-railway services.
With scarce resources and travel big data, companies can compete in the field of consumer finance. Data is the most important resource for consumer finance. The passenger service management platform built by Boyuan Rongtian can help it obtain precious rail travel big data, such as passenger real personal information (age, whether they are students, frequent travel locations, etc.), remaining ticket information, ticket price information, passenger purchase information, real-time passenger movements, etc. These precious data provide an important resource for the company to enter consumer finance. On the one hand, companies can screen and package massive travel data and provide an API interface to consumer finance companies; on the other hand, companies can also use this big data to achieve personal credit reporting, thereby injecting consumer loans into railway scenarios, so that consumer finance can truly “fly into the homes of ordinary people.”
Investment suggestions: The company's traditional main business relies on the national railway investment cycle and is firmly on the leading position in the industry; at the same time, the prospects for the post-railway service sector that the company has vigorously deployed through equity participation and acquisition are clear; in the future, the company will focus on developing consumer finance business, with the advantages of both card licenses and resources, and the situation is very good. We are optimistic about the company's long-term development. We expect EPS in 2016-2018 to be 0.27, 0.35, and 0.44 yuan respectively, covering the “Buy-A” rating for the first time, with a target price of 15 yuan for 6 months.
Risk warning: industry expansion falls short of expectations; rapid decline in railway investment; changes in consumer finance policies
