Main points of the report
On March 2, 2016, Hengbao announced that the China Securities Regulatory Commission's IPO Review Committee had examined the company's application for non-public offering, and the company's application for non-public offering was approved according to the results of the meeting.
Event comment
The non-public offering has made positive progress, and the Internet financial business has progressed steadily: in December 2015, the company revised the fixed increase plan and proposed to raise an additional 1.08 billion yuan, investing 650 million yuan, 150 million yuan and 200 million yuan respectively in the construction of the service network and system of small and medium-sized micro-businesses, the acquisition of 51% equity in Shenzhen Yika Yi, and the R & D and industrialization of the overall solution of mPOS. The company's non-public offering of shares was examined and approved by the Development and Review Commission of the Securities Regulatory Commission, indicating that the construction of the company's small and medium-sized merchants service system is making steady progress. In addition, in December 2015, the company's subsidiary Shanghai Hengyi Investment plans to use 15 million yuan to participate in Hanson to acquire its 8.333% stake in order to strengthen its information security business and further improve the ecological layout of its Yunbao Financial Services business. It can be predicted that as the company's additional projects continue to land, the prospect of the company's Internet financial business will be worth looking forward to.
The smart card industry maintains a high boom, supporting the company's continued rapid growth: we reiterate that China's smart card industry remains high enough to support the company's performance to maintain a high growth trend. Specifically: 1. While the number of new financial IC cards issued is growing rapidly, the replacement demand from traditional magnetic stripe cards to financial IC cards begins to be released at an accelerated pace, supporting the rapid growth of corporate financial IC card issuance. 2. With the improvement of the NFC acceptance environment and the formal entry of Apple pay into China to cultivate users' consumption habits, China's NFC mobile payment has entered a period of accelerated development. Driven by competition, operators represented by China Mobile Limited have begun to increase subsidies for NFC mobile payment cards. Follow-up operator NFC mobile payment card collection will create a lot of market demand for the company's NFC mobile payment card. 3, with the follow-up government to increase the procurement of resident health cards, the company's resident health card business is expected to usher in rapid growth.
Steady expansion of new products, laying the cornerstone of the company's long-term growth: on the basis of the main smart card business, the industrialization of new products continues to advance, specifically: 1. Under the background of "business change", the company's tax control panel shipments have exploded, which has become a new revenue growth point for the company. 2. Centering on the mobile payment industry, the company develops a comprehensive mobile payment management platform and security solutions, TSM debugging and commercial use. In addition, its Bluetooth second-generation USBKey has entered the market promotion period, and the IC card Internet payment terminal has achieved batch shipment. In addition, the company continues to strengthen the development and promotion of new products, which will help to ensure the long-term growth of the company.
Investment suggestion: we are optimistic about the company's future development prospects, and expect the company's fully diluted EPS to be 0.68,0.85 yuan in 2016-2017, reiterating the "buy" rating of the company.