Main points of the report
Event description
On February 26, 2016, Hengbao released its 2015 results, KuaiBao. According to the report, the company's operating income for the whole year of 2015 was 1.828 billion yuan, an increase of 17.86 percent over the same period last year, and the net profit belonging to shareholders of listed companies was 373 million yuan, an increase of 27.53 percent over the same period last year. In 2015, the company's fully diluted EPS was 0.53 yuan.
Event comment
Revenue achieved rapid growth, performance continued rapid growth: it can be found that the company's operating income continued to grow rapidly in 2015, mainly due to: 1. With the rapid growth of new financial IC cards, the replacement demand for stock magnetic stripe cards to financial IC cards began to be released at an accelerated pace, and the company's financial IC card shipments increased rapidly, providing a solid guarantee for its annual income growth. 2. Under the background of "business change", the shipping volume of the company's tax control panel has increased rapidly, which provides the company with a certain increase in income. The reason for the rapid growth of net profit is that while revenue increases, the company strengthens the control of costs and expenses to provide strong support for the growth of net profit.
The smart card industry maintains a high boom, and new business development ensures the rapid growth of the company's performance: we reiterate that the company's main smart card business and new business are progressing smoothly, enough to support the continued rapid growth of the company's performance. Specifically: 1. The financial IC card industry still maintains a high boom. In addition, with the official entry of Apple pay into China, China's NFC mobile payment has entered a period of accelerated development, driven by competition. The follow-up operators will increase the procurement of NFC mobile payment cards and create a lot of market demand for the company's NFC mobile payment cards. 2, with the steady progress of the "business reform" policy, the market demand for tax control panels continues to release, supporting the company's tax control panel shipments to continue to increase; 3, around the mobile payment industry, the company develops an integrated mobile payment management platform and participates in the application development, TSM debugging and commercial promotion of the three major operators, and its Bluetooth second-generation USBKey and IC card Internet payment terminals also enter the promotion period, and the new business expansion lays a solid foundation for the company's long-term development.
Lay out Internet finance and build Yunbao Financial Services business ecosystem: in December 2015, the company revised the fixed increase plan to raise 1.08 billion yuan, and planned to invest 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 merchants, the acquisition of 51% equity interest in Shenzhen Yika Yi, and the R & D and industrialization of the overall mPOS solution, in order to improve the layout of each link of the service system of small and micro businesses. In addition, in December 2015, Shanghai Hengyi Investment, a subsidiary of the company, plans to use 15 million yuan to participate in Hanson to acquire a 8.333% stake, which will help it strengthen its information security business and consolidate its Yunbao Financial Services business ecosystem.
Investment suggestion: we are optimistic about the progress of the company's smart card and new business, as well as its layout in the field of Internet finance. We expect the company's fully diluted EPS to be 0.68,0.85 yuan in 2016-2017, and reiterate its "buy" rating.
Risk Tips:
1. The price reduction of financial IC cards may be higher than expected.
2. Mobile payment card shipments may be lower than expected
3. The progress of the company's new product promotion may be lower than expected.
If the above unexpected circumstances occur, it may lead to a deviation between the actual situation and our judgment.