Revenue increased steadily, slightly exceeding expectations: the company achieved operating income of 1,685 million yuan in 2015, an increase of 10.8% over the previous year; realized net profit of 242 million yuan, an increase of 13.1% over the previous year, slightly exceeding our previous expectations (previously estimated revenue of 1.67 billion yuan and net profit of 234 million yuan). By product, the company's embedded software and secure payment products business achieved revenue of 1.39 billion yuan, an increase of 9.9% over the previous year, higher than our previous 7.2% growth forecast; data processing services achieved revenue of 156 million yuan; and the card issuing system solution business achieved revenue of 139 million yuan. The smart card industry has maintained a boom, and the company's main business advantages are stable: the smart card industry has maintained a boom mainly from the following points: a. Increased penetration rate of Chinese bank cards; b. Stock magnetic stripe card replacement; c. Credit card demand; d. Overseas market opportunities brought about by the national RMB internationalization strategy and the “Belt and Road” strategy; e. The acceleration of the global EMV card migration process; f. The space for residents' health cards, gift cards, and city cards. Company 1) Seizing opportunities to replace chip cards in the market, its financial IC card shipments increased by 36.4% in 2015: in addition to newly issued chip cards, the country still has 1 billion magnetic stripe cards in stock to be replaced in the next 3-5 years. As the fourth largest chip card vendor in the world, the company has obvious scale and brand advantages; 2) Overseas market acceleration: Overseas market revenue in 2015 was 99 million yuan, an increase of 34.9%, and the company successfully opened the Middle East, South Asia, and Africa markets. These markets have a large population, and the bank card penetration rate is low (chip card penetration rate is lower in the future, there is less room for future development) Broad; 3) Strengthen technology research and development and deepen customer service: The company developed the “Jinbangda Cloud Platform” card issuing business model to achieve decentralized card issuance, further enhance user experience, and increase user stickiness. Expanding the diversified business sector, with strong extension expectations: the company actively lays out diversified payment products, services and platforms, and is already involved in various fields: 1) smart parks and smart community platforms. Currently, the company is mainly involved in system development, platform operation and maintenance, and smart payment product development. Currently, projects that have been implemented include Gree Smart Park, etc.; 2) mobile payment solutions. Since 2015, the company has actively participated in the development of innovative payment technology and products, and launched a mobile payment bracelet with high compatibility, convenience and high security, which is expected to be officially launched in the first half of 2016; 3) Internet payment systems, The company's “PangAnYi” electronic payment system enables intelligent interconnection of online and offline payments. Currently, the company has 1.5 billion dollars in cash, and expectations for extension are strong. Valuation and ratings: Given the positive prospects of the corporate card business and the strong growth rate of emerging businesses, regardless of the company's potential mergers and acquisitions, and raising the company's profit expectations, the company's 2016-2017 EPS is expected to be 0.32 yuan and 0.35 yuan respectively, and the corresponding dynamic PE is 8.2 times and 7.3 times, respectively. The company was given 10 times PE in 16 years for its traditional card business and 20 times PE for its emerging business in 16 years, corresponding to a target price of HK$4.40, maintaining the “increased holdings” rating. Risk warning: Smart card demand is growing faster or less than expected; industry competition may intensify.