Key points of investment: Infoto is a leading manufacturer and industry solution provider of electronic security products in the industry, leading the world in the era of analog surveillance, transforming network, HD and intelligent video solution providers in recent years. Developed intelligent video management platform and high-definition digital cameras and other products. Through mergers and acquisitions, the company continues to develop Ping an City, smart home, industry applications and other markets.

1. The outline of business transformation is emerging and the multi-directional layout is developing steadily: the company is the leader in the security industry in the analog camera era. In recent years, due to the relatively slow pace of transformation in the digital camera era, the performance growth has slowed down. In 2014, the company fully completed the transformation of its product line from analog to digital, integrating the superior products and technologies of its acquired subsidiary March in banking, chain retail and other fields with Infineto's existing product system to tap product advantages. The company issued a private placement plan on September 11, 2015, with a plan to raise no more than 752 million yuan per share, which will be used for the global industrialization project of Ping an City, the global industrialization project of smart home and the Internet + social video security operation service platform project. After experiencing the product transformation, the company refocuses on the two major business areas of Ping an City and smart home, and is expected to regain growth.

two。 The business of Ping an City is gradually expanding: in July 2015, the company acquired Zangyu Technology for RMB 210 million. Zangyu Technology is the overall solution provider of video surveillance in Ping an City and Intelligent Transportation. Zangyu successfully provided video surveillance management platform equipment and on-site guarantee for projects such as intelligent transportation in Wenzhou, Zhejiang and Ping an city in Hefei, Anhui. The merger and acquisition of Zangyu Technology will greatly enhance the domestic channel capacity of Infineto, making it have domestic sales and service experience in safe cities. In the future, the company will rely on the Wenzhou model of Zangyu Technology to expand its business in safe cities in major cities across the country. At the same time, the company actively tries to cut into the field of social surveillance video integration operation, and cooperates with public security departments and telecommunications companies to provide value-added services through the integration of social video resources. On the other hand, in August 2014, Indian Prime Minister Moody's Corporation announced that he would invest more than 700 million pounds to promote the "safe City" project in 100 cities in India. The company's forward-looking layout has been deeply ploughing the Indian market for many years. The products have successfully entered the Mumbai Ping an City project and provided it with camera products. The company will further seize the growth opportunities in the field of security in emerging markets such as India and the Middle East to create an integrated solution of software and hardware. Expand sales in overseas markets.

3. Smart home self-assembly market is broad: the company's acquisition of SWANN is an Australian-based company engaged in DIY security video surveillance products sales, is the first brand in the civil security self-assembly industry. SWANN mainly provides a combination of cameras and NVR/DVR products for home users, and based on this, it has launched a series of smart home products, including door magnets, alarms and so on. Its smart home products are mainly sold through retail channels such as chain supermarkets, which are purchased and installed by users, and are well-known in European and American markets. SWANN has proved that the business model of overselling through chain stores is sustainable and has successfully expanded the market in the United States, Australia and the United Kingdom. In addition to the European and American markets, the company plans to extend the business model to China, South America, India and other regions in the future. And take video surveillance and alarm products as the entrance, cut into the field of security operation, create cloud platform services, and provide value-added operation services.

4. Give Infoto an overweight rating: the company is a leading manufacturer of electronic security products and an industry solution provider, turning to digital camera products and actively expanding Ping an City and smart home business. The company's third quarterly report has issued a forecast of annual results. Thanks to the merger of M & A companies, the net profit attributed to shareholders of listed companies in 2015 is 3500-45 million yuan, and we estimate that the company's EPS for 15-17 years is 0.06,0.08 and 0.10 yuan respectively. The company's current share price is valued at 208 times, 162 times and 125 times for 15-17 years, respectively. At present, the shareholding ratio of major shareholders is still more than 68%. If the company continues to do industrial expansion through mergers and acquisitions in the future, there is still plenty of room for dilution, we think that all the businesses of the company are gradually improving, and there is more room for growth in the future.

5. Risk tips: 1, Ping an city project development progress is not as expected 2, smart home expansion is not as expected in Europe and the United States market