Investment highlights: Event: The company announced its 2015 semi-annual report, with revenue of 765 million yuan, an increase of 26.06% over the previous year, and net profit of 124 million yuan, an increase of 23.20% over the previous year. Shipments of financial IC cards are growing rapidly, but unit prices have declined. (1) We expect the financial IC card industry to grow by about 30% in 2015, with 800 million cards issued, and an average annual growth rate of about 25% in the future; (2) Considering that Hengbao's market share is still rising steadily, we expect the company to ship about 140 million copies of products in 2015, an increase of 40% over the previous year. At the same time, we are strongly optimistic that the company will be shortlisted for the Postal Storage, Agricultural Bank, and ICBC tenders in '16, and is expected to remain above 30%; (3) With the increase in new entrants to the market, we expect the unit price of products to fall by about 10%-15% per year, gross margin for 15-16 There is a place Decline; (4) Considering that financial IC cards currently account for about 50% of the company's total revenue, the company's performance growth in the next two years is guaranteed. Benefiting from “business change and growth”, shipments surged in tax control in 2015; at the same time, they are optimistic about the expansion of mPOS and health card business in 2016. (1) Driven by “business change and growth”, market demand for tax control markets surged in 2015. As more regional life service industries are included in the scope of business reform and growth, it is expected that the industry will maintain a high boom in the next 2 years. We expect the company to ship about 1 million to 1.3 million tax control boards in 2015 and 16, contributing to the main increase in net profit; (3) mPOS has met the rigid needs of small and micro merchants for payment, portability, and intelligent management. Currently, the industry's shipment volume is growing very fast. At the same time, since 2015, the promotion of health cards for local government residents has accelerated, and we are optimistic about these two companies in 2016 Of the field Open up. Internet financial services for small, medium and micro merchants are progressing at a rapid pace with One Card Easy. (1) The company's key subsidiary YikaEasy 2015 Semi-Annual Report: Achieved revenue of 16 million yuan, a year-on-year increase of 89%, net profit of 6.55 million yuan, a year-on-year increase of 222%, and extremely strong transformation business growth; (2) China has 60 million micro, small and medium-sized merchants. Currently, various O2O, Internet finance and other services for this customer group have only just started, and the industry continues to be booming; (3) With the Hengbao mPOS UnionPay test passing in the 4th quarter of 2015, the promotion of the YikaEasy merchant membership management system will be further accelerated, and the trillion-scale blue ocean market is worth more Expectations. Mobile payments are poised to go. Apple Pay's entry into China will stimulate the rise of mobile payments and will benefit Hengbao's SWP-SIM card and TSM platform business. At the same time, the company announced the establishment of a 500 million yuan mobile payment security industry fund at the end of 2014. We are optimistic about the company's prospects for extended mergers and acquisitions in the field of mobile payments. Maintain a “buy” rating. We expect the company's sales revenue for 15-17 to be 20.96/28.63/3,538 billion yuan, corresponding net profit of 391/5.15/619 million yuan, and corresponding EPS of 0.55/0.72/0.87 yuan, respectively. The company has excellent manufacturing control capabilities and is a well-deserved king of the Red Sea. At the same time, the transformation business is growing strongly, giving it a target price of 28.8 yuan for 12 months (40 times PE in 2016) and maintaining a “buy” rating. Risk factors: Further decline in the unit price of financial IC cards; market systemic risk.