Key points of investment:
Benefiting from the CEPA framework agreement, brokerage licenses were approved: On the 20th anniversary of Hong Kong's return, Hong Kong-funded securities companies benefited from the three major breakthroughs of Hong Kong-funded securities companies under the CEPA framework: restrictions on foreign investors not being able to control, restrictions on a single license (the business scope of East Asia Qianhai Securities is brokering, underwriting, asset management, and self-management), and restrictions on domestic shareholders of joint venture securities companies being securities companies. HSBC Qianhai Securities and East Asia Qianhai Securities were approved for construction at the same time by the China Securities Regulatory Commission. As the second largest shareholder of East Asia Qianhai Securities, Yinzhijie has fully benefited from this policy at this special time. Other industrial companies and financial institutions are more difficult to reach. The company's existing technical and business resources will effectively help East Asia Qianhai Securities develop into a new type of brokerage firm driven by technology.
The foundation of financial information technology and big data consolidates the foundation of technological strength: traditional main businesses include the three major business fields of financial informatization services, mobile commerce services, and e-commerce, accounting for 23.9%, 48.2%, and 27.6% respectively in 2016. The company is technologically advanced and has rich industry experience. It already has 19 years of industry experience in the field of financial informatization. The wholly-owned subsidiary Yimei Softcom has also accumulated 15 years of industry experience in the field of mobile commerce services, making the company have an industry-leading position in the fields of image processing, pattern recognition, machine vision, workflow engine technology, big data analysis and processing, and Internet applications. The leading edge of core technology lays a solid foundation for the company to integrate technology finance and licensing to build a financial ecosystem in the future.
The license is complete, creating a technology financial control platform for a new era: Before East Asia Qianhai Securities was approved this time, the company had already obtained the first batch of scarce credit reporting licenses and participated in initiating the establishment of the Internet property insurance companies Easy Security Insurance (holding 15% of the shares), Anke Life Insurance (holding 15% of the shares, pending review and approval), and the Shanghai Insurance Exchange. The company's business layout is perfect, and it has built financial information IT technology, personal credit reporting, and big data technology as the cornerstone, with risk pricing and precise marketing as its core competencies. At the same time, the company has obtained credit reporting, insurance, and securities licenses. As a formal financial licensing agency, the business qualification threshold for future business development has been removed. There is huge space, and it is gradually entering a technology-based financial control platform.
Investment advice:
The company successfully obtained a brokerage license based on the special occasion of the 20th anniversary of Hong Kong's return and the CEPA framework agreement, and the business layout was improved. At present, the company's fixed increase of 24 million shares has been approved by the Securities Regulatory Commission. If successfully issued, it will provide important financial support for the development of future financial business. The three foundations of financial informatization IT technology, personal credit reporting, and big data technology lay the foundation for technological advantages, laid out three high-value financial licenses for credit reporting, insurance, and securities, and transformed into a financial control platform with technology finance as the underlying structure. There is huge room for a multi-pronged approach.
Risk warning:
1) The risk of East Asia Qianhai Securities failing to complete the business establishment registration process within the specified period after receiving approval; 2) it takes a certain period of time for business development and revenue generation after obtaining a financial license to be realized; 3) the risk of increased competition in traditional financial IT services.