The results in the first half of the year were in line with expectations, and revenue in the second quarter increased by 29% over the same period last year. According to the company's semi-annual report for 2017, operating income reached 197 million yuan in the first half, up 41.62% over the same period last year; operating profit was 29.8274 million yuan, up 27.56% over the same period last year; net profit of shareholders belonging to listed companies was 28.038 million yuan, up 33.63% over the same period last year; and basic earnings per share was 0.27 yuan, up 35% over the same period last year. According to the business classification, the company realized operating income of 178 million yuan, 10.11 million yuan and 9.43 million yuan in software development, maintenance services and system integration in the first half of the year, an increase of 50.3%, 47.8% and-33.59% over the same period last year. At the same time, according to the calculation of the second quarter, 2017Q2 realized operating income of 102 million yuan, an increase of 29.26% over the same period last year, and the net profit of shareholders belonging to listed companies was 15.5 million yuan, an increase of 15.59% over the same period last year. The increase in operating revenue mainly comes from the growth of the company's revenue from software development and technical maintenance.
The core customers of large commercial banks have obvious advantages: the company has cultivated the core customers of large commercial banks for many years and is committed to providing professional IT services such as software development for banks. At present, the company's core bank customers have covered Bank of China Ltd., BOC Hong Kong (Holdings) Limited, Bank of East Asia, Wing Heng Bank and other large banking institutions at home and abroad, occupying the core customer advantage of large commercial banks. The fierce competition in the downstream banking industry and the background of improving the service level of information technology promote the rapid development of the industry. According to the market forecast of IDC, the compound growth rate of the bank information market will reach 23.14% from 2014 to 2018, and the market size will reach 41.974 billion yuan by 2018.
Strengthen technical R & D cooperation, Fintech business continues to advance: banks have higher requirements for digitization, the company has the ability to provide various commercial banks with professional financial IT services based on Internet, big data, cloud computing and other multi-technology platforms. At the same time, the company actively promotes the application of artificial intelligence, blockchain and other technologies, promotes the deep integration of science and technology without finance, and does not cooperate with IBM China Hong Kong Co., Ltd. actively seize the opportunities brought about by the development of blockchain technology in Hong Kong and the banking industry. At the same time, Baofang Haojin Technology (Tianjin) Co., Ltd. signed the Strategic Cooperation Framework Agreement, which has the advantage of carrying out a series of strategic cooperation in blockchain and mobile payment.
Investment advice: our company forecasts earnings per share of 1.05, 1.41 and 1.75 yuan per share from 2017 to 2019, respectively. Give the suggestion of increasing holdings-A, the target price for 6 months is 47.3 yuan.
Risk hint: the company's business does not meet expectations; the promotion of financial technology business does not meet expectations.
