Events:
The company released its semi-annual report for 2017, with operating income of 357 million yuan during the reporting period, an increase of 21.80% over the same period last year, and a net profit of 44.2386 million yuan belonging to shareholders of listed companies, a decrease of 2.70% over the same period last year. The non-net profit of shareholders belonging to listed companies was 39.3673 million yuan, an increase of 8.61% over the same period last year.
Grasp the financial terminal security chip market, the leading position is stable. The company actively seized the development opportunity of the financial terminal security chip market. During the reporting period, the financial terminal security chip business income increased by 17.19% over the same period last year. The company continues to increase R & D investment, improve chip compatibility, application security level, and maintain the leading position of technology and market share.
Financial IC card domestic trend, a substantial increase in income. Central bank guidance coupled with convenience makes the penetration of financial IC cards gradually increase, gradually replacing magnetic stripe cards. At present, foreign manufacturers highly monopolize the domestic financial IC card market, and there is more room for domestic substitution. During the reporting period, the company's IC card business increased by 524.22% compared with the previous period, continuing the good momentum since the second half of 2016. Financial IC card domestic chip market share leads. We believe that the financial IC card market space is broad, and related to national security, chip replacement is an inevitable trend, the company has taken the lead in the card position and achieve large-scale sales, will benefit from the trend of financial IC card localization.
The national standard of RCC has been promulgated and its application can be expected in the future. In May 2017, the 2.45GHz RCC-based mobile payment technology developed by the company, which is mainly based on independent innovation, officially became the national standard for mobile payment. During the reporting period, the company jointly built Fujian Doka Fusion Public Service platform to explore large-scale commercial scenarios of RCC. We believe that the promulgation of RCC national standards will continue to promote the commercial process of RCC mobile payment technology, facilitate the technology to enter the mainstream market, and effectively boost the performance of the company's mobile payment products in the long run.
Strategic layout of compound semiconductors, card position industry trend. In August 2017, National Investment, a wholly-owned subsidiary, signed the Investment Agreement for the Project of compound Semiconductor Ecological Industrial Park with the people's Government of Qionglai City, Chengdu, with a total investment of not less than 8 billion yuan. According to the announcement issued on the same day, National Investment plans to cooperate with Chen Yaping's technical team to set up Chengdu National Tiancheng compound Semiconductor Co., Ltd., to build and operate 6-inch second-and third-generation semiconductor integrated circuit epitaxial wafer projects. the first phase of the project invested 450 million yuan. As new materials and devices, compound semiconductors have better performance than silicon devices in microwave communication devices, optoelectronic devices and power devices, and are the key development direction of the global semiconductor industry. We believe that the company will focus on compound semiconductor epitaxial wafer materials in the near future, extend to the upper and lower reaches of the industry in the future, form the whole industry chain of compound semiconductors, and strategically lay out the frontier of global semiconductor development. it is expected to create a new engine for long-term growth in the future.
Investment advice: buy-An investment rating. We estimate that the company's net profit from 2017 to 2019 is 1.81,2.41 and 304 million yuan respectively, and the net profit growth rate is 79.0%, 32.8% and 26.5% respectively, and the corresponding EPS is 0.32,0.43 and 0.54 yuan respectively. Considering the company's business growth and the leading position of RCC technology industry, the monthly target price of 65 times PE,6 in 2017 is 20.80 yuan.
Risk tips: the global macroeconomic downturn, the promotion of localization in the field of information security is not up to expectations, financial and other industries security and payment chip demand is not up to expectations.
