The performance is in line with expectations. The company's operating income in the first three quarters of 2017 was 2.065 billion yuan, down 15.82 percent from the same period last year, and its net profit was 208 million yuan, an increase of 29.88 percent over the same period last year. Of this total, revenue in the third quarter was 801 million yuan, down 1.22 percent from the same period last year, and net profit was 38.8714 million yuan, down 68.61 percent from the same period last year.
The deduction of non-net profit has greatly increased, highlighting the effectiveness of the transformation. The company deducted 39.96 million non-net profit in the first three quarters, an increase of 33.21% over the same period last year. It should be noted, however, that most of the company's results in the first three quarters still come from investment gains resulting from the sale of Zhonghe technology shares. As Huatongyun completed the transfer of assets on August 18, the company's operating performance in the second half of the year is expected to continue to accelerate improvement.
Artificial intelligence business has made new breakthroughs and is expected to grow into a new growth point. 1) Transport industry:
The independent real-name check gate developed by the company's net New Electric has successfully passed the online debugging and testing of the China Academy of Railway Sciences. At present, it has been used in Weihai and Harbin stations. In the future, the company will further cultivate face recognition technology, in the crowded transportation hub, through massive video data comparison standard face database, to achieve monitoring and alarm, image detection, intelligence research and other functions; 2) financial industry: the company actively develops robot investment business, and has launched APP to help investors optimize their investment strategy.
Major breakthroughs have been made in social security innovation business. The company's mobile medical insurance payment APP-- Medical Express payment continues to open up the market, and has launched and officially opened services in Zhejiang Litongde Hospital and Zhejiang Hospital. In addition, the company has successively established strategic cooperative relations with Ant Financial Services Group and Ping an Medical, which highlights the strategic value of social security information business, and is also conducive to the accelerated landing of innovative business.
Investment advice: after the completion of the acquisition of Huatong Cloud, the company's business structure adjustment is coming to an end, and its performance has been further consolidated, eliminating the worries of transformation and laying a good foundation for the follow-up development of artificial intelligence. It is expected that the EPS of the company in 2017 and 2018 will be 0.43 yuan and 0.45 yuan, maintaining the buy-A rating, with a 6-month target price of 17 yuan.
Risk hint: the new business development of artificial intelligence is lower than expected.
