The company recently signed the "Traffic Transit QR Code" Strategic Cooperation Framework Agreement with Shenzhen Tencent computer system Co., Ltd., Tenpay payment Technology Co., Ltd., and Sichuan Wantai Hexing Technology Co., Ltd. The four-party agreement jointly promotes the pilot and landing of "Traffic Transit QR Code" innovative application industry solutions and innovative business models in Shanghai and Xiamen, and actively recommends the implementation and promotion of partners' business and services in cities where all parties have already carried out business, as well as actively carry out cooperation in the innovative business model of "Traffic Transit QR Code".
The signing of the "Traffic Transit QR Code" framework agreement between the company and Tencent marks the initial landing of the cooperation between the company and Tencent in the field of intelligent transportation, and is expected to open a new business model. Through its own experience in rail transit, bus rapid transit (BRT) and other fields, the company cooperates with Tencent to support citizens to pay using Wechat scanning QR codes in subway, bus and other scenes through the layout of traffic QR code scanning terminals. According to the framework agreement, the cooperation between the company and Tencent will be the first to be piloted and landed in Shanghai and Xiamen, and Tencent and other parties will actively recommend the company as an important partner to promote and implement in the cities where they have already done business. As an excellent enterprise in the field of AFC, in addition to the traditional product line, the cooperation with Tencent in the field of transportation is expected to develop a new business model.
Recently, Tencent has signed a strategic cooperation with a number of prefectures and cities to vigorously promote the combination of mobile payment and transportation, which will directly benefit the company as an important partner of Tencent. At present, Tencent has cooperated with Guangzhou, Hefei, Shenzhen, Qingdao and other places. Transit QR Code has now realized offline verification without the need for user recharge. after scanning the code, the fare also supports real-time and asynchronous deduction, realizing "ride first, pay later". In the future, Transit QR Code is expected to fully infiltrate subway, bus, BRT and other urban public transport across the country, and the company as Tencent's equipment and system partner will directly benefit.
Profit forecast and investment advice: according to the performance commitment, Guozhengtong's net profit after deduction in 2017 is not less than 85 million yuan, the cumulative net profit in 2017 and 2018 is not less than 210 million yuan, and the cumulative net profit in the three years from 2017 to 2019 is not less than 367 million yuan. Without considering the factors of consolidation, it is estimated that the net profit attributed to the parent company in 2017-2019 is 0.33,0.45 and 55 million yuan respectively, which is-32%, 36% and 23% respectively compared with the same period last year, and the EPS in 2017-2019 is 0.24,0.33 and 0.40 yuan per share respectively. Maintain the "highly recommended" rating.
Risk hint: the business development of Guozhengtong is lower than expected; the business coordination between the two sides is not as expected. The landing of Transit QR Code was not as expected.