Main points of investment
Big data, a leading financial technology enterprise. Kangqi shares are reorganized from the acquisition of Flag Intelligence by Knight. Prior to the acquisition of Flag Intelligence, Cornell's main business was the production and sale of new hard resin optical lenses and related services. In November 2016, Knight completed the acquisition of 100% stake in Qiji Intelligence for 2.34 billion yuan. Founded in 2012, Banner Intelligence is a bank card value-added business innovation service provider, the main business includes: bank card mail order installment business, credit card bill phased marketing business. From 2013 to 2015, the annual compound growth rate of flag intelligent income reached 250%. From 2013 to 2016, the annual compound growth rate of flag intelligent net profit reached 193%, showing high growth.
Merchandise mail-order installments and credit bill installments are expected to continue to contribute to healthy profits. We believe that the traditional business of Flag Intelligence is expected to continue to contribute healthy profits to the company. (1) merchandise mail order by installment business. Banner Intelligence uses the self-developed big data analysis application model to help banks screen, analyze and classify their customer consumption behavior data, and recommend and market commodity mail order installment business to target customers through the outbound call mode of the banking system. In the first half of 2017, the merchandise mail order installment business continued to expand, with the addition of two large cooperative banking institutions. (2) credit card bill installment business. Flag Intelligence helps banks to push credit card bills by installment marketing to screened customers in the form of system outbound calls. In the first half of 2017, on the basis of the original services such as bill installment, cash installment, flexible installment and credit card activation, the company innovated its service model and newly increased the number of cooperative organizations.
Financial science and technology is constantly laid out. After the acquisition of Flag Intelligence, the company continues to lay out in the field of financial technology big data.
(1) acquisition of Jingzhong Technology. Acquired a 62.5% stake in Jingzhong Technology in November 2017. Jingzhong Technology is China's leading air travel big data service provider, mainly engaged in air travel data distribution business, software development business and providing credit data services for the financial industry and credit agencies. (2) establish Qiwo information. In 2017, Qiji Intelligence invested in the establishment of Shanghai Qiwo Information Technology Co., Ltd. Qiwo Information mainly helps bank consumer credit and credit card departments to provide financial technology support services for sub-optimal customer installment business.
A low-valued financial technology company. We believe that at present, the valuation of the company is low, the attribute of financial technology is constantly strengthened, and the trend of performance growth is clear. (1) Flag Intelligence began to consolidate in November 2016, and its performance commitments from 2017 to 2018 are 245 million yuan and 345 million yuan, respectively. (2) in November 2017, the company acquired 62.5% of Jingzhong Technology with cash. Jingzhong's performance commitments from 2017 to 2019 were 27.5 million yuan, 42.5 million yuan and 65 million yuan, respectively. (3) the net profit of Cornell's original lens business is about 53.36 million yuan in 2016, and the business is expected to maintain steady growth. On the whole, we think that the current valuation of the company is low and the growth attribute is obvious.
Profit forecast and investment advice. We believe that Kangqi's bank merchandise mail-order installment business and credit card billing installment business are expected to continue to drive the company's steady growth. After the acquisition of Jingzhong Technology and the establishment of Chiwo Information, the company's ability in financial technology big data has been further enhanced, which is expected to bring new business growth space. We estimate that the company's net profit from 2017 to 2019 will be 311 million yuan, 430 million yuan and 533 million yuan respectively, and its EPS will be 0.58,0.80,1.00 yuan respectively. At present, the corresponding PE of the stock price is 32 times, 23 times and 19 times respectively. Cover for the first time, giving a "buy" rating.
Risk hint. The risk that the growth rate of commodity mail-order installment business is lower than expected; the risk of public technology business integration is lower than expected; the risk of a decline in gross profit margin.
