The performance is in line with expectations. In 2017, the company achieved operating income of 508 million yuan, an increase of 38.35% over the same period last year, and a net profit of 88.1634 million yuan, an increase of 16.57% over the same period last year. The company plans to increase 8 shares for every 10 shares and pay out 2.5 yuan (including tax). Revenue in the first quarter of 2018 was 104 million, up 8.7% from the same period last year, and net profit was 13.1714 million, up 5.05% from the same period last year.
Endogenesis and extension, layout the future. In 2017, the company actively plans the future in the form of endogenous extension. On the one hand, in 2017, the company increased investment in blockchain, big data, artificial intelligence and other new technology research and development, and promote the landing of products. The number of R & D staff expanded to 1012 in 2017, compared with 440 in the same period last year.
Overall R & D investment reached 95 million, an increase of 41 per cent over the same period last year. On the other hand, the company actively carries out cooperation and investment at home and abroad to lay out future development. According to the announcement, in 2017, the company established a joint venture with Qianfang Haojin (Tianjin) Co., Ltd. in Hong Kong to establish Qianfang Haojin Financial Technology Co., Ltd., focusing on the payment markets in Hong Kong, Macao and overseas regions; participate in Shenzhen Nanshan Baosheng Village Bank, expand new markets and business, focus on the business needs of small and medium-sized banks.
Fintech business is progressing smoothly. The company reached strategic cooperation with IBM in blockchain technology, actively discussed business application scenarios with leading financial institutions in Hong Kong, combined the business blueprints and technical blueprints in the target case for customers, transformed them into a pilot project and formed the simplest feasible product MVP (Minimum Viable Product), and actively promoted the transformation of MVP into practical application. In 2017, the company proposed the first project "CCBA Blockchain for Bancassurance Project" in China China Construction Bank Corporation (Asia) Co., Ltd. (CCB Asia) successfully implemented. The successful implementation of the project can realize the real-time sharing of insurance policy data and optimize the bancassurance business.
Investment advice: the company's financial IT business has a strong growth momentum, forward-looking layout of Fintech business, and made good progress, is expected to become an important growth pole of the company in the future. The company is expected to have an EPS of 1.27,1.62 yuan in 2018 and 2019, giving a buy-A rating for the first time, with a six-month target price of 55 yuan.
Risk hint: increased competition in the industry leads to a further decline in gross profit margin.
