Event
Huijin Co., Ltd. released its 2016 annual report. In 2016, the company achieved a total operating income of 676.019 million yuan, an increase of 32.83% over the same period last year, and a net profit of 45.7367 million yuan, a decrease of 14.29% over the same period last year.
Dragged down by Tang Di and other subsidiaries, the overall performance was lower than expected.
The company is actively expanding the industrial layout, increasing the profit model, and the table income has increased significantly. Some subsidiaries newly established or merged in the past two years have entered the growth period in 2016, and their operating income has grown rapidly.
However, due to the increase of marketing and R & D investment in fund-raising projects, personnel costs have increased, and the cost has increased faster during the period. Subsidiary Tangdi Technology due to large investment, did not meet the performance commitment, in addition, Delanite, Oriental Xinghua and other subsidiaries are in a state of loss, resulting in a decline in net profit.
Benefiting from the lightweight and intelligent transformation of bank outlets, Beichende is expected to accelerate its growth.
With the influence of the marketization of interest rates, homogeneous competition in the banking industry, rising labor costs and other factors, the intelligent and lightweight transformation of bank outlets is regarded as a priority strategy by the major banks. Among them, the emerging intelligent technology and equipment play a key role in the application deployment of the network, and will play a more important role in the future banking business reform. Bank IT enterprises have entered a period of accelerated change.
Beichengde has a deep understanding of banking business processes and strong software development capabilities, while the parent company has many years of financial IT hardware manufacturing capabilities, complementary advantages to the "bank overall solution provider" transformation. Beichende is a leading enterprise in the VTS field, Agricultural Bank Of China project to establish a benchmarking effect, Beichende VTS market share is expected to further increase, performance will accelerate growth.
Service robots are expected to expand from banks to more industries this year.
Bank of Communications first introduced the bank intelligent service robot, forming a better "demonstration effect" and "advertising effect". The "Tangbao" bank service robot has been launched in some commercial banks and service places in 2016, achieving small batch production and sales, and is expected to be released this year.
The domestic banking industry has a clear lead in intelligent application, and it is expected to transplant and export to customers in other industries by virtue of core equipment and solutions in the future. Shanghai Tangdi, a subsidiary, will give full play to its advantages in intelligent robots and intelligent service terminals, combined with the parent company's high-end manufacturing and processing capabilities, is expected to promote the use of products in multiple industries outside the banking field. In addition to banking, other service industries, such as hospitals, lottery, government and other industries, are also facing the general trend of upgrading from traditional manual services to intelligent service equipment.
Coverage for the first time, giving "overweight" rating
We believe that over the past 16 years, the company's overall performance has been dragged down mainly by excessive investment by subsidiaries. Driven by the intelligent transformation of banks, the company's R & D investment is expected to achieve results in 2017. Coupled with the continuous promotion of the Tangbao intelligent community project, it will gradually change from an one-way investment model to an independent hematopoiesis model, and the drag on the company's performance will be significantly reduced. The company is expected to make a net profit of $0.79 million, $104 million and $0.24 million for 2017 and 2018, respectively, and EPS 0.15 and 0.19 for 2019 respectively. Coverage for the first time, giving a "overweight" rating.
Risk hint: business development is not as expected; the progress of fund-raising projects is not as expected.
