The company announced its results for the first three quarters of 2019: in the first three quarters of 2019, the company achieved revenue of 1.647 billion yuan, an increase of 17.35% over the same period last year. The net profit of returning to the mother was 168 million yuan, an increase of-6.18% over the same period last year. Realized deduction of non-return net profit of 153 million yuan, an increase of-11.30% over the same period last year.

Income is growing steadily. In the first three quarters of 2019, the company achieved revenue of 1.647 billion yuan, an increase of 17.35% over the same period last year. Of these, Q1/Q2/Q3 realized revenue of 512 million yuan / 555 million yuan / 581 million yuan respectively, an increase of 14.10% over the same period last year, 29.30% and 10.36%. In the first three quarters, the gross profit margin of the main business was 34.22%, an increase of 1.54pct compared with the same period last year. The Q1/Q2/Q3 is 32.87%, 34.21%, 35.41%, respectively.

The rate of expenses has increased slightly. In the first three quarters, the company's sales expenses and management expenses were respectively 0.62 million yuan, an increase of 22.41 percent over the same period last year. The rate of sales expenses and management expenses was 3.75 percent and 7.79 percent, respectively, an increase of 0.44pct/1.13pct over the same period last year. In the first three quarters, the company's R & D expenditure was 147 million yuan, an increase of-0.86% over the same period last year, and the R & D expenditure rate was 8.92%, a decrease of 0.80pct over the same period last year. The net profit of returning home in the first three quarters of 2019 was 168 million yuan, an increase of-6.18% over the same period last year. Among them, Q1/Q2/Q3 achieved a net profit of 52 million yuan / 57 million yuan / 59 million yuan respectively, compared with the same period last year, which was + 14.83%, 8.68%, 27.51%, respectively.

Adhere to the two major strategic development directions of financial technology and smart things, and have broad prospects in the future. In terms of financial technology, 2019 company and Ant Financial Services Group jointly launched a "new generation of distributed financial core system" for the domestic banking industry, and completed the important product upgrade of financial technology business. The new generation of distributed financial core system will build a strong mid-Taiwan capability for traditional banks and solve the problems of digital transformation of financial institutions, such as product management, fund management, account settlement and so on. In terms of Smart things, based on the existing technical capabilities of chip and end device development, artificial intelligence, cloud computing, and big data, the company has opened up full-stack IoT solution capabilities from end to cloud and from technology to application. The future has a bright future.

Investment suggestion: the company is expected to have an "over-holdings" rating of 0.44 EPS 0.55 EPS 0.69 yuan in 2021, corresponding to PE34.34/27.46/21.94 times.

Risk hint: business progress falls short of expectations and market competition intensifies