Maintain solid performance in 2019: the company's total revenue in 2019 was 1.416 billion yuan (the same below), which was basically the same as the same period last year, of which the revenue from the embedded software and payment business segment fell 11.7% to 980 million yuan from the same period last year. Revenue from the platform and services segment increased 44.9% to 436 million yuan year-on-year. Gross sales margin increased by about 2.2% year-on-year to 399 million yuan, and gross profit margin rose 0.6 percentage points year-on-year to 28.2%. Net profit of 176 million yuan, basic profit per share of 0.214 yuan, proposed final dividend of HK10 cents per share and special dividend of HK6 cents per share, plus interim dividend of HK4 cents, the total annual dividend is as high as HK20 cents, maintaining a high level of dividend.
The core card business structure is still being adjusted: although the decline in demand for general-purpose and basic products has led to a significant decline in revenue, the proportion of innovative and high value-added products has increased, and the gross profit margin of the business is still 23.9%. The company's advantages in innovation and personalized products will be in line with the "big retail" strategy successively implemented by the domestic banking industry. At the same time, we believe that companies can still get incremental demand in non-financial products such as retail prepaid cards.
The platform and service business has great room for growth: benefiting from the large domestic demand in the field of intelligent self-service, the revenue of this division has increased significantly, of which the revenue from equipment sales increased by 23.1% to 176 million yuan compared with the same period last year. Revenue from data processing services increased by 64.7% to 259 million yuan, while gross profit margin remained at 37.8%. We believe that the company's business has fully benefited from the three major scenarios in recent years, such as the intelligent transformation of the network of financial institutions, social security card issuance and government "Internet +" reform, such as the great increase in demand for intelligent self-service card issuing equipment. We believe that this business will still benefit from: first, the continuous progress of the digital transformation of domestic banks; second, the Ministry of Human Resources and Social Affairs aims to set up at least 5000 fast card issuing outlets by the end of 2020. it can also bring considerable incremental equipment and service demand for the company. Third, based on the company's years of deep cultivation and accumulation in the fields of finance, social security, medical care, transportation, retail and government affairs, the smart device business will gradually expand to more service application scenarios.
Adjust the target price to HK $2.46 and buy rating: we believe that the company's card category and platform services business still have room to expand in the financial and non-financial sectors, and the revenue side is expected to expand with the expansion of product application scenarios. at the same time, the innovation and upgrading of card business and the increase in the proportion of platform services business will help the company to maintain stable profitability. The company's own business and supply chain were limited by the epidemic, but in view of the suspension of banking business caused by the domestic epidemic, we adjusted the shipping forecast of the company's card products and adjusted its target price for the next 12 months to HK $2.46. This is equivalent to 10 times forecast earnings per share in 2020 and 2 times forecast earnings after excluding available net cash, which is still 62.9% higher than the current price. The dividend yield based on the current price is more attractive and the buy rating is maintained.
