Recently, Li Chao, vice chairman of the Securities Regulatory Commission, said while attending the 2024 Fintech Conference Financial Technology Forum that it will accelerate the application of fintech in the capital market and promote the in-depth application of new technologies such as artificial intelligence in the capital market. As a financial IT leader, the company has core card advantages, and is expected to benefit deeply from the digital transformation of finance and maintain purchase ratings.

Key points to support ratings

The digital transformation of finance is accelerating, and the company is expected to benefit deeply. Recently, Li Chao, Vice Chairman of the Securities Regulatory Commission, said while attending the 2024 Fintech Conference Financial Technology Forum that it will accelerate the application of fintech in the capital market, continuously improve the digital capability maturity evaluation system and index system of industry institutions, and carry out evaluations to target real businesses, rely on real scenarios and innovate service models to promote the in-depth application of new technologies such as artificial intelligence in the capital market. As a financial IT leader, the company has core card advantages and is expected to benefit deeply from the digital transformation of finance.

The product continues to be iterated, and the core competitiveness is expected to continue. On the wealth and brokerage product line, the company's next-generation core system UF3.0 continues to be iterated, and many new brokerage firms have been signed. On the asset management side, O45 has been launched in a number of bank financial planners and fund companies in 2023. The company promoted the construction of IBOR platforms for bank financial managers and leading fund companies based on the IBOR platform, and successfully signed an IBOR base construction contract for a leading fund company. In the field of investment and research, the trial response of the WarrenQ Smart Investment and Research Workbench was good. With the continuous development and iteration of the company's products, the company's core competitiveness is expected to continue.

Equity incentives demonstrate confidence in long-term development. Recently, the company announced an equity incentive plan. It plans to grant 33.35 million share of stock options to directors, executives, core employees and other incentive targets at a price of 17.04 yuan/share. The assessment target is based on 2023 net profit, and the annual net profit growth rate for 2024-2026 is not less than 10%. The release of the equity incentive plan is expected to further boost the company's performance growth and demonstrate confidence in the company's long-term development.

valuations

Net profit due to mother for 24-26 is estimated to be RMB 1,47, 17.2, and RMB 2.05 billion, EPS is 0.78, 0.91, and 1.08 yuan (considering short-term pressure on the company's performance, downgraded 30% to 37%), and the corresponding PE is 34X, 29X, and 24X, respectively. As a financial IT leader, the company has core card advantages, and is expected to benefit deeply from the digital transformation of finance and maintain purchase ratings.

The main risks faced by ratings

Customer development falls short of expectations; cost control falls short of expectations; technology research and development falls short of expectations.