Introduction to this report:
The company's layout in the card business will drive the company's overall business to an inflection point, and the blockchain business layout is expected to take the lead in the market. The first coverage gave a rating for increasing holdings, with a target price of 36 yuan.
Investment highlights:
The first coverage gave a rating for increasing holdings, with a target price of 36 yuan. The 2016-2018 EPS was $0.51/0.57/0.67. Based on two valuation methods, PE and PS, the target price was given 36 yuan, covering the “increase in holdings” rating for the first time.
2016 will be a key point for large-scale application of blockchain technology. The security and stability of blockchain technology has gone through several years of testing and verification of Bitcoin. Under the catalyst of Ping An's addition to R3 and the establishment of the Golden Chain Alliance, the mass base continues to expand. It is expected that it will enter the application stage on a large scale starting in 2016, with the financial payment scenario bearing the brunt of the impact.
With the company's current blockchain layout, the product implementation cycle will be shorter than the overall market. Feitian Chengxin has many years of service capabilities and product accumulation in the payment industry, and is rich in experience. Currently, the company's virtual digital currency storage device in blockchain is the easiest product form to implement and most directly in demand in the market. In the future, the audience for various types of digital currencies, such as Bitcoin and Ether, will surely expand further, and corresponding demand will continue to increase. Therefore, we believe that the implementation cycle of the blockchain field where the company is currently located will be shorter than the market as a whole, and the company will be one of the first listed companies to benefit.
In terms of performance, the company's performance declined in 2015, and we think 2016 will be an inflection point in the company's performance. The smart card business will be the core driving force for the company's next stage of growth, and other card businesses represented by Disney Transportation Cards will explode in 2016, bringing stable performance support to the company. At the same time, in terms of market expansion, the company will use localization methods to vigorously expand overseas markets, which will also form an upward growth engine.
Risk warning: Market competition intensifies, innovative business development falls short of expectations