The company issued an announcement on the reduction and adjustment of its holdings at noon today. Qianjun Investment announced that it would reduce its holdings by no more than 2.80% of the company's total shares. Mr. Wei Kaiyan, the actual controller, did not reduce his holdings of the company's shares under this plan, and promised not to reduce his direct or indirect holdings of Zhaogi Technology shares in the next six months.

Short-term overfall, investment opportunities highlighted. The announcement of the reduction of holdings on January 11 became a "bird" in the whole market, and the market sentiment led to a sharp correction in the stock price. At that time, based on the survey, we judged that the actual proportion of reduction would be much lower than the 10% in the original announcement, and the analysis judged that the willingness of major shareholders to reduce their holdings was very low. Now that our judgment has been verified, the company's controlling shareholder has announced that it insists on a plan of no more than 2.8%, while the actual controller, Mr. Wei Kaiyan, will not reduce his stake in the company under this plan. and promised not to reduce its direct or indirect holdings in Zhaogi Technology in the next six months. The company's plan demonstrates the confidence of the controlling shareholders and actual controllers in the development of the company.

The paper pattern recognition product is progressing smoothly and has been recognized by bank customers. In mid-2015, the company's paper pattern anti-counterfeiting products were commercially promoted in about 20 domestic commercial banks. According to the feedback of customers, the company has greatly improved the function of the paper pattern anti-counterfeiting products and improved the product design, and has nearly completed the research and development of the second generation products, so that the paper pattern anti-counterfeiting products can bring greater value to customers and be more popular with customers. it has laid a solid foundation for large-scale promotion to China Finance Online Co Ltd in 2016. Based on reasonable calculation, we estimate that the hardware sales space of this product in China is 37.5-7.5 billion. We estimate that there may be two ways to sell paper pattern recognition products in the future, one is to sell equipment in the way of the whole machine, and the other can be similar to leasing and collecting service fees by installments, which will have a broader revenue space.

The new generation (multi-function) electronic payment cipher has made significant commercial progress in 2015 and has begun to ship. The company's new multi-function codec not only covers all the functions of the traditional payment cipher, but also supports many expandable functions based on the mobile interconnection system, such as mobile network banking, mobile examination and approval, mobile payment, mobile office, etc., also known as Bank-Enterprise Communications. In 2015, the "multi-function encoder" was first certified and licensed by the State Cryptography Administration among similar products, and made significant progress in commercial use. By the end of 2015, the product has been supplied to some customers, and the Internet characteristics of its underlying PaaS+SaaS are obvious, which is expected to provide an important contribution to the company's performance in the future.

Maintain the "buy" rating and maintain the profit forecast. It is estimated that the eps for 2015, 2016 and 2017 will be 0.12, 0.72 and 1.16 yuan, corresponding to the price-to-earnings ratio of 230-38-24.