Hundsun Technologies Inc(600570) (600570)
Fully leading the financial it track. As an old financial it supplier who has been deeply involved in the capital market for more than 20 years and covered all fields, the company keenly controls the development direction of financial technology and completes strategic iteration, transformation and upgrading in a flexible and timely manner. The “six vertical and six horizontal” strategy put forward in 2019 officially started the transition from “project system + product” to platform, and the big, medium and Taiwan strategy officially started. The company’s financial fundamentals are sound, and its performance has increased steadily under the dual pressure of covid-19 epidemic and accounting standards adjustment; Historically, the cost side has been well controlled and the profitability ranks first in the industry; The industrial chain has a strong position and abundant cash flow. The company’s R & D capability is high in the industry, attaches great importance to the construction of talent team and the improvement of organizational system, and the human efficiency ROP has a significant growth trend. Based on solid financial and R & D capabilities, the company actively carries out multi field layout, and tends to attract domestic and foreign financial technology enterprises through M & A investment to quickly make up for weak links in a short time.
Financial it and capital markets grow together. From the perspective of segmentation dimension, there is still huge room for improvement due to insufficient investment in securities it, scarce technical talent resources and insufficient application level of financial technology with cutting-edge technology as the core. Due to the lack of self-research ability of securities companies and high requirements for the stability of core systems, the leading advantage of the company in the securities it market will continue. The company has a small share in the field of banking it and insurance it, but is expected to enjoy the dividend of the overall prosperity of the industry by virtue of the expertise of wealth and asset management business. From the overall perspective, the financial IT industry is associated with the capital market. The long-term driving force lies in the deepening of financial technology empowerment in the process of market maturity, resulting in the continuous improvement of downstream customers’ it expenditure ability and willingness; The short-term driving force lies in the rigid it transformation and construction demand brought about by policy changes.
“Multi child” layout and China Taiwan strategy help financial innovation. Since 2016, the company has accelerated the layout of innovative technology, set up its own innovative business subsidiaries or participated in and controlled financial technology enterprises at home and abroad at different tracks, mainly based on end B, and continued to output innovative products, services and technologies, with initial scale and results. The subsidiary company is the “seed” of Internet innovative business, and the medium Taiwan strategy is the soil of innovative business. The implementation of the big, medium and Taiwan strategy can reduce costs and increase efficiency internally, help the formation of “Hang Seng technology ecology” externally, and force the internal and external to accelerate the process of financial innovation. We believe that the growth potential of the company’s Internet innovation business will be continuously released with the acceleration of the financial cloud process and the development of other cutting-edge technologies.
Investment suggestions:
We estimate that the total operating revenue of the company from 2021 to 2023 will be RMB 5.348/65.83/7.942 billion respectively, the net profit attributable to the parent company will be RMB 1.499/18.29/2.267 billion respectively, the EPS will be RMB 1.03/1.25/1.55 respectively, and the corresponding P / E of the current stock price will be 55.71/45.68/36.85 times. Considering the deepening of capital market reform and innovation and the continuous expansion of downstream financial IT market space, the company is expected to fully enjoy the industry development dividend with high competitive barriers, and the high performance growth trend will continue. Therefore, the company was given a “buy” rating for the first time.
Risk tips:
Policy and regulatory risks; Market risk; Operational risk; Technical risks.
