\u3000\u3000 Shenzhen Fortune Trend Technology Co.Ltd(688318) (688318)
Financial it leader, with "buy" rating for the first time
The company mainly develops market trading system for securities companies, covering more than 90% of China's securities institutions. In 2020, the growth rate of securities it investment reached 63.7%, and there is still broad growth space for benchmarking overseas. At the same time, new demands such as science and innovation board and Beijing stock exchange continue to emerge, and the prosperity is expected to continue. The company has strong profitability and abundant cash reserves, actively expand its product line, open up growth space, and benefit from the development opportunities brought by financial innovation. We estimate that the net profit attributable to the parent company from 2021 to 2023 will be RMB 354 million, RMB 472 million and RMB 623 million respectively, the corresponding EPS will be RMB 532, RMB 708 and RMB 935 respectively, and the corresponding PE of the current stock price will be 36.3, 27.2 and 20.6 times respectively. For the first time, give a "buy" rating.
Securities it investment is growing rapidly, and new demand is emerging
(1) according to the data of the Securities Industry Association, the growth rate of securities it investment in 2019 and 2020 is 40.1% and 63.7% respectively, and the scale of IT investment in 2020 will reach 24 billion yuan. According to the annual report data of overseas and Chinese TOP10 securities companies in 2019, the average IT investment of overseas TOP10 securities companies is 16.8 billion yuan, 19.8 times that of Chinese TOP10 securities companies. There is still broad growth space for it investment of Chinese securities companies. (2) The securities industry continues to innovate and develop. Securities businesses such as the science and innovation board and the Beijing stock exchange have brought new demand. IPv6, appropriateness management and information security required by the policy have also brought about the transformation and expansion of the securities market trading system. The prosperity of the industry is expected to continue.
Expand product lines, open up growth space, and financial information and innovation bring good opportunities for development
(1) the company's core business is software sales and software maintenance services for b-end securities companies. In 2020, b-end revenue accounts for 83%, covering more than 90% of China's securities institutions, and is expected to fully benefit from the high prosperity of securities it. The company has strong profitability, abundant cash reserves and active investment to continuously expand its product line. At present, the projects under research include visual financial research terminal, artificial intelligence platform, professional investment and trading platform, industry safety monitoring system, etc. new products are expected to open up growth space. (2) The company has an independent security research team of state secret security and information security services, and has the core technology of financial information security. At the same time, the company proposes full stack information technology innovation to provide brokerage customers with solutions such as localized cryptographic algorithm transformation, information creation, terminal information security, quantification and financial terminals, meet the requirements of financial information creation, and is expected to benefit from the opportunities brought by localization in the future.
Risk tip: the IT investment of securities companies is less than expected; New product development was less than expected.
