\u3000\u3000 Hundsun Technologies Inc(600570) (600570)
Key investment points:
The company is a leading provider of financial technology products and services in China. Founded in 1995, the company has formed the main business lines of large retail it, large asset management it, banking and industry it, data risk and infrastructure it, innovative Internet and so on. Over the years, the company’s performance growth has remained stable. In the first three quarters of 2021, the revenue increased by 33.48% year-on-year to 3.121 billion yuan, the net profit attributable to the parent increased by 60.78% year-on-year to 684 million yuan, and the net profit attributable to the parent increased by 5.96% year-on-year to 274 million yuan after deduction. In terms of business, large retail it and large asset management it are the main sources of revenue.
Securities asset management it demand is expected to continue to release. Regulatory side: China’s capital market reform continues to advance. Policy dividends such as rule revision, product innovation, opening to the outside world and the opening of financial management subsidiaries have released the it demand of securities asset management. With the comprehensive promotion of the registration system, the implementation of T + 0 trading system, the continuous landing of new products and further opening to the outside world, it demand is expected to further drive it demand. At the same time, the regulators issued policy documents to guide securities companies to increase investment in the field of science and technology. Industry side: with the vigorous development of China’s securities market in recent years, with the continuous expansion of the number and market value of listed companies, the central level of trading volume continues to rise, and the investment in securities it is expected to continue to increase to ensure the stable operation of business. At the same time, under the setting tone of no speculation in housing and housing, residents’ demand for wealth management is increasing day by day, and the proportion of financial asset allocation is expected to increase. With the continuous expansion of the asset management market, the corresponding it demand is also expected to increase.
Strengthen R & D investment, create a positive cycle, and further improve the bargaining power. Over the years, the company has always attached importance to product R & D and technological innovation, which is above the average level of the industry in terms of R & D investment, proportion of investment, number of R & D teams, proportion of personnel and other indicators. With strong R & D investment, the company’s product matrix is becoming richer and richer, UF3 0, o45 and other core products are continuously upgraded and iterated, the performance is continuously improved, and the market share of many products is leading. With the further consolidation of the industry position, the bargaining power of the company has been continuously improved, and the financial indicators such as operating cash flow, the proportion of accounts receivable and contract liabilities have performed healthily.
Broaden business boundaries and open up new growth space. The company has actively broadened its business boundaries and cut into core segments such as bond issuance, insurance it and bank fund management system through the establishment of joint ventures and acquisitions, which is expected to further open the growth space in the future.
Investment suggestion: the company has been deeply involved in the IT field of securities asset management for many years. Through continuous and strong R & D investment, the company has continuously improved its product power and technical ability. The market share of core products is leading, the industry position is further consolidated, and the bargaining power is continuously improved. With the continuous promotion of China’s capital market reform and the vigorous development of the financial market, the demand for securities asset management it is expected to continue to release, and the company has obvious first mover advantages and is expected to continue to benefit. At the same time, the company actively broadens its business boundaries and cuts into core segments such as bond issuance, insurance it and bank fund management system, which is expected to further open up new growth space. It is estimated that the company’s EPS from 2021 to 2022 will be 1.07 and 1.30 yuan respectively, and the corresponding PE will be 54.81 and 45.12 times respectively.
Risk warning: the implementation of the policy is less than expected; Technology advancement is less than expected; Intensified industry competition, etc.
