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Hang Seng Electronics (600570) 2019 Annual Results Preview Comment: Performance Exceeds Expectations Financial IT Leader Growth Accelerates

Brief evaluation of performance The company released the 2019 annual performance forecast on January 19, and it is expected to gradually realize the net profit return to mother.


42 trillion, with a median of 13.

1.7 billion, a year-on-year increase of +104.

0%; deduct non-attributed net profit 7.


15 trillion, with a median of 7.

0.94 million yuan, +54.


Performance exceeded expectations.

The release of operating analysis results accelerated, and Q4 single-quarter profit hit a record high.

According to the net profit deduction for non-return to mothers announced in the performance forecast, the company’s Q4 net profit for non-return to mothers is expected to be 4.


98 trillion, with a median of 4.

780,000 yuan, the highest quarterly profit since the company went public.

We judge that the acceleration of revenue and overlapping fee control is the main trend of large profits: restructuring, the company’s Q1-Q3 single quarter revenue acceleration trend is obvious (at least the growth rate is 11 respectively.

2%, 12.

5%, 28.

4%), through the scientific and technological innovation board, asset management new regulations and other related business revenue in Q4 concentrated confirmation, may cause Q4 single quarter revenue growth exceeded market expectations; instead, the company Q3 starting price control is obvious, the cost growth rate during the single quarter is farBelow income growth (17.

9% and 28.

4%), we judge that Q4 continues this trend.

We believe that the company’s long-term profitability has been improved through the expansion of the company’s scale, the effect of scale appears, and the company’s initiative to control expenses.

With the new cycle of policy and demand, financial IT leaders are expected to achieve a new round of rise.

We believe that the current development of financial IT is in the overlap of two new cycles: 1) The new cycle of policies-the marginal changes in regulatory policies are obvious. In the context of the expansion of the regulatory scope and the reform of the basic financial system, financial IT will benefit from policy changes for a long time.Bringing industry growth dividends; 2) New cycle of demand-prolonged, active capital market, significant improvement in downstream customer profitability; gradually, the opening of the financial market, and increased demand for accelerated influx

In the long run, the financial IT industry continues to benefit, including the “New Eleven” and the internal policies of the “Fintech Development Plan (2019-2021).”A new round of rise.
Investment recommendations We have raised our profit forecast for the company, and we expect the company to achieve net profit attributable to its mothers in 2019-2021.



47 trillion (up 16 each).

4% / 18.

6% / 13.

9%), the annual growth rate was 102.

8% / 10.

7% / 13.

7%, EPS is 1.



05 yuan.Raise the company’s target price 苏州夜网论坛 to 108.

4 yuan (up 17).

8%), corresponding to EPS 66 in 2019-2021.



9x PE, maintain “Buy” rating.

Risks indicate that financial institutions ‘IT spending is less than expected; the implementation of regulatory policies is less than expected; the opening of financial markets is less than expected; the effect of company fee control is less than expected; and the development of innovative business is less than expected.