Hang Seng Electronics (600570): Third quarter meets expectations and China-Taiwan strategy continues to advance

Hang Seng Electronics (600570): Third quarter meets expectations and China-Taiwan strategy continues to advance

Event: The company released the third quarter report of 2019 and achieved revenue of 22.

97 ppm, an increase of 17 in ten years.


Attributable net profit is 8.

40,000 yuan, an increase of 122 in ten years.


Deduct non-net profit is 3.

170,000 yuan, an increase of 36 in ten years.


The overall performance is in line with market expectations.

The growth rate of asset management business was obvious, driving the rapid growth of Hang Seng Q3.

Benefiting from the new rules on asset management and the continued implementation of bank subsidiaries, the company’s third-quarter revenue accelerated in the third quarter of 2019, driven by its asset management business, and Q3 single-quarter revenue reached 7.

73 ppm, an increase of 28 in ten years.


By industry, the growth rate of capital market business in the first three quarters reached 18.

9%, 无锡夜网 of which the growth rate of asset management business reached 26.

38%; banking growth was 10.

23%; Internet business growth rate was 14.


The company’s expense rate remained stable, including sales expense rate, management expense rate, and research and development expense rate each increased.

9%, 11.

5%, 18.


The new financial policy in 2019 has continued, and financial IT has shown a high state of prosperity. In addition to the new rules on asset management, we believe that the science and technology board will gradually recognize revenue in the second half of the year and make a significant contribution to it.

The China-Taiwan strategy continued to advance, and the productization capability was upgraded again.

At the Hang Seng Artificial Intelligence Product Launch Conference in 2019, the company 杭州桑拿网 released Hang Seng Data Center, and 4 artificial intelligence products based on data center: Zhimou Kechuangtong, intelligent algorithm trading, intelligent public opinion warning and super intelligent customer service.

This platform integrates Alibaba Cloud’s next-generation automated data asset integration and management platform, providing financial institutions with integrated platform construction, data governance, and big data AI applications.

For the IT needs of the financial industry, it must be stable, the front end is relatively rich and personalized, and the construction of the middle stage is actually in response to the rapidly changing and differentiated needs of customers.

The company actively promotes the China-Taiwan strategy and once again improves its overall service capabilities.

Cooperate with IHS Markit to expand the primary bond market.

Hang Seng and MarkitSERV, a wholly-owned subsidiary of IHS Markit, jointly invested in the registration and establishment of Hang Mai Technology, with a registered capital of RMB 70 million, of which Hang Seng has a 67% stake in the joint venture.

At present, China has become the second largest bond issuer in the world, and the pace of opening up the bond market has continued to accelerate. Until August 2019, the number of foreign investors participating in the Chinese bond market has exceeded 2,000.

The joint venture will focus on the fixed income market in Mainland China and is committed to forming a bookkeeping solution for the Chinese bond market.

This is also the first Sino-foreign joint venture established by Hang Seng, which helps to explore the international development of the company’s business.

There are a variety of information asymmetry pain points in the process of bond bookkeeping. Hang Seng is trying to build an automated bond underwriting and issuance platform and start new business.

Earnings forecast and investment rating: Based on the company’s non-recurring earnings growth in the first three quarters and the assumption that the China-Taiwan strategy continues to advance, we maintain our earnings forecast at 1.


42,1.74 yuan, corresponding to 64 for PE.

6, 52.

8, 43.

1 times.

Considering that Hang Seng is a financial IT leader and has the strongest pricing power in the market, we believe that the company’s reasonable estimation level is 56-58 times corresponding to 2020 and the corresponding range is 80-82 yuan, maintaining the “overweight” rating.

Increased risks: The slow implementation of the new financial policy; less-than-expected IT investment by financial institutions; and the trend of China-Taiwan strategy.