Hang Seng Electronics (600570) 2018 Annual Report Comments: Profits Continue to Rise, Seeking Benefits from Policy and Market Resonance

Benefiting from the accelerated reform and innovation of the capital market in 2019, new regulations 四川耍耍网 on capital management have gradually come into effect, capital market transactions have been active, and the company’s revenue will have accelerated growth.

On the expense side, we will continue to control personnel growth and expense growth, and the company’s profit margin is expected to further increase.

  The company released its 2018 annual report and achieved operating income of 32.

6.3 billion, +22.

38%; net profit attributable to mother 6.

4.5 billion, +36.

96%; deducted non-attributed net profit 5.

1.6 billion, +142.


In the fourth quarter, revenue reached 13 trillion in a single quarter, +27.

99%; net profit 2.

8.5 billion, +56.

99%; deduct non-net profit 2.

8.3 billion, +571.


The company announced its 2019 business plan: the main business revenue budget for 2019 is approximately 佛山桑拿网 35.

89 ppm, + 10%, the company’s 2019 budget is about 30.

08 thousand yuan, + 10%.

  Revenue growth accelerated in the fourth quarter, with wealth and Internet businesses growing rapidly.

In the fourth quarter, the company’s single-quarter revenue growth rate reached 28%, while in the third quarter, the quarterly growth rate exceeded 5%. The average growth rate of capital management business and wealth business exceeded 40%, and the growth rate of Internet business reached 80%.

According to the preliminary division of business, the growth rate of the company’s wealth business and Internet business were 43% and 69%, respectively. The wealth business mainly benefited from the new regulatory requirements of various industries; the Internet business mainly benefited from the contribution of Hong Kong’s wisdom and consolidation,Newly added some holding subsidiaries contributed revenue.

The company’s 2018 advance account surplus was 12.

9 trillion, a slight increase in stability.

Operating cash flow 9.

40,000 yuan, an increase of 16% in ten years.

We judge that the overall growth rate of the contract amount of the company is ranked because of the unsatisfactory performance of the capital market in 2018.
A slight decline in 2017 led to maintaining the growth rate of revenue, while the growth rate of advance accounts and operating cash flow was lower than the growth rate of revenue.

  Continue to control people and fees, and the net interest rate increased significantly.

The number of employees in the company reached 7,122 in 2018, +4.


The management expense ratio and R & D expense ratio total 56.

72%, a decrease of 8.

32pcts; the sales expense ratio was 27%, a decrease of 1.


The effect of controlling the company and controlling fees was significant.

The company’s net margin reached 20.

79%, an increase of 4 per year.

  New policies continue to be implemented, the market is picking up, and performance growth in 2019 is expected.
With the continuous promulgation of a new policy in the financial industry and the need for new business brought by the innovation system, the need for IT system transformation and new construction will usher in a “golden” period.

New asset management regulations, Shanghai-London Connect and CDR, science and technology board, access to third-party systems, and settlement and escrow of securities companies will become the key construction modules in 2019.

In addition, with the continuous opening of the financial market, the entry of foreign institutions will also bring about system adaptation and other needs, and further expand the market size.

We expect that 2019 will be a year of rapid increase in IT construction demand in the capital market, and the company’s performance growth can be expected.

  Risk factors: Financial regulation restricts the development of innovative businesses, and market activity declines.

  Investment suggestion: Long-term optimistic attributes of the company’s financial IT leader and its leading position in Fintech.

We adjust the company’s EPS forecast for 2019-20 to 1.


07 yuan (previous forecast 1).


28 yuan), adding 2021 profit forecast2.

71 yuan, corresponding to PE 60/42 / 32x.

Maintain “Buy” rating.