Divine Information (000555) 2019 Interim Report Review-Deducting Non-Net Profits Increased Significantly Continued Overweight Industrial Convergence

Divine Information (000555) 2019 Interim Report Review-Deducting Non-Net Profits Increased Significantly Continued Overweight Industrial Convergence
The company’s 2019H1 revenues / net profit attributable to mothers / net profit attributable to non-mothers 41 respectively.3/1.29/1.190,000 yuan, at least -0.74% /-48.44% / + 37.79%.The company’s revenue / gross margin was flat compared with the same period of last year, and non-net profit was significantly increased.The fintech strategy has achieved initial results. It has continued to increase taxation / industrial integration in the agricultural sector and has room for growth.Maintain 2019/20/21 EPS forecast of 0.43/0.52/0.61 yuan, maintaining the “overweight” level. Revenue / gross profit margins remained flat, and non-net profit was significantly increased.The company’s financial / operator / government income in 2019H1 was 17 respectively.27/12.10/10.2.2 billion, at least -0.97% / + 55.56% /-23.46%, gross margins were 18 respectively.98/19.12/16.26%, of which software and services revenue in the financial industry achieved 14.With a 79% increase, the operator industry has been significantly affected by the increase in customer purchases, and the government and enterprise industries have improved due to the decrease in the purchase demand of Internet companies.Overall, the company’s revenue / gross margin was basically the same as last year.The company strengthened its cost management and control, and the management expense ratio decreased by zero.74 PCT to 3.07%; index costs rose, and financial expense ratio rose 0.59 PCT to 1.11%.Taken together, the company’s net profit after deducting non-attribution has increased significantly. The fintech strategy has begun to bear fruit, and the space for growth continues to develop.In the first half of the year, the company’s financial industry revenue accounted for 42%. The number of new-generation distributed platforms and bank core system contract customers has doubled several times. The domestic market share has remained at the forefront.Field expansion; the number of customers contracted by Enterprise Service Bus has doubled several times, and 100+ customers have been gradually served.In July 2019, the company and Huawei released the Joint Solution for Independent R & D Banks’ Key Business and the Joint Solution for Open Cloud Banking, relying on Huawei ‘s basic software and hardware capabilities and the company ‘s industry scenario application capabilities and key business systems to help financial institutionsBusiness security and efficiency are optimal.The solution has good scalability, and the growth space is expected to expand. Increase tax / agriculture industry integration and promote innovative business models.The 杭州夜网 company grasps the potential of the bank-tax interactive policy and digital village strategy, and continues to explore industrial integration based on fintech: In terms of taxation, the company achieves direct data connection by establishing dedicated lines and system platforms, breaking the information barrier between the tax bureau and banksWhile outstanding bank credit product risk management mechanism, it has solved the financing problems of small and micro enterprises.In agriculture, the Agricultural Bank of China directly connected rural three-funded information with banks, and laid the foundation for revitalizing rural land, housing and other assets.At present, the company has a long-term strategic cooperation agreement with JD.com, which has strong alliances in industries, scenarios, data and other aspects, and is expected to innovate business models in the tax / agricultural industry. Risk factors: The development of fintech business exceeds expectations; the innovation of industrial integration business is worse than expected. Investment suggestion: optimistic about the company’s financial technology transformation and industrial integration and innovation.Maintain 2019/2020/2021 EPS forecast to 0.43/0.52/0.61 yuan, maintaining the “overweight” level.