Hang Seng Electronics (600570) Company Research Briefing: How the Capital Market Leads to Gradually Hitting Financial IT Leaders
Reform and pilot take over supervision, the three trends go hand in hand, bringing room for growth in the industry. Recently, a large number of reforms and new business pilots have appeared in the capital market. It is expected to gradually take over the industry themes that have focused on supervision and rectification in the past few years to drive development.
Looking forward to next year, we believe that the three major trends of industry technology upgrade trends, policy-driven reforms and pilots, and downstream scale expansion will bring broad growth space for the financial IT industry.
Among them, we believe that short-term business elasticity is constrained by policy-driven reforms and pilots, but technological upgrades and downstream expansion will continue to inject new impetus into the fintech industry in the medium and long term.
The cloud system of the core system and the application of the blockchain help the financial IT business model upgrade. The most obvious industry technology upgrade trend is the cloud system and supervision technology upgrade of the core system.
In December 2019, Hang Seng Electronics and Alibaba Cloud jointly launched the NewCloud financial solution in the financial sector, providing a cloud-native solution for the cloud of financial institutions’ core systems.
On December 30, at the meeting of the People’s Bank of China’s Fintech Committee to deploy key tasks in 2020, the introduction of personal financial information protection, blockchain and other technical supervision regulations will be included in one of the key tasks. Blockchain is expected to officially gain large-scale in the financial field.application.
The gradual use of new technologies will be a long-term process, but new technologies including cloud and blockchain internals have their own unique potential business models of the latest mainstream project system. While reducing performance variability, gradually expand the mining of downstream customers.Demand for innovation.
With frequent policies, the financial IT industry has directly benefited from innovative policies. In just 11 or 12 months, there have been plans to expand stock indexes, allowing wealth management subsidiaries to issue major account reforms or actions such as stock accounts, MOM products, and the New Third Board Reform.
The policy progress will directly promote the rapid follow-up of downstream financial institutions, which will generate a large number of new or reformed IT systems in a short period of time.
Taking MOM products as an example, the Hang Seng integrated solution includes investment transaction management, institutional counters, investment research management, investment investment management, unified conversion, investment consultant management, post-investment analysis management and other parts. It is expected to correspond to the parent manager.With a scale of 10,杭州桑拿000 yuan per month, the overall market space is expected to be in the hundreds of millions of dollars.
Benefiting from rich openness and customer transformation, the downstream scale of financial IT continues to expand. In the “Opinions on Further Improving the Use of Foreign Exchange” published in November, it was mentioned that securities companies will be eliminated in 2020, and the limit of 51% for rich holdings of fund companiesWe believe that this move will further drive foreign financial institutions to enter China and bring new demands for financial IT systems.
At the same time, the transition of various financial institutions to wealth management is becoming more and more obvious. It will stimulate the financial industry’s IT construction focus to shift from the core system that supports business to the peripheral system that supports services and management, driving 西安耍耍网 the industry to expand.
The expansion of the industry scale will not stimulate financial IT manufacturers’ performance growth overnight, but in the long run, it will provide financial IT manufacturers with more test fields and a wider market space.
Investment recommendations are optimistic about the company’s long-term benefit to the development of the fintech industry and maintain its profit forecast. It is expected that the company will achieve net profit attributable to its mothers in 2019-2021.
73 ppm, maintain “Buy” rating.
Risk reminder: policy implementation progress is less than expected; industry new technology adoption progress is less than expected; regulatory policy changes