Hang Seng Electronics (600570): Deepening the reform of the New Third Board and continuing to promote the positive impact of the discovery on the business of Hang Seng

Hang Seng Electronics (600570): Deepening the reform of the New Third Board and continuing to promote the positive impact of the discovery on the business of Hang Seng

Recent situation of the company The National Equity Transfer Company revised relevant documents on the New Third Board, such as the “Guidelines for the Determination and Change of Stock Trading Methods of the National SME Share Transfer System” on February 21.

The purpose of this reform is to switch from offline to online in order to meet the public issuance of listed companies, supporting the planned continuous bidding system for selected stocks and supporting business processing models.

Comments on the implementation of the new third board reform will drive the demand for the replacement of the brokerage system.

(1) On November 08, 2019, the basic documents of the New Third Board Reform, “Measures for the Supervision and Management of Non-listed Public Companies” (Revised Draft) and “Measures for the Management of Information Disclosure of Non-listed Public Companies (Draft for Solicitation of Comments)” were open for comments.The reform of the third board mainly includes optimizing the financing issuance system, establishing a selection layer, and establishing a transfer board mechanism.

(2) The adjustment of the deviation range in the trading system, including: continuous bidding in the selection layer, the basic layer, and the innovation layer significantly increased the combined bidding matching frequency, and the minimum number of investors to replace 100 shares.

(3) In the continuous bidding system at the selection level, the business changes in terms of trading time, limit of increase and decrease, and market price declaration.

(4) According to the three-round system test of the national stock transfer system, the brokerage, market making, self-employment, and asset management 南京夜生活网 systems of the securities company, fund companies and corresponding custodian banks are involved.

Hang Seng has launched a national stock transfer system transformation solution to fully cover the needs of the new third board reform.

(1) Hang Seng Electronics has introduced various business systems covering investment banking, wealth, brokerage, asset management, institutions, markets, risk control, etc., and issues related to the national stock transfer system issuance, listing, information disclosure, trading, transfer and other related reform requirementsProvide integrated solutions.

(2) The system has appropriate authority (expanded into a category?
Four types of investors), listed company subdivision (new selection layer), collective bidding (minimum declared quantity and other amendments), block transactions (indicating time changes), changes in price limits and other aspects have been systematically reformed.

(3) Hang Seng won the bid for the new third board system in 2013, and has a deep advantage in the new third board related business. We expect to increase the importance of financial institutions to the new third board, and the system (especially the replacement system) demand for transformation is expected to bring some companyMass orders and revenue.

It is suggested that we will raise the company’s revenue in 2020 by + 2% to 47 due to the continuous implementation of the new third board reform.

900 million yuan (+23 a year).

4%) with profit + 6% to 10.

810,000 yuan (ten years +31.


Net profit forecast for 2021 14.

23 ppm, +31 a year.

At 7%, the current market surplus of 2020 / 2021E is 76x / 58x.

Taking into account the current market risk expectations upward gap, we have raised the target price by 28% to 122 yuan according to the SOTP model (the traditional business evaluation price-earnings ratio is consistent with the historical average price-earnings ratio), corresponding to a target market value of 97.7 billion yuan, corresponding to 2020/2021 market surplusReduction of 90x / 69x, compared with the current temporary upside of 19%.

Risk financial innovation policies fell short of expectations; systematic estimation errors.