20150804-银河国际-中国擎天软件-Solid 1H 2015 results. Growth to accelerate in 2H. Maintain BUY.pdfVIP

August 4, 2015 Sinosoft Technology Group [1297.HK] Solid 1H 2015 results. Growth to accelerate in 2H. Maintain BUY TMT Sector -Software Sinosoft Technology Group’s (Sinosoft) reported a set of solid 1H2015 results with 23% growth in net profit. Decline in gross margin in 1H15 was mainly due to: a) booking of de- velopment costs of foreign visitor tax refund system in 1H15, b) increasing hardware sales BUY in government related projects and c) investment in new products development. Manage- ment highlighted that drop in gross margin was temporary and it would recover in 2H15. Both top and bottom line growth is expected to accelerate in 2H15 due to geographical Close: HK$4.01 (Aug 03, 2015) expansion and contribution from new business opportunities. Despite increasing macro uncertainties, Sinosoft should deliver solid earnings growth of 29.3%/29.9%/25.4% in Target Price: HK$6.27 (+56.3%) 2015E/2016E/2017E . We maintain the view that Sinosoft is a beneficiary of government’s policy of reducing carbon emission and continuous investment in IT. We believe the current valuation of 19.0x 2015E still looks attractive. Potential co-operation with Alibaba/Ant Fi- Share Price Performance nancial and other financial institutions should offer upside potential. Maintain BUY with a (HK$) (HK$ million) new target price of HK$6.27 (based on 30x 2015E PER and cut in target price is mainly