The blockchain boom is coming, pay attention to financial IT related targets

Blockchain technology has recently received a lot of attention from the capital market. According to a research report by a securities firm, blockchain technology is of great significance to information security and digital currency, and is expected to become one of the biggest outlets in 2016. In the next 2-3 years, blockchain technology will be implemented in the financial field, and we will focus on the application and layout of financial technology companies in the blockchain field.

Guotai Junan: Blockchain is expected to become one of the biggest trends in 2016

Blockchain technology is booming and will become one of the biggest outlets in 2016. Blockchain technology has recently received a lot of attention from the capital market. We believe that blockchain technology is of great significance to information security and digital currency, and is expected to become one of the biggest outlets in 2016. For details, please see our in-depth report "Giants Leading Change, Blockchain Has a Great Achievement".

Blockchain technology can save money and make money. Some people in the market believe that blockchain technology, as a low-cost data security storage technology, can only be used to reduce the cost of the transaction system, but cannot increase value and has little profit margin. We believe that the credit expansion ability of blockchain can bring additional value to individuals and enterprises (such as obtaining higher credit limits and the right to engage in business activities in a wider range of fields). Therefore, it is not only about saving money, but also has a good money-making effect, thus bringing significant benefits to practitioners of blockchain technology.

A-share listed companies are expected to make layout in blockchain, and Haili Meida ( 002537 ) is recommended. We believe that A-share listed companies are expected to make layout in this field in 2016. Customers/users have the most say in the blockchain value chain. Haili Meida, which has outstanding customer advantages, is recommended. Beneficiary targets include Hengsheng Electronics ( 600570 ), Feitian Chengxin ( 300386 ), and Yingshisheng ( 300377 ). ( Song Jiaji and Wang Sheng of Guotai Junan )

Guotai Junan: The wind is coming, and "blockchain +" experimental applications continue to emerge

Hot Spot Tracking: With the arrival of the trend, experimental applications of "blockchain +" continue to emerge. Blockchain has been experimentally applied in crowdfunding, equity liquidation, cross-border payment, confidential document storage, notarization and other application fields, and leading companies such as Ant Crowdfunding and Factom have received attention.

We have compiled the basic information of leading domestic companies engaged in blockchain application research, including Wanxiang, VeChain, Ant Crowdfunding, Factom, Jingtong, Bubi Blockchain, Sunshine Insurance, Feitian Chengxin, and China UnionPay ( 002152 ), for reference by investors. (Song Jiaji and Wang Sheng from Guotai Junan)

Guotai Junan: Wanxiang Blockchain Cloud Platform released to accelerate blockchain innovation

Hot Spot Tracking: Wanxiang launches blockchain cloud platform and incubator to accelerate the pace of domestic blockchain innovation. In our earlier in-depth report, we pointed out that blockchain technology is expected to revolutionize the existing data storage and credit organization methods, and is one of the biggest outlets in the capital market in 2016. The difficulties currently faced by the domestic blockchain industry include the lack of underlying technical support and the shortage of relevant talents. Wanxiang Blockchain Laboratory recently launched a blockchain cloud platform to provide basic technical support for developers, and coordinated a series of measures such as technical training and entrepreneurship incubation. The pace of domestic blockchain innovation and entrepreneurship is expected to accelerate. The beneficiaries are Haili Meida, Feitian Chengxin, Hengsheng Electronics, and Yingshisheng. (Guotai Junan Song Jiaji, Wang Sheng)

China Merchants Securities: In-depth special topic on blockchain - Let the whole world be your witness

We use the most vivid cases to explain what blockchain is. We believe that blockchain combined with application scenarios is expected to change the existing centralized IT network data management model and create huge economic benefits. We boldly speculate on the possible model of my country's central bank digital currency using blockchain. Foreign giants have quickly laid out their plans, and the domestic market is on the eve of an explosion.

Blockchain: An imperfect perfect mechanism. Bitcoin, which is known as the most perfect digital currency, is one of the most successful applications of blockchain and is the hero behind Bitcoin's "unforgeable and unstealable" characteristics.

Academically speaking, blockchain is a public accounting mechanism (technical solution) that stores data in a distributed manner and is jointly maintained and managed by the entire network to achieve autonomy. It has the characteristics of decentralization, trustlessness, scalability, anonymity, security and reliability. However, it is not perfect at the same time. Before the large-scale promotion and application of blockchain, there are still defects such as 51% attacks, work efficiency, resource consumption, inter-block games and conflicts.

Brainstorming, application and scenario are king: We believe that the decentralization of blockchain may subvert the existing Internet model, and combined with application scenarios, it is expected to generate huge economic benefits. Talking about the future, blockchain can contribute to many fields, such as: digital currency, payment and clearing, digital bills, equity proof, credit investigation, government services, medical care, etc. We boldly speculate that blockchain may have an upgrade and transformation for all walks of life, and at the same time have the possibility of achieving the ultimate effect of a decentralized autonomous society.

Pay attention to the central bank's digital currency, perhaps spring is not far away: Zhou Xiaochuan, the governor of the central bank, once said that the central bank's digital currency may adopt the blockchain model to completely change the traditional currency circulation model. Although the final form of the central bank's digital currency is still uncertain, we guess that there are two major possibilities: 1) Abandon the traditional binary system of "central bank-commercial bank institutions", and the role of commercial bank institutions no longer exists. 2) The central bank and commercial banks form blockchain 1, and commercial banks and social individuals form blockchain 2. The connection between the two blockchains increases flexibility. When necessary, the central bank can start the connection and directly apply supervision and regulation to social individuals. By issuing digital currency, the central bank will reduce the costs of issuing, circulating, and damaging traditional paper currency, reduce illegal and criminal activities, and better regulate the supply and liquidity of currency.

International attention is extremely high: Many large international banks have already launched a series of explorations into blockchain, including setting up internal blockchain laboratories, investing in financial technology start-ups, or cooperating with start-ups.

We have cited several representative cases: 1) JP Morgan Chase, Goldman Sachs and other 42 top international banks formed the world's largest blockchain alliance R3, committed to building an open source, universal shared ledger blockchain alliance; 2) The payment network Ripple can effectively reduce the cost of cross-border currency payments, and may threaten the position of SWIFT in the future; 3) Nasdaq officially launched the blockchain platform NasdaqLinq in October 2015. Issuers who issue shares through Nasdaq Linq will enjoy "digital" ownership. 4) The Hyperledger project is jointly developed by the Linux Foundation and more than 40 financial, technology and blockchain technology teams around the world, dedicated to accelerating the promotion of open source blockchain projects for distributed ledger technology.

We suggest paying attention to IT manufacturers with blockchain technology and applications. We believe that blockchain is more like a mechanism or technical solution. In the future, manufacturers that can combine this mechanism with different scenarios for promotion and application are expected to achieve disruptive success. We suggest paying attention to: 1) Financial IT related targets: Hengsheng Electronics, Wintime, Haili Meida, Xinyada ( 600571 ), Jinzheng Shares ( 600446 ), and GD Yuntong; 2) Encryption and decryption related targets: Weishitong and Feitian Chengxin. ( Liu Zejing, China Merchants Securities ( 600999 ))

China Merchants Securities: A brief analysis of "blockchain" - subverting tradition and transcending currency

Some people say that blockchain will be the end of Internet finance, which is still unknown, but blockchain is indeed a new underlying technical architecture of Internet finance. We may be facing the dawn of a revolution, and this revolution will begin with this new marginal Internet economy, one that does not rely on the issuance and support of central authorities, but is based on automatic consensus protocols among network users. The application advantages of blockchain technology are not limited to the economic field. It has benefits in fields including politics, law, public welfare, social, science, etc. It is a disruptive and innovative technology with the potential to reshape all aspects of society and the way it operates.

The new underlying technology architecture of Internet finance - blockchain. Blockchain is a public ledger of all transactions that have occurred and is recorded by the entire network. The core innovation of this technology is that it is a trustless proof mechanism for all transactions on the network. Blockchain technology allows all users around the world to conduct various forms of transactions in a decentralized and decentralized manner. The application of Bitcoin is a decentralized digital currency that establishes a credit token system through a network-wide accounting system called blockchain;

We may be facing the dawn of a revolution, and blockchain technology may be the fifth disruptive new computing paradigm. Since its release in 2009, Bitcoin has spawned a large number of imitators based on the same model but with different optimizations. Blockchain technology can realize an economic model that is not only about the flow of money, but also about the transfer of information and the effective allocation of resources. Blockchain may be the fifth disruptive new computing paradigm after mainframes, personal computers, the Internet, and mobile social networking; through the open and fair characteristics of blockchain, a variety of related business models can be completed. Blockchain technology may not only reshape various currency markets, payment systems, financial services, and all aspects of economic forms, but also provide similar changes to other industries. Blockchain technology can fundamentally become a new paradigm that reduces friction and improves efficiency in organizational activities. The technology is a complete solution that integrates multiple advantages, both internal and external, qualitative and quantitative.

The blockchain industry is still in its early stages of development, and there are various internal and external constraints that make it limited. No matter what new technology it is, there will always be various technical challenges in the early stages of development. In general, these include throughput, latency, capacity and bandwidth, security, resource waste, and so on.

Many domestic companies have rushed to dabble in blockchain technology, with Wanxiang being the first to bear the brunt. Wanxiang Group's main business is the automotive parts industry. In recent years, it has successively established related projects including the Wanxiang Blockchain Laboratory and Wanyun Blockchain Cloud Platform, focusing on cutting-edge research in blockchain technology, gathering experts in the field to conduct research and discussion on technology development, commercial applications, industrial strategy, etc., to promote blockchain technology to serve the progress and development of social economy. In the future, the impact will definitely extend to the level of related listed companies. Combined with recommendations from industries including electronics and computers, focus on Infront Micro ( 000670 ), Allwinner Technology ( 300458 ), and Wintime. (Dong Ruibin, Yan Fan, and Liu Zejing from China Merchants Securities)

Essence Securities: Blockchain - the poetry and distance of the Internet

What is blockchain? Blockchain is an important concept of Bitcoin, and its initial mission is to support the formation and circulation of Bitcoin. The significance of blockchain is not limited to supporting Bitcoin. The extremely low-cost, decentralized, third-party-free, and collectively collaborative network system created by blockchain technology itself has huge social value.

Blockchain technology is becoming more mature, and solutions are expected to be implemented in 2016. Blockchain technology is popular among financial institutions and capital markets. The reasons for the blockchain enthusiasm include: 1) Blockchain technology is gradually moving from white papers to implementation; 2) The financial industry urgently needs blockchain to reconstruct its underlying system; 3) Leading companies form alliances to create blockchain standards and accelerate technology promotion; 4) Blockchain technology continues to evolve, and its connotation has undergone major changes. In 2016, blockchain technology is expected to see solutions implemented in 2016.

Application scenarios of blockchain. Blockchain 1.0 achieved the transformation of currency and payment system; Blockchain 2.0 achieved the transformation of pan-finance; the vision of Blockchain 3.0 will be to change everything, and achieve the reconstruction and subversion of the decentralized system by establishing decentralized autonomous organizations (DCOs).

Analysis of blockchain industry chain. 1) Industry chain: In the early stage of blockchain development, applications and basic platforms were tightly coupled. The basic protocol of blockchain and the virtual currency (Bitcoin) set were designed to achieve a single payment function. With the rise of a new generation of blockchain platforms led by Ethereum, applications and basic platforms began to decouple. On the more complete blockchain basic protocol developed by Ethereum, developers can develop a variety of decentralized applications (DAPS), and the entire blockchain industry chain began to gradually derive different ecological levels. Participants in the industry chain can be divided into four levels: application layer, middle layer service, infrastructure and platform, and auxiliary platform; 2) Business model: Decentralization does not mean that there is no business model. At least from a technical point of view, developers of decentralized applications can still make profits by charging transaction fees like traditional centralized platforms. For developers of the underlying infrastructure, the main source of profit is to realize asset appreciation by holding the currency initially issued by the blockchain platform.

Investment advice: From the demand perspective, there is real market demand for blockchain technology. From the industry perspective, the blockchain industry will gradually move from concept to implementation in 2016. The application scope of blockchain is not limited to finance, and its centralized economic paradigm represents a new evolutionary direction for the entire Internet industry.

A-share financial IT companies will become important participants in blockchain + finance with their deep understanding of financial business. Highly recommended companies include Haili Meida, Yingshisheng, and Hengsheng Electronics. It is recommended to pay attention to Shiji Information ( 002153 ), Gaowei Technology ( 300465 ), Jinzheng Shares, Feitian Chengxin, Guangbo Shares ( 002103 ), etc.

Risk warning: Blockchain technology development is not as good as expected. (Hu Youwen, Essence Securities)

Shenwan Hongyuan: Detailed explanation of blockchain - disruptive innovation technology

Blockchain technology has begun to gain greater industrial application space independently of Bitcoin. Blockchain is essentially a decentralized distributed ledger database. As the underlying technology of Bitcoin, it initially coexists with Bitcoin. Bitcoin blockchain has the advantages of decentralized distribution, no central trust in the system, immutability and encryption security. As the capacity of Bitcoin blockchain expands, shortcomings such as rising transaction fees, strong price volatility, capacity limitations, and longer confirmation time begin to emerge. However, various innovative deployments of blockchain such as private chains and alliance chains have achieved flexibility in the degree of information disclosure and central control, making it possible for institutions such as banks, auditing firms, and governments to apply it. At the same time, the emergence and rise of competitive open-source blockchains such as Ethereum, combined with smart contract technology, has made it possible to execute smart asset exchanges based on the underlying blockchain protocol, opening up many possible application spaces such as securities, voting, crowdfunding agreements, financial derivatives, company management applications, and auditing.

The blockchain itself is a new credit mechanism based on underlying decentralization, which is in line with economic principles and has a promising future. Compared with the trust-based operating mechanism endorsed by central institutions, the emergence of blockchain represents the birth of a low-cost credit mechanism, which is slowly growing. Its design mechanism ensures that the longer the blockchain runs, the more difficult it is to tamper with. From this perspective, blockchain will inevitably receive continuous attention and promotion.

Pay attention to the development of smart asset applications based on blockchain technology such as Ethereum and Antminer, as well as the dynamics of data storage and professional trading software companies in A-shares. If the credit cost in certain fields is high or there is a lack of trust, there are a lot of opportunities in blockchain. Such opportunities include cross-border payments, equity issuance, securities trading, notarization, etc. Combined with the implantation effect of smart contracts, blockchain also has a lot of opportunities in the Internet of Things and network security. Overseas industrial development and investment trends have crossed the traditional payment field and entered the fields of private equity issuance, securities trading in exchanges, and the Internet of Things. At the same time, the business development model has gradually become diversified and mature. Among them, the blockchain 2.0 represents whether Ethereum can develop a token standard that is compatible and communicated between smart contracts in different types of fields. If it is successfully established, various interconnected spaces of the blockchain will be opened. The domestic early investment development field is biased towards hardware mining, and it is now beginning to show the trend of industrial development in developed countries, but it still lacks support from large institutions. The investment and development direction of Wanxiang Group's industrial fund is worth paying attention to. The entrepreneurial project Antminer is also worth paying attention to. Antminer's slogan is to be the Uber of the securities market. At present, a large amount of funds in the securities market are concentrated in the primary market. The threshold of the secondary market is high and there is government rent. The solution provided by Ant can lower the threshold and issue digital assets using its product technology. If the exchange is willing to circulate, the transaction of its issued digital assets can be operated. It is recommended to pay close attention to the dynamics in the industry. At the same time, for A-share companies, it is recommended to pay attention to the development of related data storage and professional trading software companies. ( Shenwan Hongyuan ( 000166 ) Xie Weiyu)

Shenwan Hongyuan: Big data walks upright - blockchain and artificial intelligence

Recommended targets: A) Profit driven: Tongyou Technology ( 300302 )/ Aerospace Information ( 600271 ) (suspended)/ Inspur Information ( 000977 )/ Hiland ( 300065 )/ Jiuqi Software ( 002279 )/ Venustech ( 002439 )/Yinshisheng, etc. B) Technology monetization driven: Meiya Pico ( 300188 )/ Green Alliance Technology ( 300369 )/ Sichuan University Zhisheng ( 002253 ), etc. C) Business model evolution driven: Taiji Holdings ( 002368 )/ New Capital ( 300130 )/Newland/ New Beiyang ( 002376 )/China UnionPay/ Inspur Software ( 600756 ), etc. It is better when the PE valuation is low.

The three important driving factors for computer growth investment are manpower, business model and security. Artificial intelligence and blockchain optimize the problems of manpower and security respectively. The important driving factor for growth investment is expected operating profit. Operating profit is determined by the product of production tools and efficiency. 1) The production tool of computers is artificial intelligence, a substitute for people or manpower; 2) The determining factor of efficiency is the business model; 3) When both production tools and efficiency are excellent, security calls for investment, and blockchain is an important development branch of security.

Business model: The profit of benchmark companies in cloud computing and big data may reach 8 billion yuan. 1) The business model of computer A-shares has gone through the stages of service, product, solution, Internet, mobile Internet, and cloud computing and big data, and the profit peak has doubled successively. Typical companies in the first four stages are Teamsun ( 600410 ), UFIDA Network ( 600588 ) (formerly known as UFIDA Software), Aerospace Information, and Eastmoney ( 300059 ), which reached the pre-tax profit peak of 260 million, 600 million, 110 million, and 180 million yuan in 2011, 2013, 2014, and 2015, respectively, doubling successively (some companies have burdens or fluctuations in their balance sheets). 2) According to the law of doubling the peak profit of each business model, benchmark companies in cloud computing and big data should reach 8 billion yuan in profit. 3) The reality is that the median per capita profit in the industry was 62,000 yuan in 2014, which continued to increase but was still relatively low. In the future, the typical situation of cloud computing and big data benchmark companies is 5,000-10,000 employees, with an average profit of 500,000-1 million yuan per person. It is speculated that Ant Financial is close to this situation.

Security: Blockchain technology can solve credit security. It is a technical solution for collectively maintaining a reliable database in a decentralized and trustless manner. The principle is to calculate and record data blocks using cryptography and then link them to each other. It sacrifices environmental protection but maximizes security and decentralization, thus creating a greater demand for the cloud.

Efficiency: Artificial intelligence is the biggest hope. In the positive feedback of "R&D-sales" of computer companies, artificial intelligence can improve R&D and enhance sales. Face recognition, voice recognition, automatic translation, image recognition, and learning painting style are typical applications. Since the Dartmouth Conference in 1955, neural network algorithms, Hoffeld neural networks, and deep learning algorithms have been important technical nodes. Since 2013, deep learning has continued to make breakthroughs in speech, vision, and perception, and algorithms are also being optimized and nested. It is expected that after 5-10 years, its application in A-share computers will make progress.

Recommend high-quality growth, cloud computing and big data are the core. As of March 2016, 75 and 81 of the 152 A-share computer companies announced that they were engaged in big data and cloud business. This is an irreversible TMT trend and one of the best growth in the computer field. Along with the great companies it produces, artificial intelligence and blockchain are inevitable derivatives. (Shenwan Hongyuan Liu Yang/Liu Zhi/Liu Chang/Sun Jiaxu)

Changjiang Securities: The investment logic of blockchain theme in A-shares

Blockchain originated from Bitcoin, but has huge potential

Blockchain originated from Bitcoin and was originally used to record transaction data on the entire Bitcoin network.

We do not discuss blockchain as a vassal of Bitcoin, but rather as an emerging force that can impact the world.

Blockchain has the revolutionary advantages of trustlessness and decentralization

Intuitively, blockchain has three advantages: openness, transparency, collective maintenance, and reliable database. Because of the above three advantages, the blockchain system has spontaneously formed the characteristic of trustlessness. The premise of blockchain transactions does not require mutual trust. The logical relationship of the system guarantees the authenticity and security of transactions, so there is no need for a third party to provide the so-called "credit endorsement", which brings the revolutionary advantage of blockchain - decentralization.

Blockchain solves three major pain points, with a small size and great applications

Blockchain, with its advantages of trustlessness and decentralization, can alleviate the three major pain points of central platform monopoly, credit certification problems, and information asymmetry. Looking ahead, blockchain may go through three major development stages: infancy: a reformer of agency clearing and registration institutions; adulthood: entering the two forbidden areas of the Internet: law and government affairs; and completeness: a grand value network.

Investment opportunities: cross-border payment, second-hand goods trading, venture capital, and the Internet of Things. As a new Internet underlying protocol, blockchain has advantages such as trustlessness and decentralization compared to the current TCP/IP model. When analyzing the investment value of blockchain, an information-based technology, we should pay more attention to areas that can make full use of this new technology to break through the limitations of existing business models. We believe that second-hand goods trading, cross-border payment,