Event: the company issued an equity incentive plan to grant no more than 7 million shares to 327 people at a price of 32.26 yuan. the unlocking condition is that the net profit belonging to the shareholders of the listed company after deducting non-recurring profits and losses in 2021, 2022 and 2023 is not less than 45%, 60% and 100% compared with the growth rate in 2020. The growth rate of operating income in 2021, 2022 and 2023 is no less than 5%, 15% and 25% compared with 2020.
The introduction of equity incentives is expected to improve the enthusiasm of employees. This equity incentive is the second equity incentive since the company went public. Compared with the equity incentive in 2018, this incentive plan covers a wider range and requires higher performance. At the same time, the award price is higher, reflecting the company's confidence in future development. We believe that equity incentives are expected to mobilize the enthusiasm of employees, further bind the interests of employees and the company, and the development of the company is expected to continue to accelerate.
CDMO strategic cooperation landed, opening a new chapter in the development of the company. Xuancheng Minohua (Xuanmei) is the company's main CDMO production base, with an income of more than 100 million yuan in the first half of the year, almost reaching the level of 2020, and the net interest rate in the first half is about 4%, which is about 4% higher than the same period last year. The company is actively opening up customers and constantly replenishing CDMO orders. The production capacity of Xuanmei base is expected to continue to increase, and the net interest rate has much room for improvement. In 2021, the company signed a ten-year strategic partnership with Merck & Co Inc and decided to establish a long-term and stable partnership in the fields of pet medicine, veterinary medicine and animal health. It marks Merck & Co Inc's full recognition of the company's research and development technology, production and quality in the field of API. Merck & Co Inc's animal health business earned about $4.7 billion in 2020, with a compound growth rate of about 7 per cent (including exchange rate effects) from 2015 to 2020. With the gradual deepening of the strategic partnership between the two sides, the proportion of revenue from the company's CDMO business segment is expected to increase to 3050% within 3-5 years, opening a new chapter in development.
The research and development of new products has been accelerated and laid the foundation for long-term development. At present, a total of 8 strategic joint development preparation products are under CDE review in China, and another 17 preparation varieties are under development. Another 3-4 projects will complete BE trials, and 3-4 varieties will be submitted for domestic registration and review. Apishaban tablets and isoniazid tablets are expected to be approved for consistency evaluation before 2022. The company continues to strengthen its R & D capacity and lay a foundation for long-term development.
Profit forecast and rating: the net profit from 2021 to 2023 is expected to be 240 million yuan, 320 million yuan and 440 million yuan respectively, and the corresponding pre-valuation is 20 times, 15 times and 11 times respectively, maintaining the "hold" rating.
Risk tips: 1) the risk of price fluctuation of raw materials; 2) the risk that the landing speed of strategic cooperation projects is not as fast as expected; 3) the progress of solid preparation construction projects is not as expected.