Hongrun Construction issued the 2022 employee Stock ownership Plan (draft): the maximum amount of funds to be raised in this employee stock ownership plan is 250 million yuan, and the total number is expected to be no more than 35 people. On behalf of the employee stock ownership plan, the company has signed a "share transfer agreement" with effective conditions, stipulating that Hongrun Holdings will transfer 55.1876 million shares of the company to the employee stock ownership plan, accounting for 5.01% of the total share capital of the company. the transfer price is 90% of the company's stock closing price on the previous trading day before the date of signing of the share transfer Agreement (March 3, 2022), that is, 4.53 yuan per share.
The introduction of employee stock ownership plan, binding the interests of the company and core employees at all levels, is conducive to the sustainable development of the company. Through this employee stock ownership plan, on the one hand, establish and improve the benefit sharing mechanism between workers and owners to promote the long-term, sustained, stable and healthy development of the company; on the other hand, attract and retain excellent business backbones, improve the company's long-term and effective incentive and restraint mechanism, fully mobilize the enthusiasm of employees, improve employee cohesion, stimulate the development vitality of the company, and improve the competitiveness of the company.
To provide the employees of the stock ownership plan with a minimum amount of principal and an annualized 10% income guarantee, demonstrating their confidence in development. The company's controlling shareholder, Hongrun Holdings, provides employees participating in the employee stock ownership plan with a minimum principal and an annualized 10% (simple interest) income guarantee. The controlling shareholder of the company provides a bottom guarantee for the principal of all shares of the employee stock ownership plan, which reflects the strong confidence of major shareholders and management in the long-term development of the company.
"Infrastructure + BIPV+ employee stock ownership plan" multi-wheel drive, performance and valuation is expected to usher in a double-click. The main business infrastructure projects are expected to benefit from the "steady growth" of infrastructure in 2022. Through the signing of a strategic cooperation agreement with Shanshan shares, the company is expected to quickly cut into the photovoltaic building integration track, and the development of BIPV business is expected to further thicken the company's performance and raise the valuation level. Launch the employee stock ownership plan at the critical point and bind the core employees at all levels, which is conducive to the long-term development of the company.
Profit forecast and valuation: we expect the company's EPS to be 0.41,0.51,0.60 yuan from 2021 to 2023, and the closing price on March 31 will be 12.7x, 10.3x and 8.6x, respectively, maintaining the "prudent overweight" rating.
Risk hints: macroeconomic downside risks, early termination of employee stock ownership plans, lower-than-expected investment in infrastructure and municipal rail transit, deteriorating cash flow, and lower-than-expected risks in new business development.