Summary of events: on December 2, 2022, the company issued a 2022 restricted stock incentive plan (draft). The number of restricted shares to be granted is 11.6656 million shares, accounting for about 2.00% of the company's total share capital at the time of the announcement of the draft incentive plan. 9.7239 million shares are granted for the first time and 1.9417 million shares are reserved; the number of people to be granted for the first time is 597, and the price is 10.48 yuan per share for the first time.
Performance assessment at the company level requires a balance between profitability and R & D investment innovation.
The company selects the growth rate of deducted non-net profit, earnings per share and R & D investment as the performance evaluation index at the company level. the details are as follows: 1) based on 21-year deducted non-net profit, the growth rate of 23-year deducted non-net profit is not less than 25.45%, the average growth rate of 23-24-year deducted non-net profit is not less than 33.00%, and the average growth rate of 23-25 deducted non-net profit is not less than 41.10%. 2) the earnings per share in 23-25 are not less than 1.05 yuan, 1.17 yuan and 1.31 yuan, and the growth rate of non-net profit and earnings per share are not lower than the 75 percentiles of the target enterprises (22 comparable companies such as ZTE Ziguang) or the average level of the same industry. 3) based on the amount of R & D investment in 21 years, the growth rate of R & D investment in 23 years is not less than 32.25%, the average growth rate of R & D investment in 23-24 years is not less than 42.15%, and the average growth rate of R & D investment in 23-25 years is not less than 53.10%.
The incentive object covers a comprehensive range, which is conducive to the formation of a joint force in management.
The number of incentive targets to be granted for the first time under this plan is 597, including directors & senior managers (4, total 301000 shares), middle managers, technical and business backbone personnel (593, total 9.4229 million shares), and 1.9417 million shares are reserved. the incentive target shall be determined within 12 months after the plan is examined and approved by the shareholders' general meeting.
Ruijie is the first to encourage after the split, which is expected to create another Ruijie.
We believe that the spin-off and listing of Ruijie Network has solved its own incentive problem, but its market capitalization after listing is more than 20 billion. As the controlling shareholder of Ruijie Network holding 44.88%, the market capitalization of Ruijie Network is only about 12 billion. It reflects that the market values the company's other high-quality assets, such as ShengTeng Information, Star Network Wisdom, Star Network Video, etc., besides Ruijie Network, at a valuation of about 3 billion yuan (12-90 billion yuan). The core reason is that the market believes that Ruijie Network is one of the company's core businesses, and the growth momentum of Ruijie Network is insufficient after the divestiture. The incentive at the parent company level reflects the company's confidence in the follow-up business development to a certain extent. In the future, the company will concentrate resources on the development of other subsidiaries such as Shengteng Information, which is expected to create a Ruijie.
Investment advice: this incentive is the first incentive since the listing of the company, and has a comprehensive coverage, which is conducive to the full release of growth momentum. It is estimated that the return net profit of the company in 22-24 years is 737 million yuan / 985 million yuan / 1.239 billion yuan respectively, corresponding to the PE multiple of 17amp 12amp 10x, and the valuation of the company in the past 5 years is 26 times.
Maintain the recommended rating.
Risk hint: the demand of Internet manufacturers in the field of digital communication is lower than expected; the market competition intensifies.