Issuance of an equity incentive plan, awarding a wide range of management teams and core cadres:

I really want you to announce the equity incentive plan. It is proposed to grant directors, executives, middle management, and core key employees no more than 1,028,300 restricted shares at 4.03 yuan/share, accounting for 2.26% of the company's total share capital. Of these, 1,5283 million shares were granted to 177 people for the first time, and 500,000 shares were reserved, which will be granted before the 2023 Third Quarterly Report is disclosed.

Motivation goals are relatively conservative, but imparting team morale is more important:

The goals of this equity incentive plan assessment are: 1) 2023 revenue increase 15% year over year, or net profit reversal loss. 2) Revenue in 2024 increased 30% compared to 2022, or net profit of 30 million.

The ratio of individual-level performance appraisal and sales restrictions that can be lifted is as follows: assessment score A+/A/B can be lifted 100%, evaluation score C can be lifted 60%, and evaluation score D cannot be lifted.

Although the goals of the equity incentive assessment are relatively conservative, we believe that if you are in the process of change, you need to give your team morale and motivation even more. Judging from the company's incremental dimension, the channel side is more biased towards e-commerce such as Jikuai, and the product side is more biased towards the Red Group.

The revenue side expands incremental business, and lower costs are expected to free up profit margins:

I really hope you're in an upward development phase right now. The stock red jujube business is expected to benefit from a return to steady upward development in gift demand. Incremental Red Pie, Soy Feifei, Qing Feifei, VC Jujube, etc. are being actively cultivated, and it is expected to cultivate a second growth curve in the future. On the performance side, there was a clear decline in jujube prices in 22Q4, which greatly reduced cost pressure for the full year of '23 and favoured overall performance.

Investment advice:

We expect the company's revenue to reach 1,703, 20.25, and 2,374 billion yuan respectively in 2023-2025, and net profit of 0.17, 44, and 87 million yuan respectively. If equity incentive expenses are not taken into account, the company's net profit will be 0.30, 0.60 million, and 91 million yuan respectively. Optimistic about the marginal improvements brought about by the company's expansion of new categories and channels, the purchase was given an investment rating of -A. The target price for 6 months was 10.42 yuan, which is equivalent to 2.7X PS in 2023.

Risk warning: sharp rise in raw material prices, new product promotion falling short of expectations, channel expansion falling short of expectations, food safety issues.