Main points of investment:
Launch an equity incentive plan to deeply bind the development of the company to the interests of employees. Recently, accurate information has launched a restricted stock incentive plan (draft), which intends to issue 10.7 million restricted shares and grant 8.565 million shares for the first time, including senior executives of the company and holding subsidiaries, middle-level and core technical (business) personnel, etc., with a grant price of 4.79 yuan per share and a sales limit of 12 months. The restricted stock granted this time was lifted in three stages, with a lifting rate of 30%, 40% and 30%, respectively. The performance evaluation conditions for lifting the ban are based on the growth rate of operating income from 2017 to 2019: based on 2016 operating income, the growth rate of operating income from 2017 to 2019 is 40%, 80% and 120%, respectively. We believe that this equity incentive plan is conducive to mobilize the enthusiasm of the company's management and core staff, and accelerate the development of the enterprise.
Shikai Science and Technology has a leading advantage in the field of optoelectronic technology development of weapons and equipment. Precision Information entered the military industry through the acquisition of 100% stake in Shikai Technology in 2016. Shikai has complete scientific and technological military industrial qualifications, has long been committed to the research and development of anti-tank missile guidance systems, has many years of R & D and production experience, and has established in-depth cooperative R & D relations with downstream military enterprises and the military. The various types of guidance systems actually produced by Shikai Technology belong to exclusive production and have a stable market position. In the future, on the basis of meeting the domestic assembly demand, it is expected to enter the foreign market. In addition, the original shareholder of Shikai Technology promised to deduct non-return net profit of 73 million yuan and 86 million yuan in 2017 and 2018, respectively.
Fuhua Yuqi subsidiary company seeks development through transformation. In order to cope with the decline of the coal industry, Fuhua Yuqi made use of its accumulated technical advantages in the field of communications to lay out emerging industries such as rail transit informatization and system integration big data to build the first brand of high-speed rail communications and on-board network. At present, Fuhua Yuqi has more than 70% of the WIFI market share of high-speed trains, and has become one of the first suppliers in the field of high-speed rail wireless communications. At the same time, Fuhua Yuqi and Shikai Science and Technology give full play to their respective advantages and join hands to enter the field of national defense informatization, and now both sides have set up military industry departments and participated in defense underground engineering and other projects. we are optimistic about the synergy released by the in-depth cooperation between Fuhua Yuqi and Shikai Science and Technology in the field of national defense informatization in the future.
Profit forecast and investment advice. As this restricted stock incentive plan is still in the draft stage, we will not consider its impact on the company's equity and future performance for the time being. We estimate that the EPS of accurate information from 2017 to 2019 is 0.12 yuan per share, 0.12 yuan per share and 0.13 yuan per share respectively. Considering the development prospects of the company's transformation of military industry and transportation and communications industry, and combined with the valuation of comparable companies, we give accurate information a valuation of 94 times PE in 2017, corresponding to a target price of 11.28 yuan, maintaining a "buy" rating.
Risk hint. The progress of transformation is lower than market expectations; goodwill impairment risk