Core ideas:
1. Event
The company issued the 2017 restricted Stock incentive Plan, which intends to grant 10.7 million restricted shares to 138 people in two phases at a price of 4.79 yuan per share.
two。 Our analysis and judgment
(1) the release of the employee incentive plan, the promotion of cohesion to help the growth of the company, the company plans to grant 10.7 million restricted shares in two phases at a price of 4.79 yuan per share. Performance evaluation indicators: based on 2016 revenue, the revenue growth rate from 2017 to 2019 is not less than 40%, 80% and 120% respectively, with an average annual compound growth rate of about 30%. The total amortization expense for this equity incentive is about 16.5675 million, of which about 4.9948 million in 2017 and 7.4225 million in 2018. We believe that the introduction of employee incentive programs will effectively enhance the cohesion of the core backbone of the company and help the company develop steadily and rapidly.
The plan puts forward a clear target for revenue growth, and with Shikai Technology merging for 16 years, we believe that the company's development will usher in an inflection point and growth is expected to enter the fast track.
(2) continuous efforts by extension to protect the transformation of the company
Up to now, the company has successfully acquired 53.21% equity of Fuhua Yuqi and 100% equity of Shikai Science and Technology through denotation, and has added new channel communications and military information business. Fuhua Yuqi performance commitment has expired, Shikai Science and Technology promised to deduct non-net profit of not less than 7300 million yuan and 86 million yuan in 2017 and 2018. In 2016, both companies exceeded their performance commitments. Looking forward to 2017, we believe that Shikai Science and Technology has been deeply engaged in the field of precision optics and missile guidance for many years, multi-model products have been formally listed and equipped in batches, and many types of guidance systems actually in production belong to exclusive production. A stable military procurement system ensures the smooth realization of performance. In addition, the total investment in informatization in the railway industry exceeded 30 billion yuan in 2015. with the rapid expansion of investment in railway fixed assets, the investment in railway informatization will maintain a compound growth rate of about 8% and 10% in the next 10-15 years. Fuhua Yuqi, as a forerunner in the railway communications market, is expected to share the rapid growth of the industry.
(3) to seek the development of the company and increase the strength of the M & A fund
The company, together with Luxin Venture Capital and Xi'an Government guidance Fund, jointly set up Xi'an military-civilian Integration Industrial Fund. We believe that in the future, the company will make use of the professional advantages of Luxin Venture Capital, combined with the direction of transformation, through mergers and acquisitions to help the company's military and information business development.
3. Investment suggestion
It is estimated that the return net profit of the company in 2017 and 2018 is 90 million and 130 million respectively, the EPS is 0.14 and 0.20 yuan, and the current stock price is 70x and 49x corresponding to PE. The company's military industry and information transformation is beginning to show its edge, there is more room for development in the future, and the "recommended" rating is maintained.
Risk hint: the risk that the growth of civil products business is not as good as expected