This report is read as follows:
The company announced the accompanying payment option incentive plan, which granted the accompanying payment executives the option to subscribe for 12% of the accompanying payment (after share expansion). If the full exercise price is 341 million yuan, the proportion of the accompanying payment management's shareholding will be increased to 29.56%. The incentive plan is bound to the core backbone interests, which will enhance the long-term development motivation of accompanying payment in the future.
Summary:
Maintain the "overweight" rating and maintain the target price of HK $2.10. We estimate that the company's net profit for 2017 and 2018 will be HK $387 million and HK $463 million, respectively, and that of EPS will be HK $0.14 and HK $0.17, respectively. Give 15 times PE, corresponding to the 2017 target price of HK $2.10.
The accompanying payment option incentive announced that the management can buy 12% of the accompanying payment shares with 341 million yuan.
The group announced that it will implement an option incentive plan for three senior executives, including the chairman of the subsidiary, Shen Zheng. According to the details of the terms and conditions, the management can subscribe for 12% of the shares (after share expansion) at a price of RMB12.51 per registered share capital in the next 3 years, with an option lock-up period of 2 years. The plan requires executives not to leave within one year after exercising their power, and to accept five-year competition restrictions. If all the rights are exercised, the shareholding of the accompanying management will rise from 19.95% to 29.56%, and all the funds will be used as accompanying working capital, which will not affect the group's profits and losses.
Binding with the core backbone interests, option incentives will enhance the internal driving force of long-term development. Option incentives closely bind corporate performance to the interests of senior executives, effectively enhance the enthusiasm of accompanying executives to work, and set strict competition restrictions to significantly reduce the long-term business risk in the future.
The accompanying payment gene is excellent, the performance is growing rapidly, and the business performance has been recognized by the group and the market.
We believe that the option incentive plan is timely and appropriate, which will add sufficient impetus to the long-term development of the company while further tapping the internal value of the company, which demonstrates Gaoyang Group's strong confidence in the future development of the accompanying payment.
Seize the new opportunities for merchants to upgrade their value, and be optimistic about the continuous release of 18 years' performance. At present, the business of paying and receiving orders along with the company is sophisticated, with more than 2.4 million active merchants and an explosive growth in transaction flow. Its business model of "payment + value-added services" has been verified by the market, which can not only effectively enhance the value of a single merchant, but also improve the stickiness of merchants. The company is working hard to build a financial ecological chain, expand the synergy of various business areas of the group, and build a new scene financial model by linking merchants, banks and consumers. In the future, "comprehensive linkage online and offline" will further enhance the company's core competitiveness in the field of financial technology, and we are optimistic about the company's business performance in 2018.
Risk tips: the risk of policy change; the intensification of industry competition.