Main points of investment:
Implement restricted equity incentive plan to stimulate the enthusiasm of the management team. The company announced the equity incentive plan, the proposed number of restricted shares of 1.69 million shares, the grant price of 7.91 yuan per share, the specific incentive target for the company's directors and managers of 4, the core backbone personnel (excluding independent directors, supervisors) 30 people.
The performance assessment target is based on operating income in 2019, with operating income growth rates of no less than 5 per cent, 15 per cent and 30 per cent respectively from 2020 to 2022. The company estimates that the annual amortization expenses from 2020 to 2023 are 248.76 yuan, 618.34 yuan, 298.51 yuan and 1.1372 million yuan respectively. We believe that the incentive plan will help to stimulate the enthusiasm of the management team and improve operational efficiency.
Liaoning first reaches the first phase of the project to temporarily suspend production, the second phase of the project is in the stage of construction. As of December 31, 2019, Liaoning first reached the first phase of 3000 tons of enoxone, 2000 tons of enoylmorpholine, 10000 tons of preparation project has been successfully trial production. Due to the explosion accident of Liaoning Xianda in February, Liaoning Xianda is currently in the stage of stopping production. At the end of 2019, Liaoning Xianda launched the second phase of the project, including 5000 tons of alkenone, 10000 tons of alkali sulfide and 9000 tons of molten salt. At present, the project has entered the construction stage and the main body has been completed. The company expects that the temporary suspension of production in the first phase and the suspension of the construction of the second phase of the project will have an impact on the operating results in 2020 to a certain extent.
The price of enoxone decreased greatly, and the prices of other products remained high. In the first quarter of 2020, the company's revenue was 368 million yuan, up 2.10% from the same period last year, and the net profit was 25 million yuan, down 38.57% from the same period last year. The average selling prices of enoxone series, imidacloxone series, isoxazone series and enoylmorpholine series were 137400 yuan / ton, 2371 thousand yuan / ton, 976 thousand yuan / ton and 1463 million yuan / ton, which were-31.37%, 18.55%, 9.54% and-1.81% respectively compared with the same period last year. The price of enoxone products decreased greatly, which was mainly affected by market competition and the relationship between supply and demand.
The production and sales of the main products are rising steadily. In the first quarter of 2020, the 100% sales of enoxone series, imipramine series, dioxin series and enoylmorpholine series were 1002.48 tons, 384.45 tons, 632.15 tons and 267.30 tons, up 38.93%, 1.55%,-4.86% and 14.30% over the same period last year. As one of the company's main products, the expansion of production capacity aims to expand the advantage of product scale, enhance market competitiveness and increase market share.
Profit forecast. We estimate that the company's net profit from 2020 to 2022 will be 185 million yuan, 240 million yuan and 309 million yuan, respectively, and the corresponding EPS will reach 1.18,1.53 and 1.97 yuan respectively. The company will be given 14-18 times PE in 2020, and the corresponding reasonable value range is 16.52-21.24 yuan (corresponding to PB 1.52-1.96 times, we think the valuation is at a reasonable level), which is better than the market rating.
Risk hint. The price of the product fell; the progress of the project was not as expected.