Main points of investment:

The company issues the restricted stock incentive plan (draft): on September 27, 2023, the company issued the 2023 restricted stock incentive plan (draft), which plans to grant 6.8 million restricted shares, accounting for 2.98% of the company's total share capital at the time of the announcement of this incentive plan, of which 6.3 million shares are granted for the first time and 500000 shares are reserved for the first time. The reserved grant price is the same as the first grant price.

The equity incentive plan is launched for the first time to stimulate the vitality of the company and promote the medium-and long-term development. According to the company announcement, a total of 117 people will be awarded this incentive plan for the first time, including directors, senior managers, middle managers and other core personnel who served in the company when the company announced this incentive plan. The restricted stocks granted under this incentive plan shall be restricted for 12 months, 24 months and 36 months respectively from the date of completion of the restricted stock registration, and the deregulation assessment year shall be three fiscal years from 2023 to 2025. The performance evaluation index of each year is operating income, and the three-year target values are 26.4,31.7 and 4.12 billion yuan respectively, and the trigger values are 25.7,30.1 and 3.78 billion yuan respectively. It is estimated that the total amortization cost of the first grant of restricted stock is 76.293 million yuan, and the amortization from 2023 to 2026 is 741.74 yuan, 4068.96 yuan, 1970.90 yuan and 8.477 million yuan respectively. The launch of the equity incentive plan will help to deeply tap the potential of the company, stimulate the vitality of the company in all directions, and make all parties pay attention to the long-term development of the company.

The xylose technical renovation project improves the matching of xylitol raw materials, and the Zhoushan project opens the space for future growth. The matching of raw material xylose largely determines the profitability of xylitol. The company's "annual production of 30,000 tons of D-xylitol green intelligent promotion and transformation project" started construction in May 2022, and has completed infrastructure construction and equipment installation. after the subsequent formal production, the company's competitive advantage of xylitol products will be further strengthened. Considering the long-term development of the company, the company chose the site of Zhejiang Zhoushan International Grain and Oil Industrial Park to plan and build the second production base, laying out the "2 million tons corn intensive processing health food ingredient project". The first phase of the project, "1 million tons of corn intensive processing health food ingredients project", was launched in August 2022 and is currently under construction. The first phase of the project is divided into two stages, the first phase of the construction period of 2 years, mainly liquid syrup and some crystal sugar alcohol products; the second phase of the construction period of 3 years, dietary fiber, modified starch and other new product lines will be put into construction one after another.

Zhoushan project vertically improves the upstream supply chain layout, ensures the supply of starch, the main raw materials, horizontal development continues to enrich the product structure, to meet the diversified needs of customers, will open up the company's long-term growth space.

Investment analysis opinion: maintain the company's 2023-2025 homing net profit forecast of 3.92,5.08 and 632 million yuan (without considering the impact of equity incentives), the current market value corresponds to PE of 15,11,9X respectively, maintaining the "overweight" rating.

Risk tips: 1) a sharp rise in the price of raw materials; 2) sharp fluctuations in product prices; 3) the promotion of new projects is not as expected.