Issuing Stock options and restricted Stock incentive Plan

This incentive plan consists of two parts: stock options and restricted stock, with a total of 7.34599 million equity shares, accounting for about 1.54% of the total share capital.

(1) 1.39 million stock options are granted, accounting for about 0.29% of the total share capital; each stock option has the right to purchase 1 share company's RMB A common shares at the exercise price when the effective conditions are met; the underlying stock is derived from A shares repurchased by the company from the secondary market.

(2) restricted shares are granted 5.95599 million shares, accounting for about 1.25% of the total share capital; the underlying stock is the A-share common shares repurchased by the company from the secondary market.

The exercise price of stock options granted under this incentive scheme is 12.32 yuan per share, and the grant price of restricted shares granted is 7.70 yuan per share (the company's closing price on September 28 is 15.5 yuan per share).

The exercise of stock options shall be divided into two phases 12 months after the expiration of the authorization date, with the proportion of 50% and 50% respectively; the restricted shares will be lifted in two phases 12 months after the expiration of the grant date, and the proportion of lifting restrictions in each period shall be 50% and 50% respectively.

The incentive plan involves a total of 151 people, accounting for 7.60% of the company's total employees, including company directors, senior managers and core technical / business personnel.

The goal of this performance appraisal is: during the first exercise period, the company needs to meet one of the following two conditions: 1, based on the company's revenue in 2022, the revenue growth rate in 2023 is not less than 10%, and the net profit growth rate in 2023 is not less than 20%. In the second exercise period, the company needs to meet one of the following two conditions: 1, based on the company's revenue in 2022, the growth rate of cumulative revenue in 2023-2024 is not less than 125%; 2, based on the company's net profit in 2022, the growth rate of cumulative net profit in 2023-2024 is not less than 155%.

This release of the incentive plan will help to improve the corporate governance structure, establish and improve the company's long-term incentive and restraint mechanism, attract and retain the company's core management, technical and business personnel, and fully mobilize their enthusiasm and creativity. effectively enhance the cohesion of core teams and the core competitiveness of enterprises.

Maintain a profit forecast and give a "buy" rating

Since its inception, the company has established "DAZZLE", "DIAMONDDAZZLE", "d'zzit" and "RAZZLE" four well-known clothing brands around the positioning of middle and high-end brands, forming a deep interpretation of the fashion field. The company has established a good brand image in China's fashion industry through strong design and development, rich product mix, agile supply chain management, strategic marketing network layout, accurate brand positioning and omni-directional brand promotion. We estimate that the 23-25 year return net profit of the company is 5.92,7.04 and 794 million yuan, EPS is 1.24,1.47,1.66 yuan per share, PE is 13,11,9x respectively.

Risk tips: increasingly fierce market competition; design R & D capabilities can not grasp and create fashion trends; business performance is affected by seasonal fluctuations and abnormal climate and other risks.