Events:
On September 27th, the company issued a 2023 restricted stock incentive plan to grant 10.16 million restricted shares, or about 2 per cent of the company's total share capital. Among them, the total number of restricted shares granted for the first time is 8.128 million shares, accounting for about 1.6% of the company's total share capital; 2.032 million shares are reserved, accounting for about 0.4% of the company's total share capital.
Comments:
Deeply bind the core staff and fully benefit the employees at a low grant price. The total number of people to be awarded under this incentive plan is 36, including 8 directors / senior managers and 28 core technical / business backbones. The grant price of restricted shares is 3.09 yuan per share, which is 45.6% off the closing price of 5.68 yuan per share on September 27. The lower grant price helps to attract, motivate and retain key talents for the company, stabilize the core team, realize the deep binding between the interests of employees and the interests of the company, and promote the long-term and sound development of the company.
Performance goals are established to demonstrate business confidence. The restricted stock assessment year awarded for the first time under this incentive scheme is for the three fiscal years 2023-2025. To achieve 100 per cent attribution, the growth rates of revenue and net profit in 2023-2025 are no less than 20 per cent, 35 per cent, and 50 per cent, respectively, compared with the 2022 results. Assuming that the closing price of the company on the day of the first grant is 6 yuan per share and the grant price is 3.09 yuan per share, the unit incentive cost is 2.91 yuan per share. The total amount of fees paid for restricted stock shares granted for the first time under this incentive plan is 23.6525 million yuan, and the amortization from 2023 to 2025 is 147.83 shock 1675.38 million yuan respectively. If the equity incentive fee is added back, the actual net profit growth rate of the company will be higher. The higher performance target is expected to continue to stimulate the subjective initiative and creativity of the company's core employees, but also demonstrates the company's confidence in achieving performance growth.
The return of major customers has contributed to a high performance increase. Huawei Systems has always been the company's core customer, the company's main business includes the production and operation of electronic tools, instruments, chemical materials and equipment and other supporting sales and after-sales service. In 2021-22, the company's sales to Huawei Systems accounted for 54.18% of the company's total sales. With the return of major customers, the company will fully benefit and is expected to achieve high performance.
Coverage for the first time, giving a "overweight" rating. We are optimistic that the company will continue to achieve performance growth led by major customers. It is estimated that the company's revenue from 2023 to 2025 will be 2.172 billion yuan, 2.48 billion yuan, 0.72 billion yuan, 0.32 billion yuan, 0.41 billion yuan, and 0.63 billion yuan, respectively, and the corresponding EPS will be 0.06 yuan, 0.08 yuan, 0.12 yuan, respectively.
Risk hint: downstream demand is lower than expected, product promotion is not as expected, profit and valuation are not as expected.