Incident: On February 20, 2024, the company released the 2024 equity incentive draft and repurchase plan: 1) Equity incentive plan: The company issued a draft restricted stock incentive plan to grant 7.344 million shares to incentive recipients; 2) Repurchase plan: The company issued an announcement to use its own capital of 8078.40-161.568 million yuan to repurchase shares to implement the equity incentive plan.
The 2024 equity incentives were announced, demonstrating confidence in development. For the first time, the incentive program granted incentives to a total of 147 people, including directors, senior management, middle management and core technical (business) executives working for the company, its subsidiaries, and other employees who have a direct impact on the company's business performance and sustainable development. The equity incentive assessment target set by the company is that the 2024-2027 revenue reached 21.00/25.20/30.24/36.40 billion yuan, fully demonstrating the company's confidence in long-term development.
Publish share repurchase plans and improve the company's long-term incentive mechanism. The share repurchase is planned to use its own capital of 8078.40-161.568 million yuan to repurchase 367.344 million shares (estimated at an upper limit of 22 yuan/share), accounting for 2.25% to 4.50% of the company's total share capital on February 8, 2024. The repurchase will be used to implement the equity incentive plan, which is conducive to improving the company's long-term incentive mechanism, attracting and retaining outstanding talents, fully mobilizing the enthusiasm of the core team, promoting the company's sustainable development, and enhancing the company's core competitiveness.
Profit forecast: We expect the company's main business revenue for 2023-25 to be 1,350 yuan, 1,800 yuan, and 2.58 billion yuan, respectively, and net profit to mother of 1.74, 2.93, and 280 million yuan, respectively. Based on comparable **** company valuations, 2024 is expected to generate an investment income of about 70 million yuan (2.2% exit of ITH's equity). In addition, the company acquired 60% of Hongtong's shares in 2023, holding a total of 70% of the shares. It is expected to be consolidated in 24Q1. Hongtong expects revenue of 1.10 billion yuan and 1.80 billion yuan for 24-25, and net profit of 0.22 billion yuan and 072 million yuan respectively, which will contribute 0.15 billion yuan and 50 billion yuan to the company's net profit. Therefore, in 2024-25, we expect the company's revenue to be 2,900 million yuan and 3,958 billion yuan, respectively, and net profit to mother of 3.08 billion yuan and 330 million yuan respectively, maintaining the “buy” rating.
Risk warning: Downstream demand recovery falls short of expectations; risk of new business expansion falling short of expectations; risk of release of new production capacity falling short of expected risk; risk of price fluctuations of major raw materials.