Core views:
Incident: The company announced the “2024 Restricted Stock Incentive Plan (Draft)”, which plans to award no more than 3,533,800 shares to no more than 208 incentive recipients (senior management, core technology/business personnel), accounting for 1.54% of the company's total share capital. Among them, 3.1338 million restricted shares were granted for the first time, accounting for 88.68% of the current incentive plan, and 400,000 restricted shares were reserved, accounting for 11.42% of the plan.
The performance assessment goals of this incentive plan are to achieve total operating income of 1,305, 16.31, and 2,039 billion yuan respectively in 24-26, with year-on-year growth rates of 56.5%, 25%, and 25%, respectively; to achieve net profit without return to mother of 273 million yuan, 328 million yuan, and 393 million yuan, respectively, with year-on-year growth rates of about 50%, 20%, and 20%, respectively. The compound revenue growth rate was 35%, and the compound profit growth rate was 29.3%. The guaranteed exercise takes 80% of the target value. If calculated based on the guaranteed value, the compounded growth rate of the company's 24-26 revenue was about 25% per year, and the compound growth rate of net profit after deducting non-return to mother was about 20% per year. The total cost of amortization is estimated at RMB 31.73 million, of which RMB 1,064, 1291, 635, and 1.83 million for 24-27, respectively. After the implementation of the stock incentive plan, it will have a positive effect on employee cohesion, team stability, and company operating efficiency, thereby improving the company's operating performance and intrinsic value.
The pace of holding exhibitions is slanted in the second half of the year, and profits are expected to increase. According to the company's official account, 24Q1 has held a total of 2 exhibitions, 24Q2 plans to host 4 exhibitions (Osaka, Japan, Jakarta, Indonesia, Tokyo, and Dubai, UAE), and 10 exhibitions as planned in the second half of the year. The overall pace of the exhibition is skewed compared to the second half of '23, and profits are also expected to be concentrated in Q3 and Q4.
Profit forecasting and investment advice. The company is expected to achieve net profit of 2.8, 350, and 420 million yuan respectively in 24-26, with year-on-year growth rates of 47.4%, 25.6%, and 21.6% respectively in 24-26, keeping the judgment that the company's reasonable value was 29.81 yuan/share unchanged, corresponding 25 times PE in 24, giving it a “buy” rating.
Risk warning. Macroeconomic fluctuations; recurrent epidemics; low expectations for market expansion; geopolitical risks.
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