Incident: On July 25, 2024, the company disclosed the 2024 employee stock ownership plan (draft). The transfer price of shares to be repurchased by the company is 9.64 yuan/share, and the size is no more than 0.81 million shares, accounting for 0.98% of the company's total share capital. The total number of people participating in this shareholding plan was no more than 39, including 6 directors, supervisors, senior management, and core technical personnel. The underlying stocks obtained under the employee stock ownership plan are unlocked in two installments. The ratio of the underlying shares unlocked in each instalment is 50% and 50%, respectively.
Comment:
Binding the company's core personnel, the goal is to demonstrate confidence in business development. The participants in this employee stock ownership plan are mainly directors (excluding independent directors), supervisors, senior management, core technical personnel, middle management, and core technical (business) cadres, which helps motivate and bind core personnel.
The target value for the performance assessment is that the 2024 revenue growth rate is not less than 25% or the net profit growth rate is not less than 25%, and the cumulative revenue growth rate for 2024-2025 is not less than 175%, and the cumulative net profit growth rate is not less than 175%, demonstrating the company's confidence in future business development.
The actual controller proposed the implementation of the 2024 mid-term dividend, with great emphasis on investor returns. On July 21, the company announced that it received the “Proposal on the 2024 Mid-Term Dividend Plan for Hangzhou AGCO Technology Co., Ltd.” issued by Mr. Fang Xiaowei, the actual controller and chairman. It is proposed to distribute a cash dividend of 1.80 yuan (tax included) to all shareholders for every 10 shares based on the company's total share capital deduction of shares in the company's special securities account. The company attaches great importance to returns to investors and continuously implements the “Improve Quality, Increase Efficiency, and Value Return” action plan.
The industry space is expanding, and the company's competitive advantages such as products and channels continue to be consolidated. Intelligent cutting has advantages that are difficult to surpass by traditional manual cutting. Policies encourage and support the development of the industry. Under the trend of increasing labor costs and population aging in the manufacturing industry, we judge that the market space for intelligent cutting equipment will continue to grow. The company's products have outstanding cost performance, strong iterative promotion capabilities, domestic direct sales and distribution expand market coverage, shift from relying on dealers overseas to a localized layout, and continue to consolidate channel advantages.
Profit forecast and investment rating: We predict that the company's net profit for 2024-2026 will be 0.101/0.136/0.181 billion yuan, respectively, +34.2%/+34.3%/+33.3%, respectively. The PE corresponding to the closing price on July 26, 2024 will be 15.4/11.5/8.6 times, respectively, maintaining the “buy” rating for the company.
Risk factors: risk of industry penetration falling short of expectations, risk of exchange rate fluctuations, risk of R&D failure