The company's recent situation

The company announced the 2024 employee stock ownership plan, with a total shareholding of no more than 3.069 million shares, accounting for 0.31% of the company's total share capital. The number of people participating in the current employee shareholding plan was no more than 122. The shares in the company's employee stock ownership plan all came from share repurchases. The employee stock ownership plan transfer price this time was 11.45 yuan/share (the company's closing price on July 29, 2024 was 16.49 yuan/share).

reviews

The target net profit CAGR for the 2023-2026 employee stock ownership plan is 36%, which greatly exceeds market profit expectations. According to the announcement, the current employee stock ownership plan assesses the two indicators of net profit growth rate and cumulative net profit growth rate for each assessment year 2024-2026, and the attributable ratio is determined based on the higher of the actual completion ratio of the two: 1) Single year of assessment: the assessed net profit attributable to mother in 2024/25/26 was 1.56/2.11/2.63 billion yuan, a year-on-year growth rate of 50%/35%/25%; 2) The cumulative profit for the assessment was 1.56 billion yuan, 2024- The cumulative net profit to mother for '25 was $3.66 billion, and the cumulative net profit for 2024-26 was $6.3 billion. The assessment target corresponds to the 2023-26 net profit CAGR of 36.3%, which greatly exceeds the market forecast CAGR of 22.3% (Wind's unanimous expectation).

This time, the employee stock ownership plan covers a wider range and is conducive to motivating employees. The current employee shareholding plan covers no more than 122 people (v. s. The 2022 employee shareholding plan covers no more than 41 people), and the company has also set up performance reviews for individuals, and personal performance assessments have also increased the assessment level. We believe that this employee stock ownership plan is more flexible and challenging, effectively closely bundling company interests, shareholders' interests, and employee interests, and is also conducive to mobilizing employee motivation.

The assessment targets for this employee stock ownership plan exceeded expectations or because the market fell short of Jiayou's business growth in China, Mongolia and Central Africa. 1) China and Africa: According to the company's announcement, 2Q24 completed the acquisition of the BHL fleet. We believe that the company may deepen the layout of the African inland transportation business network and gradually expand its logistics business from the Congo (DRC) to Central and Southern Africa; in addition, we believe that after the commissioning of the Sakania project in Zambia, production capacity or rapid rise; 2) China and Mongolia: We believe that with the company's own logistics integration capabilities, it is expected that it will continue to increase its share at Ganqimaodu Port, and is expected to replicate its capabilities to other ports.

Profit forecasting and valuation

Considering the uncertainty of the commissioning of some projects, we have kept the company's profit forecast unchanged for the time being. Currently, the company's stock price is 10.7x/8.8x P/E in 2024/25; we maintain the target price of 22.89 yuan/share unchanged. The corresponding P/E for 2024/25 is 14.8x/12.3x P/E, which has 38.8% upside compared to the present.

risks

The production capacity of African projects has fallen short of expectations, and the geographical pattern is at risk.