The company issued the third phase of the employee stock ownership plan (draft). The total number of directors (excluding independent directors), supervisors, senior management, and middle-level cadres and core employees of the company and its holding subsidiaries who play an important role in the company's overall performance and medium- to long-term development is no more than 0.012 million. It is proposed to buy back no more than 79.4621 million shares of the company at a price of 20.31 yuan/share, accounting for about 1.41% of the total share capital, a capital scale of no more than 1.614 billion yuan. The term of existence is 3 years, and the lockdown period is 12 months.
In this shareholding plan, the maximum subscription ratio for directors, supervisors, and senior management is 30%, and the total proposed subscription ratio for other personnel, such as management cadres, technical experts, and business executives, is 70%.
The target rate of return on net assets for the third phase of the employee stock ownership plan is not less than 20.00%, which is relatively stable, reflecting the impact of external macroeconomic pressure. In terms of evaluating the company's performance, the assessment year for the first and second assessment periods is 2024/2025, respectively, and the assessment target is that the return on net assets for 2024/2025 is not less than 20.00%. Looking back at the company's second employee stock ownership plan, the company's performance assessment index for the first and second vesting period is that net profit for 2022/2023 increased by no less than 2 billion/3 billion yuan compared to 2020, and the return on net assets in 2022/2023 was not less than 22%/21%. Both vesting periods required a cash dividend of not less than 2 yuan per share or the total cash dividend of no less than 50% of the current year's net profit.
The company's high dividend ratio still has a solid guarantee. Looking back at the company's “Shareholder Return Plan for the Next Three Years”, on the premise that the company's cash flow satisfies the normal operation and long-term development of the company, the company's annual cash dividend from 2022 to 2024 is not less than 2 yuan per share, or the total amount of cash dividends is not less than 50% of the net profit attributable to shareholders of the listed company during the year. If the 2024 cash dividend is estimated at least 2 yuan per share, the current dividend rate target is no less than 4.92%. If the total amount of cash dividends is estimated to be no less than 50% of the audited net profit attributable to shareholders of the listed company in the year, based on net assets of 120.646 billion yuan at the end of 2023, with a 20% yield as the target, the estimated net profit target is not less than 24.129 billion yuan, then the current dividend rate target is not less than 5.27%.
As a leader in the white power industry, the company is actively expanding its product line based on the air conditioning business. At the same time, the diversified business layout is progressing steadily. The industrial products and green energy sectors are expected to bring new growth increases, and profitability may continue to improve. The third phase of the employee stock ownership plan is conducive to further improving the benefit-sharing and risk-sharing mechanisms between shareholders, management, middle level cadres and core employees to ensure the achievement of development strategies and business goals. We estimate that in 2024-2026, the company's net profit to mother will be 31.6/34.4/37.5 billion yuan, and the corresponding EPS will be 5.61/6.11/6.66 yuan, respectively. The current stock price will correspond to PE 7.24/6.66/6.10 times, respectively. Give it a “Recommended” rating.
Risk warning: risks such as macroeconomic fluctuations, increased market competition, and fluctuations in raw material prices