Incidents:
On the evening of July 9, the company released an equity incentive plan (draft). The number of stock options to be granted to the incentive targets was 70.00 million, accounting for about 3.02% of the current share capital.
Comment:
The equity incentive release binds to the core core, demonstrating confidence in long-term development. The company issued an equity incentive plan (draft). The number of stock options to be granted to incentive recipients is 70.1 million, involving 163 executives and core business personnel, accounting for about 3.02% of the current share capital. The exercise price of stock options granted in this incentive plan is 13.58 yuan per share. This time, the incentive target unlocks the conditions for the 21-23 exercise period. Based on net profit in 2020, the net profit growth rate in 21-23 will not be less than 35%/70%/105%, and the year-on-year growth rate will not be less than 35%/26%/21%. We believe that the publication of the company's equity incentive plan can bind the core backbone, provide an incentive and restraint mechanism and talent guarantee for long-term steady development, and at the same time demonstrate the company's confidence in long-term development.
The interim report is expected to continue the acceleration trend in the first quarter. The company's annual operating targets can be expected to increase 45.77% year-on-year in revenue for the first quarter of '21, and contract debt to reach 233 million. Compared with the growth rate of 22.63% at the end of 2020, the company expects revenue and operating target for '21 to be 570 million (we think this is a conservative target). We believe that the relatively rapid growth rate in the first quarter indicates that the company's business demand is strong and that the Xinchuang business is developing smoothly. According to the progress of Xinchuang's implementation, the interim report performance is expected to continue the acceleration trend in the first quarter, and it is likely that the 21-year business target will be achieved.
Xinchuang's driving performance is expected to grow rapidly in the future. Zero Trust is driving medium- to long-term business model changes. The company promotes information security products in the fields of party, government, military, and enterprises all year round, and has a rich customer trust base.
It is expected that the rapid growth in performance of the past three years driven by Xinchuang is a probable event. At the same time, the company continues to strengthen solutions in the field of zero trust and promote the implementation of zero trust pilot projects. Looking forward to the next three to five years, the general trend of the zero trust industry, we are optimistic that the company will become China's Okta and achieve changes in the business model from products to SaaS.
Profit forecast and investment rating: Considering the company's equity incentive goals and the future timing of Xinchuang's revenue confirmation, we maintain our profit forecast. Revenue for 21-23 was 6/841/1,177 million, and the net profit of the mother was 0.91/14/214 million, maintaining the “increase in holdings” rating.
Risk warning: the domestic substitution process fell short of expectations, the development of the zero trust industry fell short of expectations, and market competition intensified
