The 2021 incentive plan was issued, and in the performance evaluation target, the income in 2022 doubled compared with the same period last year. On the evening of July 22, the draft restricted stock incentive plan for 2021 was released, which proposed to grant 536100 restricted shares to 99 employees, accounting for 0.67% of the total share capital, of which 476100 shares were awarded for the first time, accounting for 0.59% of the total share capital. The price for the first award is 40.96 yuan per share. Another 60,000 shares are reserved for the grant personnel and the grant price to be confirmed. The company-level performance evaluation target is not less than 900 million yuan in 2021 and 1.8 billion yuan in 2022. We believe that this incentive plan covers a wide range of employees and is expected to fully mobilize the enthusiasm of the core backbone, while the lifting conditions demonstrate the company's confidence in future development. We maintain the homing net profit forecast for 2021-2023 at 2.282,375 and 548 million yuan. Taking into account the outstanding growth of the company, we give the 21-year 45x target PE (the average expected average Wind of comparable companies is 41x), the target price is 128.25 yuan, and maintain the "buy" rating.
The incentive program covers a wide range of personnel, and the performance evaluation objectives demonstrate the company's confidence in the future development. For the first time, the incentive program covers 99 directors, senior managers, middle managers and core staff, covering a wide range of employees. It is expected to fully stimulate the enthusiasm of the company's managers and core personnel, so as to consolidate the company's existing competitive advantage. And move towards the goal of horizontal expansion from diesel to gasoline, from roads to non-roads, and from land to water. The incentive plan will be lifted in two phases, and the performance assessment requirements are not less than 900 million yuan in 2021 and 1.8 billion yuan in 2022. We believe that this incentive plan demonstrates the company's confidence in future development, helps to improve the company's governance structure, improve the long-term incentive mechanism, enhance the company's internal cohesion and core competitiveness, and achieve long-term and sound development.
The sixth national emission standard has been fully implemented, and the company is expected to enter the performance harvest period. The national sixth emission standard for motor vehicles has been fully implemented on July 1, 2021, promoting the volume and price of national six post-processing products to rise. We estimate that the market space in 2021 will exceed 100 billion yuan, an increase of 12% over the same period last year. We believe that Ecolan's market development and technological research and development are leading, and it is expected to continue to consolidate its leading position in the afterprocessing market of light truck diesel engines in the process of market expansion, and to expand to medium and heavy trucks and gasoline engines.
In addition, the non-road country IV standard will be implemented in December 2022. According to the annual report, the company has carried out product pre-research and calibration tests with a number of customers in the off-road field, which is expected to contribute new growth points in the future.
Maintain the "buy" rating and raise the target price to 128.25 yuan
Taking into account that the company has not yet held a general meeting of shareholders to consider the incentive plan, we temporarily maintain the forecast of 2021-2023 net profit of 2.28 million yuan, 375 million yuan, 548 million yuan, and the corresponding EPS is 2.85 pound 4.69 pound 6.86 yuan.
Referring to the average PE of comparable company's Wind consensus forecast in 2021, taking into account the rapid growth of market capacity in tail gas post-treatment and the considerable growth of the company's return net profit (2021-2023 CAGR64%), a certain valuation premium is given to the company, which is 45 times PE in 2021, with a target price of 128.25 yuan (previous value: 114yuan) to maintain the "buy" rating.
Risk hint: the risk that the implementation effect of the industry policy is lower than expected and the progress of the company's product certification is lower than expected.