Summary of events: the company issued a 2021 restricted stock incentive plan (draft), which intends to grant 536100 restricted shares to 99 people, including the company's main middle and senior management and core employees, accounting for 0.67% of the company's total share capital. The first grant price is 40.96 yuan per share, with a maximum sales limit of 2 years and an annual unlock of 50%.
The incentive object is fully covered, and the performance evaluation goal of lifting the sales restriction is high. This equity incentive is awarded to a total of 99 people, covering the company's main middle and senior managers and core employees. According to the 2020 Annual report, the incentive target accounts for about 21.95% of the company's total 451 employees, and the incentive plan covers a wide range of people. It will help to stimulate the enthusiasm of all employees in the company, which will help the company to seize the market opportunity of the sixth grade switching, expand market share and improve performance.
This equity incentive also sets a higher unlocking condition: the revenue in 2021 and 2022 is not less than 900 million yuan and 1.8 billion yuan respectively. According to the company's revenue of 677 million in 2020, the growth in 2021 and 2022 will be no less than 32.94% and 165.88% respectively over 2020. Under the condition that the company's gross profit margin and net profit margin remain relatively stable, the company's performance corresponding to the assessment target will increase significantly.
With outstanding technical strength, equity incentives help to seize China's 600 billion market and achieve all-round business expansion.
The technology leadership gained by continuously high R & D investment is the company's core competitiveness. at present, the company has 12 core technologies, 135 patents and more than 40 kinds of catalyst formulation technology (technical secrets). On July 1, 2021, the national six emission standard has been fully implemented, and the market size is expected to be more than doubled to the level of 100 billion. With the help of this equity incentive, the company is expected to seize the opportunities and challenges brought about by the standard switching, while consolidating its leading position in the aftertreatment market of light truck diesel engines, actively expand into the fields of medium and heavy trucks, gasoline engines, non-road mobile machinery, ships and fixed source pollution control, so as to realize the horizontal industrial expansion from diesel to gasoline, from roads to non-roads and from land to water.
Profit forecast and investment suggestion: in view of the higher unlocking conditions of the company's equity incentive and the certainty released by the market after the sixth grade, the company's profit forecast for 2022 and 2023 is raised, and it is estimated that the company's EPS 2.21 EPS from 2021 to 2023 is 5.79 yuan, corresponding to PE35/23/17 times. Maintain a "buy" rating.
Risk Tip: the risk that the company's sixth national market expansion is not as expected.