Events:
According to the draft equity incentive announced by the company, the company provides restricted stock incentives to 60 senior executives and core employees at 4.04 yuan per share, with a total of 2.342 million shares accounting for 0.93% of the company's total share capital. The performance appraisal target is to take 2017 as the base, with net profit growth rates of no less than 50 per cent, 75 per cent and 100 per cent respectively from 2018 to 2020.
Comments:
1. Brand accumulation promotes the accelerated growth of company revenue.
With the increase and improvement of the company's brand series and the improvement of brand market awareness, brand promotion goes deep into second-and third-tier urban areas, with concerts, master classes, piano competitions and other promotion activities, sales have increased steadily. Since the second quarter of 2017, the company's sales revenue has accelerated to 20% +. In 2017, the company sold 35117 pianos (vertical plus grand pianos), an increase of 14% over the same period last year, and the average price benefited from structural adjustment increased by 3.5%, piano sales revenue increased by 18.11% compared with the same period last year, and the gross profit margin still increased by 1.12% despite the rise in raw materials. 2018Q1 revenue increased by 22.57%, with a gross profit margin of 28.75%, up 2 percentage points from the same period last year. The company's brand strength has been recognized by customers, and the bargaining power is gradually reflected.
2. the company's art education business may accelerate its development in the past 18 years.
1) the company officially launched the Smart Piano classroom in 2017, which combines the APP course of Walt Disney Company Animation Smart Piano, the teaching method of Vienna University of Music and Performing Arts, and Helen Smart Piano as teaching aids to enlighten children's way to learn piano. 2) since 2014, the company has been operating by signing cooperation agreements with local training institutions, and the art education and training course system is defined as art enlightenment, music education, art education and dance education.
3) the EMP music enlightenment project in Vienna, following the European idea of music enlightenment education, has been landing in China since 17 years. 4) in 2017, the company launched the intelligent piano I piano1, which brings the intelligent mode of piano distance teaching and self-study to a higher level, builds value-added education services, and further attracts the attention of social and family cultural consumption.
3. Equity incentives will fully mobilize the enthusiasm of employees and speed up the development of piano sales and art training business. This time, the company will provide restricted stock incentives to 60 senior executives and core employees with a total of 2.342 million shares, accounting for about 0.93% of the company's total share capital. The performance target is based on 2018, with net profit growth rates of no less than 50 per cent, 75 per cent and 100 per cent respectively from 2017 to 2020. This is the first incentive for the company since its listing in 2012, which will fully mobilize the enthusiasm of the core staff and speed up the development of piano sales and art training business.
4. Maintain the "highly recommended-A" rating. After years of R & D investment, the company has accumulated a good reputation, sales began to substantially outperform the industry, while benefiting from the continuous upgrading of consumer product structure, the future is expected to maintain a good situation of rising prices and volume. The EPS from 2018 to 2020 will be raised to 0.25,0.31 and 0.39 yuan respectively, compared with the same period last year: 52%, 26% and 25% respectively, corresponding to the 18-year PE and PB: 31 and 2.2 respectively, maintaining the "highly recommended-A" rating.
Risk hint: the progress of art education and training is lower than expected