Core views:

The company granted a total of 30 million share options. On May 2, 2024, the company announced the granting of share options. The company has granted share options to a number of eligible participants (i.e. group employees) in accordance with the share option plan adopted on May 31, 2022 (2022 share option plan) to subscribe for a total of 30 million shares of issued ordinary shares with a face value of HK$0.10 per share on the date of publication of the announcement. The purpose of granting share options is to link employees' interests with the company, inspire the company to become a global leader in key areas, create long-term value for the company's sustainable and global operations, recognize employees' contributions, and absorb and retain well-skilled employees for the company's continued operation and growth.

The share options granted this time do not include performance targets. According to the announcement, the share options granted this time do not include performance targets and are subject to certain ownership conditions and the terms of the 2022 share option plan, which already include the situation where the share option will expire if the employee is no longer an employee of the company. The closing price of the shares on the date of grant and the exercise price of the granted shares were both HK$14.30 per share, and the share options are valid from May 2, 2024 to December 31, 2029 (inclusive of the first and last two days). After this grant of share options, according to the 2022 share option plan, the number of share options that can be granted in the future is 86.184 million.

Profit forecast and investment advice: The company is a leading global supplier of exterior parts and structural parts. The exterior business is growing steadily, and the medium- to long-term battery box business is expected to contribute significantly. We expect the company's 24-26 EPS to be 1.99/2.41/2.85 yuan/share, respectively. Combining industry average, comparable company valuations and optimism about the company's future development prospects, the company was given 12 times PE in 24 years, with a reasonable value of HK$25.80 per share, maintaining a “buy” rating.

Risk warning: industry sentiment is declining; chip shortage exceeds expectations; competition exceeds expectations, etc.