Muyuan Foods Co.Ltd(002714) half price equity incentive. The lifting standard is the growth rate of pig sales, but the relationship between the efforts of the company’s employees and pig sales is very low. Therefore, this incentive does not need much effort for the employees, which can be arranged by God.
Muyuan Foods Co.Ltd(002714) launched the equity incentive plan, and the stock price fell back at a high level, Muyuan Foods Co.Ltd(002714) is called “Zhumao” by investors, which means Maotai in the pig industry. However, investors do not seem to be interested in this equity incentive plan. The main reasons in this column are as follows.
First, the price of equity incentive is too low. It is obviously to reward the company’s executives with the value of investors. The subscription price of this equity incentive is 30.52 yuan, which is about half of the latest market price on the date of announcement. Although it is in line with the provisions of the management, it will constitute an implicit ex right to the company’s share price. Therefore, the decline of share price can also be understood as the result of ex right.
Second, the conditions for lifting the restrictions on sales of equity incentives are too simple. According to the equity incentive plan, the conditions for lifting the restrictions are that the sales of pigs in 2022 will increase by 25% compared with 2021, and the sales of pigs in 2023 will increase by 40% compared with 2021. This column has carefully studied what is “pig sales”. The word “sales revenue” is not used in the announcement, and the sales volume is most easily understood as the sales weight, such as how many kilograms or heads. It’s easier to control the conditions for lifting the ban manually, because there is basically no differentiation strategy for pigs. As long as the price is reduced, they can be sold. That is to say, if the end of 2022 is the preparation period before the new year’s day and the Spring Festival, if the sales volume does not meet the expected standard, as long as the company reduces the price for promotion, It is easy to achieve the sales target. Therefore, in this column, as long as there are no major accidents, there is almost no suspense about the sales reaching the standard, which is also an important reason why investors are not interested in this equity incentive.
Third, this equity incentive can not achieve the incentive effect for the company’s employees. In the opinion of individual employees, whether there is equity incentive or not seems to have no incentive effect on their work attitude, because employees do not know how they should work harder to achieve this goal. The key factor for the successful lifting of the ban lies in God. As mentioned in the previous column, as long as there are no major accidents, such as fire If there are irresistible problems such as plague, there is almost no problem in lifting the ban. However, there may be differences in work enthusiasm among employees, that is, employees who can get equity incentive are complacent, and employees who can’t enjoy equity incentive will also have imbalance in their hearts, which is not good for the development of the company.
Therefore, this column believes that such equity incentive is not a good thing. It can not only motivate core employees, but also cause non core employees to slow down. It would be better to implement the employee stock ownership plan for all employees, so as to bind the interests of employees and shareholders.
For investors in the secondary market, cyclical stocks such as Muyuan Foods Co.Ltd(002714) should still adhere to cyclical investment. Since there is no sign that the pig cycle has entered the rising period, investors should still focus on wait-and-see. Generally, cyclical stocks will have an obvious industry pain period before entering the rising cycle, Investors can wait for this period to buy stocks on bargain hunting.
