In less than a month, the incentive plan of Kunshan Kersen Science & Technology Co.Ltd(603626) (603626, SH) declared “premature death”. According to the disclosure on Kunshan Kersen Science & Technology Co.Ltd(603626) February 18, the company’s 2022 stock option and restricted stock incentive plan was not considered and approved by the general meeting of shareholders.
The reporter of the daily economic news noted that Xu Jingen, the actual controller and chairman of the company, should decide whether the incentive plan is the main force. It is puzzling that Xu Jingen, as the chairman of Kunshan Kersen Science & Technology Co.Ltd(603626) , voted in favor of the board of directors. It is curious why he changed his mind in more than 20 days.
The incentive plan was rejected by the chairman
According to Kunshan Kersen Science & Technology Co.Ltd(603626) announcement, three proposals involving the company’s incentive plan were rejected by the general meeting of shareholders, and the voting results were: 2.551 million shares, accounting for 1.7119%; 146 million negative votes, accounting for 98.2881%; The voting situation of shareholders with abstention less than 0.5% is: 2551000 affirmative votes and 32400 negative votes.
That is to say, the overwhelming majority of the negative votes come from more than 5% of the shareholders of the listed company. As of September 30, 2021, the only shareholders holding more than 5% of Kosen shares are Xu Jingen and Wang Dongmei, who hold 140 million shares and 57.33 million shares respectively, with shareholding ratios of 25.08% and 10.27% respectively. On the whole, Xu Jingen should have voted against it.
Xu Jingen’s behavior is incomprehensible. Earlier, Kunshan Kersen Science & Technology Co.Ltd(603626) convened the board of directors on January 21, deliberated and approved the incentive plan and other related proposals. During the voting process, all nine directors of the company voted in favor, including Xu Jingen, chairman of the company.
The reporter of the daily economic news noted that the above incentive plan is the third incentive plan launched after Kunshan Kersen Science & Technology Co.Ltd(603626) went public in 2017. Previously, the company launched restricted stock incentive plans in 2017 and 2019 respectively. Among them, the incentive plan for 2017 was terminated in October 2018, and the incentive plan for 2019 is still within the validity period.
Has fallen below the exercise price of stock options
Xu Jingen is not the intended motivator of the Kunshan Kersen Science & Technology Co.Ltd(603626) incentive plan. The listed company originally planned to grant 9.5 million stock options to 788 middle-level managers and technical backbone personnel (including subsidiaries) and 1.3 million restricted shares to 81 middle-level managers and technical backbone personnel (including subsidiaries). Among them, the exercise price of stock options is 12.43 yuan / share, and the grant price of restricted shares is 6.22 yuan / share; The performance assessment objectives are: the operating revenue in 2022 is not less than 5 billion yuan or the net profit is not less than 400 million yuan; The operating revenue in 2023 shall not be less than 6 billion yuan or the net profit shall not be less than 480 million yuan.
“(incentive plan) not passed? What’s the situation?” Investors in Kunshan Kersen Science & Technology Co.Ltd(603626) are also puzzled. Speculation: “too high equity incentive also leads to no profit?”
The reporter of the daily economic news noted that the share price of Kunshan Kersen Science & Technology Co.Ltd(603626) has fallen sharply since late January. On January 27 and 28, the company’s share price fell by 10.02% and 4.8% respectively. As of the closing on February 18, the company’s share price closed at 10.20 yuan / share, 17.94% lower than the exercise price of the above stock options.
In terms of performance, Kunshan Kersen Science & Technology Co.Ltd(603626) 2021’s performance rebounded significantly compared with 2020. In the first three quarters of 2021, the company achieved an operating revenue of 2.696 billion yuan, a year-on-year increase of 8.18%; The net profit attributable to the parent company was 364 million yuan, a year-on-year increase of 385.10%. The performance forecast for 2021 shows that Kunshan Kersen Science & Technology Co.Ltd(603626) is expected to have an annual net profit of 380 million yuan to 400 million yuan, but the deduction of non net profit is only 90 million yuan to 110 million yuan. It is reported that in 2021, the company obtained about 248 million yuan of investment income from the disposal of the equity of its subsidiaries and about 42 million yuan of government revenue subsidies.
Taking the company’s performance in 2021 as a reference, Kunshan Kersen Science & Technology Co.Ltd(603626) it is not easy to achieve the performance evaluation objectives of the above incentive plan.
