2022: equity incentive of listed companies subordinate to military central enterprises is expected to accelerate
1) during the “14th five year plan” period, the equipment volume is large, the orders of major leading enterprises are sufficient, and the industry boom is upward. Equity incentive is expected to boost the high-quality development of the company, so as to better meet the needs of the state and customers.
2) the state promotes the reform of state-owned enterprises, aims to “improve the efficiency of state-owned capital and enhance the vitality of state-owned enterprises”, and puts forward seven reform fields, such as “dividing the categories of state-owned enterprises and promoting reform by classification”. In 2022, when the “three-year action of state-owned enterprise reform” ends, the promotion of various reform measures is expected to be strengthened, and the equity incentive of listed companies, as one of the important contents of state-owned enterprise reform, is also expected to be accelerated.
3) since the beginning of 2022, the adjustment of the national defense sector may usher in a better time point for equity incentive, and the cost related to equity incentive is low.
Listed companies of Military Central Enterprises: the equity incentive coverage has reached 39%, and it is expected to continue to improve in the future
1) by the end of 2021, A-share listed companies subordinate to military central enterprises have successively implemented more than 50 equity incentives, involving 37 listed companies, with a total of about 35000 incentive personnel. The equity incentive coverage of A-share listed companies subordinate to military central enterprises has reached 39%.
2) according to the horizontal comparison of military industry group, the equity incentive coverage of China Nuclear Power Group / China Electronics Technology Co., Ltd. / Aerospace Science and Industry Co., Ltd. is high, and there is still room for improvement in the equity incentive coverage of all military industry central enterprises.
3) in terms of incentive form, restricted stock: stock option is about 7:3. Among the listed companies subordinate to military central enterprises that have carried out incentive, 35% have formulated a 10-year incentive plan and 27% have implemented more than one equity incentive.
The effect of equity incentive is remarkable, and the overall trend of stock price and performance is good after the incentive is carried out
1) taking the announcement date of the incentive draft as T0, as of t0 + 36 months, the share price of 32% of enterprises has more than doubled, and the share price of 41% of enterprises has increased by 50% ~ 100%. The overall trend of share price is good. For three consecutive years after the implementation of the incentive, the growth rate of annual revenue / net profit attributable to parent company of the incentive company remained generally stable.
2) Avic Shenyang Aircraft Company Limited(600760) formulate a 10-year incentive plan and implement the first phase in 2018, granting 3.17 million shares to 80 incentive objects. Set the unlocking conditions of return on net assets / compound growth rate of net profit / economic value added. Since 2017, the compound growth rate of revenue / net profit attributable to parent company has been 12% / 28% respectively. Since the announcement of the incentive draft, the stock price has increased by 96% and the maximum increase during the period is 203%, significantly exceeding the national defense index and Shanghai stock index in the same period.
Military industry welcomes the dual wheel drive of “endogenous + extension”, and the two wings of “domestic demand + foreign trade” and “military products + civilian products” fly together
1) the national defense industry has a high growth certainty. In 2022, it will enter the sweet period of “business cycle + asset integration” and “endogenous + extension”. In the follow-up, “domestic demand + foreign trade” and “military products + civilian products”, the military industry index is expected to replicate the performance of the wind power index in the second half of 2021 in 2022, and the latter is in the upper position.
2) 2022 is the year when the “three-year action of state-owned enterprise reform” ends, and the relevant reform process is expected to accelerate. It is suggested to pay attention to the relevant subjects that are expected to benefit from the coupling resonance between the company’s own development and the reform of state-owned enterprises, such as: Avic Xi’An Aircraft Industry Group Company Ltd(000768) , Avic Shenyang Aircraft Company Limited(600760) , Aecc Aero-Engine Control Co.Ltd(000738) , Avic Electromechanical Systems Co.Ltd(002013) , Avic Aviation High-Technology Co.Ltd(600862) , China Avionics Systems Co.Ltd(600372) , North Industries Group Red Arrow Co.Ltd(000519) , China Shipbuilding Industry Group Power Co.Ltd(600482) , China Marine Information Electronics Company Limited(600764) , Aecc Aviation Power Co Ltd(600893) , Jiangxi Hongdu Aviation Industry Co.Ltd(600316) .
3) scale effect + refined management, “small core and large cooperation”. The performance flexibility of the main engine plant in the next five years is large: Aecc Aviation Power Co Ltd(600893) , Avic Xi’An Aircraft Industry Group Company Ltd(000768) , Avic Shenyang Aircraft Company Limited(600760) , Avicopter Plc(600038) , Inner Mongolia First Machinery Group Corporation Co.Ltd(600967) , Jiangxi Hongdu Aviation Industry Co.Ltd(600316) , China Cssc Holdings Limited(600150) .
4) raw materials and core supporting facilities: be optimistic about high barrier / high scarcity / high competition pattern superalloy / composite / component level supporting facilities / engine forging and casting parts and other sub circuits: Fushun Special Steel Co.Ltd(600399) , Gaona Aero Material Co.Ltd(300034) , Western Superconducting Technologies Co.Ltd(688122) , Avic Aviation High-Technology Co.Ltd(600862) , Weihai Guangwei Composites Co.Ltd(300699) , Aecc Aero-Engine Control Co.Ltd(000738) , Aecc Aero Science And Technology Co.Ltd(600391) , Avic Electromechanical Systems Co.Ltd(002013) , Beijing Beimo High-Tech Frictional Material Co.Ltd(002985) , Avic Heavy Machinery Co.Ltd(600765) , Chengdu Leejun Industrial Co.Ltd(002651) , Wuxi Paike New Materials Technology Co.Ltd(605123) , Guizhou Aviation Technical Development Co.Ltd(688239) , Wuxi Hyatech Co.Ltd(688510) , Anhui Yingliu Electromechanical Co.Ltd(603308) , Jiangsu Toland Alloy Co.Ltd(300855) , Xi’An Bright Laser Technologies Co.Ltd(688333) .
5) missiles and informatization with high industry growth: Unigroup Guoxin Microelectronics Co.Ltd(002049) , Hubei Feilihua Quartz Glass Co.Ltd(300395) , Fujian Torch Electron Technology Co.Ltd(603678) , China Zhenhua (Group) Science & Technology Co.Ltd(000733) , Chengdu Zhimingda Electronics Co.Ltd(688636) , Wuhan Guide Infrared Co.Ltd(002414) , Zhejiang Dali Technology Co.Ltd(002214) , China Marine Information Electronics Company Limited(600764) .
Risk tips: 1) the rhythm of equity incentive and asset securitization is lower than expected; 2) the delivery progress of military products is lower than expected.
