Star Technology (832885)
event
The company issued the 2021 equity incentive plan (Draft) on November 26, 2021. The incentive plan plans to grant a total of 1.7 million shares (including 800000 stock options and 900000 restricted shares) to incentive objects. The exercise price (including reservation) of stock options granted in the incentive plan is 25 yuan / share; the grant price (including reservation) of restricted shares is 12.5 yuan / share.
Key investment points
The company issued the equity incentive plan for 2021, and the high growth performance target showed development confidence
The assessment criteria of the incentive plan are one of the following two: 1) the operating revenue from 2022 to 2024 shall not be less than RMB 2.0/2.4/288 million respectively. Based on the operating income in 2020, the growth rate shall not be less than 46% / 75% / 110%; 2) The non net profit deducted in 2022 shall not be less than 40 million yuan, the cumulative non net profit deducted in 2022-2023 shall not be less than 88 million yuan, and the cumulative non net profit deducted in 2022-2024 shall not be less than 145.6 million yuan. The performance growth target exceeded our previous expectations, demonstrating the company’s confidence in sustainable development.
Equity incentive binds core personnel and continues to attract talents
The total number of employees granted by the incentive plan for the first time is 59, accounting for 20.7% of 285 employees and 52.2% of 113 technicians. The plan establishes and improves the company’s long-term incentive mechanism, which aims to attract and retain talents and fully mobilize the enthusiasm of the company’s management and core backbone. Servo system industry is a technology intensive industry with high requirements for core talents and technical capabilities; Only the value of restricted shares granted to core employees is calculated. The per capita grant value of this equity incentive is about RMB 163000, which greatly improves the company’s attraction to talents.
Stable demand for military servo, expanding downstream customers of wind power
Affected by the fluctuation of military orders and the decrease of wind power customer procurement, the company’s Q3 performance declined; We believe that the military orders of the company in the fourth quarter are expected to be accepted; The company has developed new customers in the field of wind power, and the pitch control system products are expected to be in large quantities next year; Most of the company’s products in the industrial control field, such as high-end injection molding machines, internal winding machines and other equipment, rely on imports, and there is still a high space for import substitution.
Profit forecast and valuation
The company is a leader in the localization of military servo system and continues to explore new energy and industrial control fields. Under the background of continuous development of wind power customers and acceptance of military orders, we expect the company to achieve revenue of RMB 127 / 198 / 239 million from 2021 to 2023, with a year-on-year growth rate of – 7.5% / 56% / 21%, and the net profit attributable to the parent company is expected to be RMB 3275 / 4509 / 49.99 million, with a year-on-year growth rate of – 15% / 38% / 11%, with corresponding EPS of RMB 0.39/0.53/0.59/share and PE of 63 / 45 / 41 times respectively, giving a “overweight” rating.
Risk tip: the acceptance of military orders is less than expected, and the expansion of wind power customers is less than expected
