\u3000\u3 Jiangsu Eastern Shenghong Co.Ltd(000301) 030 Suzhou Shijing Environmental Technology Co.Ltd(301030) )
Event: the company announced the 2022 restricted stock incentive plan (Draft).
The 2 million share incentive scheme was implemented to stimulate vitality, and the compound growth rate of net profit in the first assessment from 2021 to 2024 was nearly 40%. This equity incentive is the first incentive plan after the company’s listing, which will effectively stimulate the vitality of the team and continue to expand the business scale. 1) Number of incentives: this incentive tool is the second type of restricted shares, with a total of 2 million shares, accounting for 1.50% of the total share capital of the company, of which 1.63 million shares are granted for the first time and 370000 shares are reserved. 2) Grant price: 14.47 yuan / share. 3) Incentive objects: a total of 43 people, mainly directors, senior high school managers and core technicians, of which 101000 shares were granted to Chairman Dong Shihong, 71000 shares to Director / Deputy General Manager Zhang Shizhong, 71000 shares to deputy general manager Wu Qianqian, 70000 shares to chief financial officer Qin Jinjin and 52000 shares to Secretary / Deputy General Manager Yang Baolong, respectively, accounting for 5.05%, 3.55%, 3.55%, 3.50% and 2.60% of the total share capital of the company. 4) Performance assessment: the assessment year of the incentive plan is 20222024 and is divided into three periods. The assessment is based on the revenue or net profit value in 2021 and divided into two levels. If the first level achieves the revenue growth rate of no less than 50%, 95%, 153% or net profit growth rate of no less than 60%, 108% and 170% respectively compared with the base in 2021, Then the target conditions are attributed according to the 100% coefficient the proportion of each batch of plans, corresponding to the compound growth rate of revenue of 36.26% or the compound growth rate of net profit of 39.24% from 2021 to 2024; In the second gear, if the revenue growth rate in 20222024 is not less than 40%, 76%, 122% or the net profit growth rate is not less than 48%, 86% and 136% respectively compared with the base in 2021, the trigger conditions are attributed according to the 80% coefficient the proportion of each batch of plans, corresponding to the compound growth rate of revenue of 30.45% or the compound growth rate of net profit of 33.14% in 20212024. From the perspective of performance assessment objectives, the target of net profit growth rate continues to be higher than the revenue growth rate. The company is expected to strengthen cost and expense control and continuously improve profitability.
As the leader of pollution prevention and control equipment in photovoltaic process, the unit volume value is expected to increase and the growth is accelerated. We expect that in 2020, the revenue of the company’s photovoltaic process waste gas equipment will account for more than 75% of the market, and its core advantages 1) long-term brand accumulation, building a high share, more than 10 years of photovoltaic process project experience, strong risk resistance and adaptability, accumulating high-quality customer resources, and basically realizing the full coverage of core photovoltaic cell & module manufacturers in the downstream; 2) Strong technology R & D and obvious cost advantage. The self-developed LCR technology has a sell-off efficiency of 99%, 20% less investment cost than SCR sell-off technology, 30% ~ 50% lower operation cost and no secondary pollution. With the accumulation of market share created by the advantages of brand, technology and cost, the company is expected to copy the advantages of waste gas equipment to the comprehensive supporting system. In 2021, the company won the bid of 200 million yuan / 310 million yuan successively, and the large single verification mode of comprehensive supporting equipment changed. The volume value of single GW of comprehensive supporting equipment system can reach 50-60 million, which has 5-11 times the investment of waste gas equipment.
The integration of equipment operation improves cash flow and expands new areas of manufacturing process. 1) the company will accelerate the expansion of third-party detection, custody, operation and maintenance and other operation services, stabilize the mode and improve cash flow. 2) Develop cement, semiconductor, automobile manufacturing and other precision process markets, and accumulate more technologies.
Profit forecast and investment rating: the new energy revolution drives the expansion of photovoltaic production capacity and releases the demand for process governance. The company has established the leading position of photovoltaic process governance by virtue of its technology, brand and cost advantages, and the expansion of Integration & new fields promotes growth. We maintained that the net profit attributable to the parent company from 2021 to 2023 was 75 / 120 / 186 million yuan respectively, with a year-on-year increase of 22.29% / 60.10% / 55.11%, corresponding to 50, 32 and 20 times PE, and maintained the “buy” rating.
Risk tip: orders are not as expected, R & D risks, and industry competition intensifies
