Sinoma International Engineering Co.Ltd(600970) (600970)
Event: the company announced the draft of restricted stock incentive plan, which plans to grant no more than 59.5 million restricted shares, accounting for 2.68% of the total A-share capital of the company, including 49.5 million shares for the first time and 10 million shares reserved; The source of the underlying stock is the directional issuance of the company to the incentive object; The grant price is 5.97 yuan / share (about 50% of the latest closing price); the grant object is no more than 208 people (including 8 directors and senior executives including the chairman, and the rest are core management, business and technical backbone); the first grant is planned to be unlocked in three phases, and the assessment period covers 2022-2024.
The assessment objectives show confidence, and the incentive plan is expected to enhance the motivation of the company. The performance assessment objectives of the incentive plan are as follows: 1) based on 2020 (the restructuring report discloses that the pro forma net profit attributable to the parent company for 2020 injected into the three companies is RMB 1.61 billion), the compound growth rate of net profit attributable to the parent company from 2022 to 2024 shall not be less than 15.5%; 2) the average roe deducting non weighted rights from 2022 to 2024 shall not be less than 14.9%, 15.4% and 16.2% respectively. 3) each year from 2022 to 2024 Δ EVA is greater than zero. And the performance growth rate and roe are not lower than the 75th percentile of the benchmarking enterprise. The equity incentive plan sets a clear target of compound growth rate of no less than 15.5% from 2020 to 2024, and the roe assessment is upward year by year, demonstrating the company’s confidence in sustained and steady growth and continuous improvement of roe in the next three years. At the same time, the equity incentive plan is also expected to bind the interests of executives, backbone and shareholders, and further stimulate the company’s performance and market value.
Give full play to the advantages of internationalization and cooperate with brother companies to accelerate the expansion of overseas localized business. The announcement company and Beijing New Building Materials Public Limited Company(000786) subordinate to China Building Materials Group jointly established a joint venture in Thailand, Including company (including wholly-owned subsidiaries) holds 20% of the shares. The joint venture is the main body to implement the project of paper gypsum board production line with an annual output of 40 million square meters, light steel keel with an annual output of 3000 tons and decorative gypsum board production line with an annual output of 4 million square meters. The total investment is estimated to be 55 million US dollars, the construction period is 18 months, and the after tax financial internal rate of return is expected to be 11.58%, with good profitability. In addition, it is announced that the company is wholly-owned Sinoma overseas, a subsidiary, and Sinoma Science & Technology Co.Ltd(002080) wind power blade Co., Ltd., a subsidiary of the group, plan to establish a joint venture in Brazil, of which Sinoma overseas holds 30%. The project company implements the construction project of 260 sets of wind power blade manufacturing base with an annual output, and the total investment is estimated to be USD 28.782 million. Previously, the company announced that projects such as battery diaphragm in Vietnam and calcium silicate board in Nigeria have been put into operation. The company has signed strategic cooperation agreements with enterprises within the group such as Sinoma Science & Technology Co.Ltd(002080) , Sinoma cement, Beixin group and Geological Exploration Center. At present, it has been gradually implemented. The company has extensive overseas layout and international operation advantages. It can cooperate with brother enterprises in the group to carry out overseas investment business. According to the plan, it plans to strive to form more than five “100 million yuan” profit platforms around the world during the 14th Five Year Plan period, and there is great potential to continue to expand localized investment business in the future.
The policy vigorously promoted the industry’s clean and low-carbon production, and the company deeply benefited from the rapid increase in the demand for green intelligent transformation. Recently, the national development and Reform Commission and other ten ministries and commissions have issued documents to promote cleaner production. The document points out to promote the “one line, one policy” green transformation and upgrading of key industries such as energy, steel, building materials, non-ferrous metals, petrochemical and chemical industry, accelerate the implementation of systematic cleaner production transformation in stock enterprises and parks, and propose to complete the cleaner production transformation of 850 million tons of cement clinker in the 14th five year plan for building materials. The national development and Reform Commission and other five departments issued the benchmark level and benchmark level of energy efficiency in key areas of high energy consuming industries (2021 Edition) 。 The document points out that enterprises should be guided to carry out energy-saving and carbon reduction technological transformation in an orderly manner, and resolutely eliminate backward production capacity, backward processes and backward products in accordance with the law and regulations. With the strong promotion of policies, the demand for green and intelligent transformation in the cement industry is expected to increase rapidly. The company announced that the proportion of undertaking or providing single services in China’s cement line is nearly 70%. With advanced technology and rich customer resources, it will deeply benefit from the increase of quality and efficiency improvement and green upgrading business in the cement industry in the future.
Investment suggestion: we estimate that the net profit attributable to the parent company of the company in 21-23 years will be RMB 1.71/21.7/2.51 billion respectively, the corresponding EPS will be RMB 0.77/0.98/1.13 respectively, and the corresponding PE of the current stock price will be 16 / 12 / 11 times respectively, maintaining the “buy” rating.
Risk tip: the implementation of equity incentive fails to meet expectations, the transformation of green intelligence fails to meet expectations, and overseas epidemics are repeated.
