Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) (600426)
Conclusions and recommendations:
The company announced that it is expected to implement the draft restricted stock incentive plan in 2021, with 13.2 million shares to be granted, accounting for 0.625% of the total share capital of the company. There are 190 incentive objects granted for the first time, and the grant price is 17.93 yuan / share.
As a benchmark enterprise of coal chemical industry, the company has obvious advantages in cost and energy consumption, constantly plans new projects, enters the field of lithium batteries, degradable plastics and other new materials, escorts the long-term development of the company, is optimistic about the growth of the company and maintains the “buy” rating.
Equity incentive covers a wide range and stimulates employees’ enthusiasm: the company plans to grant 13.2 million restricted shares to 190 incentive objects in this equity incentive plan, accounting for 0.625% of the total share capital of the company. 10.6 million shares were granted for the first time. In addition to 11 directors and senior executives, 179 key personnel in core technology, operation, management and skills of the company were also granted, covering a wide range. The grant price is 17.93 yuan per share, with a discount of 45% compared with the current share price. This equity incentive will help the interests of core employees more closely combine with the long-term development of the company and shareholders, and fully mobilize the enthusiasm and creativity of employees.
Clear performance assessment objectives to demonstrate the company’s development confidence: for this equity incentive plan, the company has set perfect assessment objectives, including performance and dividend. The performance assessment objective is based on the revenue in 2020, and the revenue growth rate in 2022, 23 and 24 shall not be less than 80% / 85% / 160% respectively, not lower than the average level of the same industry and higher than the quantile level of the same industry in 2020; The dividend assessment objective requires that the pre tax dividend per share in 2022 / 23 / 24 shall not be less than 0.40/0.45/0.50 yuan respectively, and shall not be lower than the average level of the same industry and higher than the quantile level of the same industry in 2020. This equity incentive set up three periods for lifting the restrictions on sales, which are 24, 36 and 48 months from the date of completion of the registration of the granting of restricted shares. The performance evaluation shall be conducted and the restrictions on sales shall be lifted annually, so as to meet the performance evaluation objectives as the conditions for lifting the restrictions on sales. The proportion of lifting the restrictions on sales shall be 1 / 3 respectively. In addition, the incentive object also calculates the lifting limit according to the determination coefficient of individual performance evaluation indicators.
The new projects are progressing smoothly and the future performance growth is guaranteed: the company has strengthened its development in recent years and actively developed into the field of new materials. In February, the company’s 166600 ton refined adipic acid quality improvement project was put into operation, and the production capacity was gradually released; In October, the 300000 t / a DMC project of the company’s coal to ethylene glycol unit was successfully put into operation, marking the company’s further development in the field of lithium battery. With the continuous increase of output and cooperative customers, it will bring new profit growth to the company. In addition, the follow-up company is rich in projects under construction, including 300000 tons of amide and nylon material project, caprolactam and supporting devices have been in the trial production stage, and 200000 tons of nylon 6 chips and other production devices are expected to be put into operation in the first half of next year; The nylon 66 high-end new material project with an investment of 3.078 billion yuan is expected to be completed in 2023; The 120000 ton PBAT degradable plastic project with an investment of 4.4 billion yuan is expected to be completed in 2023; Invest 1.031 billion yuan to build a high-end solvent project. After it is put into operation in 2023, it is expected to increase the production capacity of dimethyl carbonate, methyl ethyl carbonate and by-product diethyl carbonate by 300000 tons. In addition, the company has arranged in advance and invested 11.5 billion yuan to build the second base in Jingzhou, Hubei. At present, various elements and conditions have been implemented successively, and the project construction has been gradually started. After the construction is completed, it is expected to rebuild a Hualu to ensure medium and long-term development.
Profit forecast: we maintain the profit forecast. It is estimated that the company will achieve a net profit of RMB 7.4/7.5/7.8 billion in 2021 / 2022 / 2023, yoy + 311% / + 1% / + 5%, equivalent to EPS of RMB 3.49/3.53/3.70. At present, the PE corresponding to the A-share price is 9 / 9 / 9 times. In view of the company’s obvious cost advantage, stable profitability and abundant follow-up projects, the “buy” rating is maintained.
Risk tips: 1. The company’s product price is lower than expected; 2. The new project is not as expected.
