\u3000\u3 Shengda Resources Co.Ltd(000603) 236 Quectel Wireless Solutions Co.Ltd(603236) )
Event: on March 17, 2022u, the company issued the 2022 stock option incentive plan (Draft), with a total of 148 incentive objects, including senior managers, core technical / business personnel, etc. the exercise price is 177.57 yuan / share, and the performance assessment target is the operating revenue from 2022 to 2025, with the corresponding year-on-year growth rate of no less than 33% / 30% / 25% / 25% respectively.
Comments:
Issue option incentive and assess the operating income. The compound growth rate from 2022 to 2025 will not be less than 27%. According to the announcement, the company plans to issue stock option incentive, with the number of 2.8959 million shares, accounting for 1.99% of the total share capital. It is granted at one time without reserved rights and interests. The performance assessment target of stock options at the company level is operating income. The operating income from 2022 to 2025 is not less than RMB 14.9/193241/30.2 billion respectively, with a corresponding year-on-year growth rate of not less than 33% / 30% / 25% / 25%, and a compound growth rate of not less than 27% from 2022 to 2025. Selecting operating income as the performance evaluation index can directly reflect the operation of the company’s main business and the growth of market value. The setting of this goal will help to mobilize the enthusiasm of employees, improve the company’s competitiveness and ensure the realization of the company’s future development strategy and business objectives.
In the short and medium term, equity incentive can improve the cohesion of the core team and focus on both revenue and profit
1) enhance the cohesion of the core team and promote the steady growth of the company’s revenue: 147 senior managers and core technical / business personnel serving in the company and its subsidiaries are encouraged this time. Equity incentive is not only helpful to attract and retain excellent talents, but also helpful to further mobilize the enthusiasm and creativity of senior managers, core technical and business personnel and improve the cohesion of the core team, So as to improve the core competitiveness of the enterprise, and combine the interests of shareholders, the company and core team personnel through equity incentive, so as to improve the long-term development ability of the company in multiple directions and angles.
2) implied expectation of exercise price on future profitability: the exercise price of the incentive stock option is 177.57 yuan per share, that is, after the exercise conditions are met, each stock option granted to the incentive object can purchase one share of the company’s stock at 177.57 yuan. It implies that the company’s stock price should have a certain premium compared with the exercise price after the exercise conditions are met, so that the incentive effect can play a role. At present, the market has expectations for the company’s revenue and profitability. In order to truly achieve the incentive effect, the company’s senior executives and core team should not only focus on the rapid growth of operating revenue to meet the exercise conditions, but also focus on the steady improvement of profitability to stimulate the rise of stock price. Overall, this incentive demonstrates the confidence of the company and its core team in the improvement of operating revenue and profitability in the medium and short term.
In the long run, the company has broad development space in the future – two capabilities to ensure the future growth of the company
1) fine management ability: the pre effect of the company’s R & D expenses is initially reflected, and the fine management ability is gradually improved, which is expected to improve the profitability in the future. The company’s R & D expenses are in front. With the promotion of the company’s new products, the long-term cost rate has room to decline; While expanding its scale, the company is gradually improving its overall fine management ability, more refined control over costs and expenses, has a strong scale effect in the long term, and its long-term profitability is expected to be gradually enhanced.
2) whole ecosystem strategic development capability: whole ecosystem strategic deployment capability = comprehensive soft power + the ability to conquer new businesses. The comprehensive “soft power” mainly includes industry knowhow, understanding of suppliers and customers, etc; The ability to conquer new businesses is to gradually transition from hardware equipment to solution design and platform services. The price competition in the module industry is fierce. It is difficult to significantly improve the profitability simply by selling module hardware. In the era of everything Zhilian, taking modules as the entrance, through the provision of cloud platform / overall industry customized solutions, realize service upgrading and transformation, and build the ability of whole ecological strategic layout, which helps to improve the overall value of the enterprise, Consolidate core competitiveness. The company actively expands new businesses. New businesses represented by antenna business, ODM business and SIM card business have been mature and operated. In the future, with the further improvement of the whole ecological deployment line of the company, there is a broad growth space.
Profit forecast and investment rating
The Internet of things is a long-term golden race track. As a leading enterprise of the Internet of things module, the company has a deep layout of the whole track. It also has significant competitive advantages in high threshold tracks such as vehicle and 5g, and has a large space for development in the future. It is estimated that the total revenue of the company from 2022 to 2023 will be 15.71 billion yuan and 20.097 billion yuan respectively, corresponding to 1.8 times and 1.4 times of PS respectively, and the estimated net profit will be 613 million yuan and 910 million yuan respectively, maintaining the “buy” rating.
Risk factors
The development of the Internet of things industry was not as expected, the intensified competition in the Internet of things industry triggered a price war, and the covid-19 epidemic spread repeatedly
