\u3000\u3 Guocheng Mining Co.Ltd(000688) 006 Zhejiang Hangke Technology Incorporated Company(688006) )
Event: on March 18, 2022, the company announced the draft of equity incentive in 2022.
Key investment points
The restricted stock incentive plan condenses core talents and demonstrates long-term development confidence. This time, it is planned to grant 4 million restricted shares to the incentive objects, accounting for about 0.99% of the total share capital of the company at the time of announcement of the draft incentive plan. The grant price (including reserved grants) is 28 yuan / share, and 245 incentive objects, accounting for 9.67% of the total number of 2534 employees. Among them, 3.2 million shares were granted for the first time, accounting for 80% of the total equity granted this time; 800000 shares are reserved, accounting for 20% of the total equity granted this time.
The vesting proportion of the restricted shares granted for the first time in the four vesting periods is 25% respectively. If the reserved part is granted in 2022, the vesting arrangement of reserved restricted shares is the same as that of the first grant; If the reserved part is granted in 2023, one-third of the restricted shares reserved for grant will be vested in each of the three vesting periods.
Compared with the equity incentive in 2021, the performance target for 20222023 remains unchanged and the performance target for 20242025 is added under this scheme
The company takes the operating income and the net profit attributable to the parent excluding share based payment expenses as the assessment indicators, and the exercise conditions are or. (1) The operating revenue in 20222025 is estimated to be less than 6.9% and 6.9% respectively, with the operating revenue of 20222025 being less than 1.65 billion yuan / 1.65%, respectively, and the operating revenue of 20222025 being less than 6.9% and 6.9% respectively. Or (2) net profit attributable to the parent excluding the impact of share based payment expenses: Taking the net profit attributable to the parent excluding the impact of share based payment expenses in 2020 as the base, the growth rate of net profit from 2022 to 2025 shall not be less than 100% / 280% / 295% / 340% respectively. We calculate that the net profit attributable to the parent excluding the impact of share based payment expenses from 2022 to 2025 will be RMB 8.7/16.53/17.181914 billion respectively, with a year-on-year increase of + 149% / 90% / 4% / 11%.
If the operating income and the net profit attributable to the parent excluding the impact of share based payment expenses are just achieved, the net profit margin (the net profit attributable to the parent excluding the impact of share based payment expenses) from 2022 to 2025 will be 22% / 28% / 25% / 24% respectively. Compared with the 2021 equity incentive plan, the performance target for 20222023 remains unchanged and the performance target for 20242025 is added.
The company achieved the revenue target of equity incentive scheme in 2021, and the failure to achieve the net profit target is mainly due to the short-term impact, which is not sustainable
According to the performance target of the equity incentive plan in 2021, the minimum operating income target in 2021 is 2.463 billion yuan or the net profit attributable to the parent excluding the impact of share based payment expenses is 566 million yuan. In 2021, the company actually realized an operating revenue of 2.518 billion yuan, and the net profit attributable to the parent company excluding the impact of share based payment expenses was 350 million yuan. It achieved the performance goal of operating revenue, but failed to achieve the target of net profit attributable to the parent company excluding the impact of share based payment expenses, mainly due to (1) the revenue side: strictly review the revenue confirmation, and some foreign customers’ orders lag behind to confirm the revenue in 2022 Q1; (2) From the perspective of gross profit margin: foreign customers’ orders lag behind the confirmation of income, and there are many logistics lines with low gross profit in domestic customers’ orders. We judge that the gross profit margin will rise to 35% – 38% in 2022; (3) Cost side: we judge that the cost in 2021 will reach 468 million yuan, including 183 million yuan in Q4, an increase of 75 million yuan compared with Q3.
Profit forecast and investment rating: we expect the company’s net profit attributable to the parent company from 2021 to 2023 to be 2.56 (down 32%) / 789 / 1813 million yuan respectively, corresponding to the current stock price dynamic PE of 96 / 31 / 14 times. Considering that the company is in the global battery factory industry chain and fully benefits from the subsequent expansion of overseas first-line battery factories, we maintain the “buy” rating.
Risk tip: the downstream expansion is lower than the market expectation, and the competition pattern has changed
