\u3000\u3000 Digital China Group Co.Ltd(000034) Digital China Group Co.Ltd(000034) )
Event: on April 11, 2022, the company issued Digital China Group Co.Ltd(000034) 2022 employee stock ownership plan (Draft).
Key investment points
The high performance target underestimates the value and highlights the cost performance: the assessment index of the employee stock ownership plan is that the net profit attributable to the parent company in 2022 and 2023 is not less than 1.0 billion yuan and 1.2 billion yuan. The performance target for 2022 is about 50% higher than the net profit deducted in 2021. As of April 11, 2022, the corresponding 2022 valuation is only 10 times PE, which is cost-effective.
Wide coverage and enhanced cohesion: the transfer price of the employee stock ownership plan is 10.86 yuan / share, 50% of the average share repurchase price of 21.72 yuan / share of the listed company, and 74.59% of the average share trading price of 14.56 yuan / share of the company 20 trading days before the publication of the draft. The scale of incentive shares is about 201371 million shares, accounting for 3.05% of the current total share capital of the company. Among the participants, there are 15 directors, supervisors and senior managers, with a total number of no more than 400, accounting for 8% of the total number of employees at the end of 2021. The duration is 5 years. The first exit period is 3-4 years, and the exit proportion is 50%. The second exit period is 4-5 years, and the exit proportion is 50%. The main purpose of issuing the employee stock ownership plan is to establish a sharing mechanism, improve the corporate governance structure, improve the incentive system and enhance the cohesion of the company.
The prosperity of Xinchuang industry has improved, and Xinchuang business is ready to go. In 2022, the market scale of Party and government information and innovation is expected to grow, and the market scale of industry information and innovation is expected to double. The company’s Xinchuang business focuses on Huawei Kunpeng and is the core manufacturer of Huawei Kunpeng server. The production lines in Xiamen and Hefei have sufficient capacity. Based on this, the company’s Xinchuang business is expected to usher in leapfrog development.
Profit forecast and investment rating: Digital China Group Co.Ltd(000034) issued the employee stock ownership plan, and the performance target in 2022 is about 50% higher than that in 2021. In 2022, the market space of industrial Xinchuang will be opened. As the core manufacturer of Huawei Kunpeng server, the company has been recognized by customers, and the company is expected to obtain a large market share. Based on this, we raised the net profit attributable to the parent company from 2022 to 2024 to RMB 1.020 (+ 1.51) / 12.28 (+ 2.29) / 1.458 (+ 324) million, maintaining the “buy” rating.
Risk warning: the credit innovation policy is not as expected; Risk of aggravation of the epidemic; The R & D progress is less than expected
