\u3000\u3000 Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) (300760)
Event: Recently, the company released the 2022 employee stock ownership plan (Draft). The share repurchase price of the transferee company of the employee stock ownership plan is 50 yuan / share, and the total capital does not exceed 152.4331 million yuan.
Comments:
The company will use the repurchased shares for the employee stock ownership plan. According to the draft of the employee stock ownership plan, the share source of the employee stock ownership plan is Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) a ordinary shares repurchased by the company’s special account for repurchase, with a total of no more than 3048662 shares, accounting for about 0.2508% of the current total share capital of the company of 1215691266 shares. At the same time, the participants of the employee stock ownership plan are the core employees and technical backbone of the company, and the total number of employees participating in the plan shall not exceed 2700. After the implementation of the employee stock ownership plan, the total number of shares held by all effective employee stock ownership plans shall not exceed 10% of the total share capital of the company.
The company announced the employee stock ownership plan at the beginning of 2022, demonstrating its confidence in long-term development. The company plans to implement an employee stock ownership plan for core employees and technical backbones, which is conducive to the long-term development of the company. On the one hand, a reasonable incentive mechanism can highlight the company’s attention to excellent talents, improve the cohesion of employees, mobilize the enthusiasm and creativity of employees, and enhance the sense of responsibility and mission of the company’s management team and core backbone for the growth and development of the company. On the other hand, establishing and improving the benefit sharing mechanism of employees and shareholders will help to improve the level of corporate governance, improve the company’s core competitiveness, promote the sustained, stable and rapid development of the company’s overall operation, and achieve the purpose of safeguarding the interests of shareholders.
The unlocking conditions of the employee stock ownership plan are relatively loose, with an annual growth rate of about 20%. The draft of the employee stock ownership plan proposes that the incentive is unlocked in three times. The unlocking conditions of the first / second / third batch are as follows: compared with 2021, the growth rate of net profit attributable to the parent company in 2022 / 2023 / 2024 is not less than 20% / 44% / 73%. On the whole, 20% of the net profit attributable to the parent company has a compound annual growth rate. Compared with the growth of the company in recent years (the growth rate of net profit attributable to the parent company in 2018 / 2019 / 2020 is 44% / 26% / 42% respectively), the unlocking threshold is relatively low. According to the company’s announcement, on the basis of legal compliance and the company’s existing cash compensation system, the company needs to further establish and improve the long-term incentive mechanism. Therefore, the company believes that the incentive to the participants of the employee stock ownership plan with low incentive cost can really improve the work enthusiasm of the participants, effectively unify the interests of the participants with the company and its shareholders, and promote the realization of the overall goal of the company.
Investment suggestion: the company is the leader of China’s medical devices, with both innovation and brand strength. Its products are diversified and can grow in the future. We expect the company’s earnings per share in 2021 / 2022 to be 6.74/8.30 yuan respectively, and the current share price corresponding to PE is 50 / 40 times respectively, maintaining the “recommended” rating of the company.
Risk warning: risk of industrial policy change; New Coronavirus pneumonia affects risk. Exchange rate fluctuation risk; Operation and management risks; Product R & D risk; Risks related to Sino US trade frictions.
