Event: Recently, several central enterprises and state-owned listed companies in the iron and steel and non-ferrous metal industries have issued equity incentive plans. Based on this, we sorted out the equity incentive plans (13 in total) issued by the listed companies of central state-owned enterprises in the iron and steel and nonferrous metals industry in 2021, and calculated the financial indicators corresponding to their performance exercise conditions.
Comments:
Central enterprises account for 77%, and they will be launched in December 2021. In 2021, a total of 13 listed iron, steel and nonferrous metals companies issued restricted stock equity incentive plans (Draft), including 10 central enterprises and their subsidiaries and 3 local state-owned enterprises. From the time of announcement, eight companies announced equity incentive plans in December alone, and there are signs of centralized implementation of employee incentive plans of central state-owned enterprises.
The highest proportion of incentive shares in the company’s share capital is Sino-Platinum Metals Co.Ltd(600459) . The listed companies with the largest equity incentive are Sino-Platinum Metals Co.Ltd(600459) , China Tungsten And Hightech Materials Co.Ltd(000657) , Sinosteel New Materials Co.Ltd(002057) and Baoshan Iron & Steel Co.Ltd(600019) . The number of incentive shares of restricted shares accounts for 4.55%, 2.33%, 2.31% and 2.25% of the company’s share capital respectively.
The most extensive incentive coverage is Sino-Platinum Metals Co.Ltd(600459) , Sinosteel New Materials Co.Ltd(002057) . The listed companies with the largest number of incentives are Baoshan Iron & Steel Co.Ltd(600019) (2000), Aluminum Corporation Of China Limited(601600) (1192), Sino-Platinum Metals Co.Ltd(600459) (451), Beijing Shougang Co.Ltd(000959) (412). Sino-Platinum Metals Co.Ltd(600459) (33%) and Sinosteel New Materials Co.Ltd(002057) (15%) account for the highest proportion of incentives in all employees of the company, and the rest of listed companies are less than 10%.
Except for the directors, supervisors and senior managers, the incentive intensity of employees is Xiamen Tungsten Co.Ltd(600549) . Most listed companies grant the most shares of restricted shares, and the top executives are the chairman and general manager. Except for directors, supervisors and senior managers, the highest market value of the granted shares (closing price on December 31, 2021) for other managers and core technical backbones is Xiamen Tungsten Co.Ltd(600549) (RMB 3.2 million), China Tungsten And Hightech Materials Co.Ltd(000657) (RMB 2.65 million), Baoshan Iron & Steel Co.Ltd(600019) (RMB 1.64 million).
The higher performance indicators are Maanshan Iron & Steel Company Limited(600808) , Aluminum Corporation Of China Limited(601600) and Xinjiang Ba Yi Iron & Steel Co.Ltd(600581) . Most companies put forward assessment requirements from two dimensions: profit growth rate and return on assets (ROE, ROA or return on net cash). 1) The highest cash return on net assets is Maanshan Iron & Steel Company Limited(600808) (22% / 24% / 28%); 2) The highest requirements for compound growth rate of profit in 2024 compared with 2020 are Aluminum Corporation Of China Limited(601600) (compound growth rate of non net profit attributable to parent deduction is not less than 110% / 75% / 60%) and Xinjiang Ba Yi Iron & Steel Co.Ltd(600581) (compound growth rate of total non profit deduction is not less than 65% / 50% / 40%).
According to the calculation of performance exercise conditions, the net profit deducted from non attributable parent company corresponds to Maanshan Iron & Steel Company Limited(600808) (December 31, 2021) with the lowest PE in 2022. Assuming that the employees of the listed company can exercise their rights smoothly, based on the corresponding performance assessment conditions, the corresponding listed companies with low PE of non net profit attributable to the parent company in 2022 / 2023 / 2024 are Maanshan Iron & Steel Company Limited(600808) (6.4 / 5.6 / 4.9 times), Beijing Shougang Co.Ltd(000959) (8.6 / 7.7 / 7.0 times), Shanxi Taigang Stainless Steel Co.Ltd(000825) (10.3 / 8.7 / 7.6 times), Xinjiang Ba Yi Iron & Steel Co.Ltd(600581) (10.6 / 9.3 / 8.2 times) and Baoshan Iron & Steel Co.Ltd(600019) (10.6 / 9.6 / 8.8 times).
Investment suggestion: we believe that the company’s incentive intensity and performance growth rate for senior executives and technical backbone employees are important incentive indicators. Based on the above analysis, we suggest to focus on the listed companies of central enterprises and state-owned enterprises with high performance growth requirements and strong equity incentive. Recommendations: Baoshan Iron & Steel Co.Ltd(600019) , Shanxi Taigang Stainless Steel Co.Ltd(000825) , suggestions: Maanshan Iron & Steel Company Limited(600808) , Beijing Shougang Co.Ltd(000959) , Xinjiang Ba Yi Iron & Steel Co.Ltd(600581) , Sino-Platinum Metals Co.Ltd(600459) , Aluminum Corporation Of China Limited(601600) .
Risk analysis: risk of performance not meeting expectations; Risk of macroeconomic environment change.
