Dongfang Yuhong (002271) Opinions on Major Events: The Third Phase Stock Incentive Plan Provides Support for the Company’s Continuous Performance

Dongfang Yuhong (002271) Opinions on Major Events: The Third Phase Stock Incentive Plan Provides Support for the Company’s Continuous Performance

The company announced the third phase of the stock incentive plan budget.

Covering 2,187 employees from vice presidents to business backbones.

The exercise condition is that the compound annual growth rate of net profit in 2019-2023 is not less than 20%.

The wide range of incentives and high exercise conditions provide guarantee for the company’s performance growth in the next 4 years.

matter.

On September 21, 2019, the company announced the “Beijing Oriental Yuhong Waterproof Technology Co., Ltd. Third Supplementary Stock Incentive Plan (Draft)” and was approved by the board of directors.

According to the draft, this incentive plan is planned to be awarded no more than 3296.

610,000 shares of budget stock, accounting for approximately 2% of the company’s equity.

21%, the grant price is 10.

77 yuan / share.

This plan still needs to be approved by the company’s shareholders meeting before implementation.

The number of people covered by the equity incentive plan has increased significantly.

The company has done two double incentives in 2013 and 2016, covering 344 and 1230 people respectively.

The target of this equity incentive plan is 2187 people, including vice presidents, directors to middle managers and core business (technical) backbones. The overall incentive scope is wider.

Exercise conditions provide momentum for high growth in the next 4 years.

According to the announcement, the exercise conditions for this equity incentive plan are based on 2019 net profit, and the average compound growth from 2020-2023 is not less than 20%.

Among them, in 2020 and 2021, due to the overlap of the 深圳桑拿网 evaluation period following the second phase of the equity incentive plan, the net profit requirement is still not less than 19 before.

1.3 billion, not less than 23.

9.1 billion.

Compared with the implementation of the company’s previous two equity incentive plans, the final performance exceeded the exercise index.

It can be expected that with the promotion of this large-scale incentive plan, it is expected that the company’s average annual compound profit growth in the next 4 years is expected to exceed 20%.

Risk factors.

Potential fluctuation risks of real estate investment, risks of raw material price changes, macroeconomic fluctuation risks, and receivables collection risk.

Profit forecast and investment advice.

The company’s large-scale equity incentive plan has demonstrated its confidence in the continued high growth in the next 4 years.

Compared with the overall market, the long-term concentration of the waterproof industry is still relatively low.

Under the continuous improvement of earnings quality indicators, we expect the company’s performance to grow and the room for continued growth.

Based on this, we maintain our revenue forecast for 2019-2021 to be US $ 19,425.7 billion and US $ 33.6 billion, and we expect the company to return net profit to parent for 2019-2021.

4.1 billion, 26.

7.3 billion, 33.

51 ppm, maintaining EPS forecast for 2019-2021 at 1.

43/1.

79/2.

25 yuan, given a target price of 25.

83 yuan, maintain “Buy” rating.