Dongfang Yuhong (002271): The release of the third equity incentive plan highlights confidence in performance

Dongfang Yuhong (002271): The release of the third equity incentive plan 杭州桑拿网 highlights confidence in performance

Event: On September 20, the company released the third phase of the supplementary stock incentive plan, which provided incentives to 2,189 people. The company plans to grant no more than 32.97 million convertible shares, accounting for 2 of the total share capital.

21%, grant price 10.

77 yuan / share.

The assessment objectives are reasonable and demonstrate the company’s confidence.

In the establishment of the company’s assessment targets, due to the overlapping of the 20-21 year and the second period of incentive time, according to regulatory requirements, the performance unlocking conditions must be consistent with the second period, resulting in a reduction in the 20-21 year target.

The 22-23 year performance evaluation target is calculated on the basis of 2019 net profit margin, based on a CAGR of not less than 20% from 2020-2023.

That is, the actual performance evaluation target of this equity incentive is based on 2019, and requires that the non-compound growth for four years from 20-23 years is not less than 20%.

We believe that the performance unlocking conditions for this fair incentive are reasonable and challenging, showing the company’s confidence in continued high-speed growth.

Incentives are broad, with both leaders and grassroots.

This time, 2189 people were awarded incentives, far more than the two previous incentives (311 and 1197).

The involved objects include sales staff, management staff, core business (technical) staff, etc. The core grassroots such as collection specialists and construction team captains have also been replaced with real inclusive incentives, reflecting the development concept of the company and employees growing together.

We believe that it will further motivate employees and partners, and promote continued growth in performance.

Investment suggestion: We expect the company’s net profit attributable to its mothers to be 20-2019.

5 billion, 26.

3 billion and 34.

5.7 billion, the closing price on September 22 corresponds to 15 PE.

6 times, 12.

2 times and 9.

3 times, maintaining the level of “prudent increase”.

Risk Warning: Demand Exceeds Expectations, Raw Material Prices Exceed Expectations