JIU Yang shares: Restrictive stock Incentive plan action biased neutral

The event of the 14th late announcement of the limited stock Incentive plan: Point 1 The proposed grant of 246 restricted shares of 4.26 million shares, which is the current 0.56%;2 of total equity, is a source of equity for the company directed to the incentive to issue new shares, the right price of 7.59 yuan (the first 20 trading day 50%); 3) The unlocking period is on the grant day (after the SFC approves the examination without objection and is approved by the general meeting of shareholders, when the board confirms that the terms of the award are granted within 30th of the date of the award, the three-year period of three is unlocked, and each issue is unlocked by 40%, 30% and 30%;4 per cent of the total number of restricted shares granted. The annual sales growth rate is no less than 20　　%, the net profit growth rate is not less than 5%, 6%, 7% respectively, the operating cash flow net amount is not less than the current period net profit. Commenting on the market may think that the lifting of performance conditions is lower than expected, we believe that the key is the revenue growth rate of not less than 20% target: The company suggested that the stock incentive itself is a more than expected event; But the lifting performance conditions in 2011-2013, the net profit growth rate is not less than 5%, 6%　　Goal may not give investors reassurance, because the company's current valuation level 15 times times, should be at least 15% of the net profit growth rate. But we also believe that the three-year income year-on-year growth of not less than 20% target is reassuring, according to the company's 2010-year income of about 5.5 billion estimates, 2013 year income is expected to reach 10 billion, in line with our view that the nine-Yang already has brand awareness, huge network resources and abundant cash,　　Senior management team young and low-key and pragmatic, believe that growth into a tens of billions of income of enterprises is not difficult to view; And this is more than the early stage of our research company's planning is 3-5 years to achieve 10 billion revenue to be more aggressive, in the revenue growth rate is not lost to supor how much.　　Therefore, short-term for the focus on net profit growth of investors, this announcement may be negative, but for the company's growth is absolutely positive and positive, then the company's long-term investment value is necessarily positive. The incentive is broad, the restrictive stock incentive line price is low, to encourage and stabilize employees: 1 246 of the proposed target, except three directors, the rest are middle management and backbone, finance, sales, research and development, production, marketing, administration and other departments are covered; The total number of employees around 3800 people,　　The stimulation surface reaches 6.5%.　　2 the right price of 7.59 yuan for employees is equivalent to 50% of the accounting income has been visible, so the employee incentive effect than the stock option incentive to be obvious. 3 The plan also stipulates that "if the incentive is to leave within 2 years after being granted the restricted stock and unlock it, the full proceeds of the restricted stock shall be returned to the company." Within 2 years after the subject has been granted a restricted stock and is unlocked, in the same or similar work with an institution that has a competitive relationship with the company or in any other institution, the incentive object shall, in addition to returning all the proceeds of the restricted stock to the company,The Company shall also bear the liability to the company for the penalty of the same amount of the proceeds of the grant of the restricted stock, and shall also be liable to the corporation at the same time, while the service period of these core employees has a guarantee of 5 years, and the function of stabilizing the staff is remarkable. Investment proposal consider restrictive stock incentive after the implementation of a slight expansion of equity, incentive costs to increase the financial costs (estimated 3 years of restrictive stock incentive costs amounted to 6.722 million yuan), we fine-tune the company's earnings forecasts, 10-12-year income of 56.2, 69.5, 8.4 billion yuan, EPS were 0.861, 1.085, 1.287 yuan, growth 7.5%, 26.7%, 18.6%.　　The current stock price corresponds to 15X11PE. Short-term net profit growth targets for equity incentives may have a negative impact on stock prices, but we believe that the company's quarterly report will prove to the market that the profit growth target is only the minimum, the likelihood of 1q11 profit growth exceeding 50% remains, and the acquisition of the Sea Wolf Star water purifier assets will be a stimulus. 3 Months company reasonable valuation is 17-18X11PE, namely 18.6-19.6 yuan, maintain buy proposal.