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Jingneng Power (600578) Opinions on Major Events: Equity Incentive Plan Landed in Long-term Reform and Icebreaking Trip

Jingneng Power (600578) Opinions on Major Events: Equity Incentive Plan Landed in Long-term Reform and Icebreaking Trip

Core point of view The company launched an equity incentive plan, combined with interrelated benefits, and promoted the company’s attention to market value. Although the size of the plan has been reduced (accounting for 1% of 都市夜网 the share capital) and the incentive effect has been moderately increased, it is a long-term reform and icebreaking journey of the company, indicating significant significance.; Maintain the company’s “Buy” rating with a target price of 4.

65 yuan.

   The company launched an equity incentive plan.

The company announced the stock budget plan (budget), scale 0.

6.7 billion shares, accounting for 1% of the issued share capital, were awarded to a total of 174 people including Dong Jiangao and middle-level backbones, with an exercise price of 3.

17 yuan / share, basically the same as the closing price on the day of the announcement of the plan.

   The scale and magnitude of the incentives are both moderate, but the instructions are prominent.

With the rapid entry of electricity market-based transactions, the operation 杭州桑拿 of electricity companies is expected to shift from homogeneity to differentiation in the future, and the degree of dependence on talents will increase significantly.

The launch of the equity incentive plan this time will help stimulate the enthusiasm of the management team, effectively restrain the interests of all parties, and increase the company’s attention to market value.

The total size of the incentive is only 1% of the capital, and the maximum actual compensation of the incentive object is not more than 40% of the total compensation level when the stock reward is given. The scale and amplitude of the incentive are both mild.The icebreaking journey of the company’s long-term reform.

From the plan’s setting of performance evaluation goals, with 2018 as the base, 2020?
In 2022, the compound growth rate of net profit after deducting non-attribution will not be less than 13.

5%, 2020?
The ROE requirement is 4 in 2022.

5% / 5.

0% / 5.

6%, the lowest performance target set, the company has a great probability of completion.

   The operating advantages are being repaired and it is estimated that the repair potential is great.

2016?
In 2018, due to the impact of rising market electricity and coal prices, the company’s gross margin declined rapidly and ranked lower in the industry.

Considering that there is limited room for further improvement in the power marketization of Inner Mongolia, and that the supply and demand of the coal industry is over-developing, the company’s operating advantages are expected to resume and drive the gross profit rate down.
Gross profit margin in 2021 is 18.

0% / 24.

1% / 25.

1%.

The company’s 2018 P / B is only 0.

9 times, which is relatively low in the industry. Relative estimates are expected to be repaired as business advantages return.

   Electricity compensation is expected to add flexibility in the second half of the year.

Shijingshan Thermal Power Plant enjoys 2 years (2019-2020) of power generation plan compensation due to shutdown, with annual compensation hours of 3,750 hours.

The compensated electricity will be distributed on behalf of other high-efficiency, low-emission power generation companies.

The compensation is expected to contribute 2 this year.

800 million net profit after tax will be released in the second half of the year.

   Risk factors: The coal price has increased significantly more than expected; the reduction in benchmark electricity prices has dragged down revenue; further advance investment costs have been suggested: considering the setting of performance targets for incentive schemes, both the reduction and the reduction in the scale of compensation costs (0.

4.5 billion), we maintain the company in 2019?
EPS forecast for 2021 is zero.

31/0.

54/0.

58 yuan, the current sustainable corresponding P / E is 10/6/6 times, maintaining the target price of 4.
65 yuan and “Buy” rating.