Gujiajiao: Equity incentives show confidence that short-term exchange losses do not change long-term high growth

Securities Times Network September 15th

event:

The company issued a draft restricted equity incentive plan, and proposed to grant a total of 18,731,000 shares of restricted stock to the company's president, vice president, middle management and core technology (business) personnel, accounting for 4.54% of the total share capital, and the grant price is 26.70 yuan. .

Comments:

Equity incentives ensure long-term growth. The company intends to grant a total of 18,731,100 shares of restricted shares to the company's president, vice president, middle management and core technology (business) personnel, accounting for 4.54% of the total share capital, and the grant price is 26.70 yuan. Among them, 15,593,100 shares were granted for the first time, accounting for 3.86% of the total share capital, and 2.8 million shares were reserved. The unlocking condition is that, based on 2016, the revenue growth in 18-20 years is not less than 44%, 73%, and 107%, respectively, and the net profit growth is not less than 32%, 52%, and 75%, respectively. Equity incentives will effectively bind executives' interests, enhance employee enthusiasm, and demonstrate the company's confidence in future development.

The mattress has been upgraded by the consumption of Dongfeng, and the business has grown rapidly. The company's mattress products cost-effective, 3D version of the first store uses German Muller 3D materials, Airflow breathable fabric, breathability is more than 8 times that of ordinary mattresses, the price has a larger price advantage than competitors' similar products. In the first half of the year, the company's bedding revenue was 430 million yuan, a year-on-year increase of 72.7%, of which mattresses doubled. Raw material prices rose and gross profit margins fell. TDI is an important raw material for sponges. Since July, the price of raw materials TDI has risen rapidly. At present, 40,000 yuan/ton, which is nearly 80% lower than the lowest point of 23,000 yuan/ton, the rapid rise of raw materials has caused the company's gross profit margin to decline.

The renminbi accelerated its appreciation and the exchange rate losses expanded. Since May, the RMB has accelerated its appreciation. More than 98% of the company's foreign exchange is in US dollars. By the end of June, the company had US$78.645 million and approximately EUR 10 million in Euros, Hong Kong dollars and Canadian dollars, and another US$67.9 million in accounts receivable. At present, the spot exchange rate of the US dollar against the RMB is 6.5350, which is about 3.5% higher than the 6.7744 appreciation at the end of June. It is expected that the company's exchange loss will be more expanded than the mid-term report.

Earnings forecast and valuation: It is estimated that the company's EPS in 17-19 years will be 1.91 yuan / 2.64 yuan / 3.55 yuan, PE is 27X, 20X, 15X, maintaining a "buy" rating.

Risk Warning: Real estate sales growth slowed down and raw material prices fluctuated.

(Securities Times News Center)