Yunnan Baiyao (000538): Launch of employee shareholding and incentive funds to extend market-oriented incentives

Yunnan Baiyao (000538): Launch of employee shareholding and incentive funds to extend market-oriented incentives

This report reads: The company’s draft employee shareholding plan and draft incentive fund budget further promote the implementation of market-oriented incentive measures. It is expected to drive growth back into the fast lane and maintain the level of overweight.

Investment points: long-term market-oriented incentive reforms to maintain the level of overweight.

After the company’s mixed reform, it gradually implemented the implementation of relevant policies along the market-oriented reform plan. Subsequently, the pharmaceutical business unit was adjusted to stabilize and the health business unit steadily developed and expanded into new categories. It is expected to endogenously extend and lift back to the fast track of growth.

Maintain 2019-2021 EPS forecast2.

83/3.

20/3.

66 yuan, maintaining the target price of 96.

00 yuan, corresponding to PE 30 X in 2020, maintaining an overweight rating.

The “Employee Shareholding Plan (Draft)” announced this time is the implementation of the previous plan.

The company announced on November 2, 2018 that it intends to use its own funds to repurchase company shares for the implementation of employee stock ownership plans.

At that time, the specific plans for employee shareholding, such as price, target, etc. were not determined, and the board of directors and authorized personnel of the board of directors were authorized to subsequently formulate specific plans for shareholding plans in accordance with relevant laws and regulations.

After the plan was approved by the shareholders’ 深圳桑拿网 meeting, the company will be in 2019.

1.

5 The first repurchase announcement was issued, and a total of nine repurchase progress announcements were subsequently issued. As of the end of September 2019, the company had cumulatively repurchased 3,301,001 shares through the repurchase special securities account, accounting for 0 of the total share capital.

26%, the source of stocks in this employee shareholding plan is the shares that have been repurchased in the special account mentioned above.

The employee shareholding plan purchased the repurchase stock at a price of 37.

07 yuan / share, not less than the average price of the company’s repurchased shares (74.

13 yuan / share).

Newly announced “Incentive Fund Management Measures (Budget)” to further increase incentives.

Set up incentive fund = (company’s current net profit-net profit of the previous year) × 15% (the company’s net profit in 2018 was 3.3 billion yuan), the total number of fund incentive objects is not more than 485, including directors, supervisors and senior management13 people.

Some incentive funds are directly linked to the performance of listed companies and have a wide range of benefits. If implemented, it is expected to further enhance the effectiveness of incentives.

The above plan still needs the performance of the shareholders meeting.

Risk Warning: New Product Expansion Is Less Than Expected; Outward M & A Progress Is Less Than Expected