Jingneng Power (600578): Release of Equity Incentive Plan Optimistic for Long-term Development of the Company

Jingneng Power (600578): Release of Equity Incentive Plan Optimistic for Long-term Development of the Company

Event: Jingneng Power released equity incentive plan (budget).

The incentive plan intends to grant stock options 6746 to the incentive objects.

730,000 copies (including budget 674.

6.73 million shares), the underlying stocks involved are RMB A common shares, accounting for approximately 1% of the company’s total share capital at the time of the announcement of this incentive plan; the exercise price is the quantity 3.

17 yuan.

The reform of first-class state-owned enterprises stimulates the vitality of management: Since its listing in 2002, the company has announced the equity incentive plan for the first time, which is of great significance as a local state-owned enterprise.

Focusing on the list of large-capacity Tokyo Energy Group companies listed as “Double Hundred Actions”, in order to implement the spirit of the “Double Hundred Actions” of state-owned enterprise reform, the company actively participated in the pilot work of the Beijing State-owned Assets Supervision and Administration Commission to further stimulate management vitality.

The proposed incentive objects awarded in the first phase of this equity incentive plan are company executives, core backbones and core business personnel, with a total of 174 people. Any of the incentive objects has not granted more than the total company equity through the incentive planValue 1% of equity.

Clear performance appraisal goals and optimistic about the company’s long-term development: The company’s annual performance appraisal for the first period of awards and allocations includes the following five aspects: emerging company certification.

Taking the first exercise period of this incentive plan as an example, the compound growth rate of deducted non-ROE and deducted non-attributed net profit in 2020 is based on the target value, and it is required to be not less than the 75th level of the benchmark enterprise orIndustry average.

We judge that reasonable high-quality production capacity and capacity are released, the scale of coal supply and demand has improved, and the central price of coal has been pushed down.

The company’s power generation assets are all thermal power, which will benefit from the decline in coal prices.

In addition, unlike the “ceiling” of installed power growth in the thermal power industry, the company ‘s installed growth is still considerable, and the company ‘s profitability and growth are expected to exceed those of 上海夜网论坛 its peers.

Earnings forecast and investment grade: Maintain earnings forecast. It is expected that the company’s net profit attributable to mothers for 2019-2021 will be 12 respectively.

8, 16.

5, 17.

600 million.

The company’s EPS for 2019-2021 is expected to be 0.

19, 0.

24, 0.

26 yuan, the current expected corresponding PE is 16, 13, 12 times, and the corresponding PB are 0.

89, 0.

85, 0.

82 times.

We are optimistic about the company’s performance flexibility and growth, as well as its estimated safety margin, and maintain a “Buy” rating.

Risk prompts: The unit’s production or asset injection progress is slower than expected, the thermal coal price rises higher than expected, the risk of a reduction in the comprehensive on-grid electricity price, the demand for electricity exceeds expectations, and the risk of failure of the fair incentive plan.